More speculation in the media about the future of commercial property this week with the RBA expressing concerns about a “growing disconnect between prices and fundamentals”.
I’m no economist but I have to wonder about that. Aren’t prices a function of fundamentals?
Supply and demand for instance.
Maybe fundamentals just need a bit of a catch up.
That aside I think it’s risky to assume that we, while reading this doomsayer prediction, are comparing apples with apples.
The rest of their prediction revolves around the global hunt for yields.
What they are looking at are big investor money from overseas… and I’m talking HUGE investor money that comes into a country looking for yields and snapping up whatever they can grab…
I don’t know about you but I’m pretty sure that JP Morgan Chase & Co. and the China Construction Bank Corporation probably aren’t going to spend the time and paperwork buying the bakers down the road…
Or even the small shopping centre around it…
These big players are looking for huge investments. the kind of deals I tech my students to buy are so small these guys wouldn’t see them.
Not only that, the kind of deals these guys are looking for tends to be in the major capital cities.
Never mind that there are people who actually live in towns that are not Sydney, Melbourne or Brissy.
It’s true… I went there…
Real people living in small and even medium sized towns.
People that need services, run businesses and go about their daily lives unaware that there are even major investors, buying up city office buildings in capital cities around the world.
Old Fred Farmer, Harriet hairdresser, and Bill baker couldn’t care less that these transactions happen.
And for the most part neither do I.
It’s true yields have dropped from 5 years ago. It’s easy to fall into the trap where you view what’s happening right now with a snapshot point of view. What I mean by that is that there’s a tendency to see things that are happening and take the view that that is how they are going to stay forever.
Live is always in motion. Things are always changing.
I’ve been investing in commercial property for more than 35 years and I’ll guarantee you that things will not stay as they are right now… The commercial market is always in flux.
So with that in mind let me give you 2 tips and a warning.
Tip 1 – Start investing in commercial.
Tip 2 – Learn how to find properties that have good yields (or can be negotiated as such)
Warning – Forget waiting for the perfect time, or exactly the right conditions.
That will never happen…
But if you just learn how to invest correctly and start now here’s what will happen…
You’ll get cashflow… passive income…
Money you don't have to work for.
In fact I’ll go you one better.
If you do this right.
Get the lease right.
Get the numbers right
Get the right property in the right area (which is not what the big players are looking for at all)
…Then you can start replacing your income and living the life you most desire to live.
When I started to invest in commercial property I had one objective. Replace my income so I didn’t have to work if I don't want to.
Some people don’t have the stomach for living the beach lifestyle…
But I’d say that if you are creative, and work hard, you’ll come up with a way to occupy all your free time once you don’t have to work for a living any more.
I’m joking of course, and personally I just love property, so I’ve stuck with it. But like they say with lotto… you’ve got to be ‘in’ to win…
…Same with commercial property investing.
Want to find out more about my strategies?
Check out my new webinar.
When you get to the end of the webinar – if you want to – you can arrange a free chat with one of my coaches.
These are people who all are obsessed with property investing and are getting some great results. If you wonder whether you should find out more about investing in commercial, these guys will be able to help you.
See you there in a second.