Use the code to get 100% discount of AUD $4997 course.
Not sure how long it will be valid.
Source: https://www.facebook.com/groups/Auspropertyinvestorsgroup/pe…
August 2024 update: Code AUSPROP not required. "Normal price" is now $6500.
Steve Palise's Commercial Property Investing Course $0 (Normally $4997) @ Commercial Property institute
1442
ozbargaindeals on 12/05/2024 - 20:59 commercialpropertyinstitute.com.au (11755 clicks)
Last edited 11/08/2024 - 10:46 by 2 other users
Last edited 11/08/2024 - 10:46 by 2 other users
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Anyone did this and finds it to be useful?
Not me, but doubt it, if they're offering it 'free' every 6 months it's probably just a cash grab from the speaker, and by offering it free to those 'in the know' it makes the venue look full and the suckers who paid think they've made a good call. Rather than they turn up and there's maybe 20 people there with 200 empty seats they get a full house
It's online
Even worse then that they could pretend to charge that much lol
Who?
Saved 6.5k this morning and kicked the inflation can down the Labor road
Propadee doubles every 7 years doncha know? With propadee, numba always go up
I sell propadee and propadee accessories!
I thought it was a scam for email harvesting. The whole of "Commercial Property Institute" business appears to be the course and the website is copyright 2024. But maybe it really is useful.
Is the Commercial Property Institute Course Recognised by the Australian Property Institute, and Can Property Professionals Use it to Meet Their CPD Requirements?
Yes, the Australian Property Institute has officially recognised the Commercial Property Institute Course as structured CPD (Continuing Professional Development) hours. This means that property professionals can use our comprehensive course to meet their annual CPD requirementsAnybody know how hard it is to get a course approved as CPD?
I am wondering whether it might be possible to claim a bunch of course codes and then sell them when the price goes back up for 3-4k each.
This is a pretty good deal if you can find some buyers, because even selling them at half price is lucrative.
I believe Steve has made the course permanently free now.
MODULE 1: INTRODUCTION & COMMERCIAL VS RESIDENTIAL
• Market Fundamentals
- Higher cash flow than residentialCommercial properties typically generate 2-3x the cash flow of residential properties
- Longer leases (1-30 years)
Commercial leases offer greater income security with multi-year terms
- Tenant pays outgoings
Commercial tenants cover property expenses, increasing net returns
- Higher deposits required (30-40%)
Larger initial capital needed but offset by stronger cash flow
- Net yields 5-8% vs residential 3-6% gross
Commercial properties provide better income returns after expenses
- Similar capital growth potential
Can match residential growth over time despite common misconceptions
- More value-add opportunities
Multiple ways to increase property value through active management• Risk Profile
- More complex due diligence requiredDetailed investigation needed across business, financial and property aspects
- Higher initial capital needed
Larger deposits and transaction costs require substantial starting capital
- Professional tenant relationships
Business-to-business relationship requires different management approach
- Industry-specific risks
Each commercial sector has unique challenges and considerations
- Market cycle sensitivity
Commercial properties can be more affected by economic conditions
- Higher borrowing costs
Interest rates typically 0.5-1% higher than residential loans
- Greater management complexity
More sophisticated management needed for commercial propertiesMODULE 2: TYPES OF COMMERCIAL PROPERTY
• Industrial Properties
- Warehouses and factoriesLarge-scale facilities for manufacturing and storage purposes
- Manufacturing facilities
Purpose-built spaces for production and assembly operations
- Storage units
Multi-unit facilities providing secure storage solutions
- Distribution centers
Strategic locations for product distribution and logistics
- Location near transport routes
Access to major highways and transport hubs crucial for success
- Height clearance requirements
Adequate ceiling heights needed for operations and storage
- Truck access considerations
Property must accommodate vehicle movements and loading• Retail Properties
- Shopping centersMulti-tenant retail environments with anchor tenants
- Medical centers
Purpose-built facilities for healthcare services
- Hospitality venues
Food and beverage focused properties with specific requirements
- Service businesses
Locations suitable for customer-facing businesses
- Foot traffic importance
Customer flow critical for retail success
- Location demographics
Local population characteristics drive retail performance
- Online shopping impact
Understanding how e-commerce affects retail property demand• Office Properties
- Low-rise buildingsSuburban and fringe CBD locations under 7 stories
- Mid-rise developments
Urban locations between 7-25 stories
- High-rise towers
CBD locations above 25 stories
- Public transport access
Proximity to transport essential for workforce access
- Technology infrastructure
Modern technological capabilities crucial for tenants
- Work-from-home impact
Understanding changing workplace dynamics
- Amenity requirements
On-site facilities needed to attract quality tenantsMODULE 3: THE NUMBERS
• Purchase Costs
- Stamp dutyGovernment tax varies by state/territory and purchase price, typically 3-5% of purchase price
- Legal fees
Conveyancing and contract costs usually range from $2,000-$4,000
- Inspection costs
Building and pest inspections typically $500-$1,500 for commercial properties
- Valuation fees
Professional valuation costs range from $800-$3,000 depending on property complexity
- Due diligence expenses
Costs for searches, reports and professional advice typically 1-2% of purchase price
- Registration fees
Government charges for registering property transfer and mortgage
- Loan establishment fees
Bank charges for setting up commercial loan, usually 0.5-1% of loan amount• Financial Metrics
- Net vs gross yieldsNet yields exclude outgoings while gross yields include all income before expenses
- Capitalization rates
Property value calculated by dividing net operating income by purchase price
- Return on investment (ROI)
Measures total return including both income and capital growth
- Cash flow calculations
Analysis of all income and expenses to determine true return
- Depreciation benefits
Tax deductions for building and fixture wear and tear
- Loan serviceability
Bank assessment of ability to repay loan based on income and expenses
- Stress testing
Analysis of property performance under various scenarios like vacancy or interest rate rises• Lease Analysis
- Rental increasesAnnual rent adjustments through CPI or fixed percentage increases
- Outgoings recovery
How expenses are passed through to tenants and reconciled
- Market rent reviews
Periodic assessment of rent against market rates
- Incentive structures
Rent-free periods or fit-out contributions to attract/retain tenants
- Option periods
Additional lease terms available to tenant at their discretion
- Make good provisions
Tenant obligations for property condition at lease end
- Security requirements
Bank guarantees or bonds required from tenants• Property Valuation
- Income approachValuation based on property's income generating potential
- Comparable sales
Analysis of similar property sales in the area
- Replacement cost
Assessment of land value plus building replacement cost
- Risk assessment
Evaluation of property and tenant risks affecting value
- Future potential
Consideration of value-add opportunities and market growth
- Locational factors
Impact of location on current and future value
- Building quality
Assessment of construction, age and condition affecting valueMODULE 4: BUYING AND SELLING
• Preparation
- Financial position assessmentDetailed review of your current assets, liabilities, income and borrowing capacity
- Team building
Assembling professionals including broker, accountant, solicitor and property manager
- Market research
Analysis of target areas, property types and market conditions
- Goal setting
Establishing clear investment objectives and timeline
- Strategy development
Creating detailed plan for acquisition and management
- Structure selection
Choosing appropriate ownership structure (individual, trust, SMSF etc.)
- Finance pre-approval
Securing lending approval before property search• Search Process
- Property criteriaEstablishing specific requirements for property type, size, location and return
- Agent relationships
Building network with commercial agents for opportunities
- Off-market opportunities
Accessing properties before public listing
- Initial due diligence
Preliminary investigation of potential properties
- Shortlisting
Creating focused list of properties meeting criteria
- Site inspections
Physical examination of potential properties
- Market comparison
Analysis against similar properties in area• Purchase Methods
- Expression of Interest (EOI)Formal submission of purchase interest with conditions
- Fixed price listings
Direct negotiation on advertised price
- Auctions
Competitive bidding requiring unconditional purchase
- Off-market deals
Direct negotiation with owner through agent
- Private treaty
Traditional negotiation process with conditions
- Put and call options
Rights to buy or sell at predetermined price
- Vendor terms
Seller-financed purchase arrangements• Exit Strategies
- Hold and accumulateLong-term ownership focusing on income and growth
- Sell partial portfolio
Strategic sale of selected assets to reduce debt
- Complete portfolio sale
Exit entire commercial property portfolio
- Refinancing options
Restructuring debt to improve returns or release equity
- Joint venture exits
Strategies for ending partnership arrangements
- Staged disposals
Planned gradual sale of assets over time
- Lease options
Tenant right to purchase property• Negotiation Process
- Price negotiationStrategies for achieving best purchase price
- Contract conditions
Establishing suitable terms and contingencies
- Due diligence period
Time allowed for detailed investigation
- Settlement terms
Agreement on timing and conditions
- Deposit structure
Amount and timing of deposit payments
- Special conditions
Additional terms specific to the property
- Documentation
Proper recording of all agreed terms• Settlement Process
- Contract exchangeFormal agreement between buyer and seller
- Finance confirmation
Final approval from lender
- Pre-settlement inspection
Final property check before completion
- Insurance arrangement
Organizing required property coverage
- Fund transfers
Coordination of purchase money payment
- Key handover
Physical transfer of property access
- Documentation completion
Finalizing all required paperworkMODULE 5: DUE DILIGENCE
• Area Research
- Population demographicsAnalysis of local population size, growth, age distribution and income levels
- Infrastructure plans
Investigation of current and future government infrastructure projects
- Competition analysis
Assessment of similar properties and businesses in the area
- Vacancy rates
Understanding local property vacancy trends and patterns
- Zoning requirements
Checking current and potential future use permissions
- Future development
Research into planned developments that could impact property value
- Transport links
Evaluation of accessibility via road, public transport and freight routes
- Local amenities
Assessment of nearby facilities supporting property value
- Economic indicators
Analysis of local economic health and growth prospects• Tenant Analysis
- Business viabilityAssessment of tenant's business model and financial stability
- Financial history
Review of tenant's payment history and financial statements
- Industry outlook
Research into tenant's industry trends and future prospects
- Reference checks
Verification of tenant's rental and business history
- Management experience
Evaluation of tenant's business management capability
- Growth potential
Assessment of tenant's expansion plans and capacity
- Security position
Review of guarantees, bonds and other security measures
- Multiple locations
Investigation of tenant's other business locations
- Market share
Understanding tenant's position in their market• Property Assessment
- Building conditionPhysical inspection of property structure and condition
- Structural integrity
Engineering assessment of building soundness
- Services audit
Review of electrical, plumbing, HVAC systems
- Compliance check
Verification of building code and regulation compliance
- Environmental issues
Investigation of contamination or environmental risks
- Title search
Legal verification of ownership and encumbrances
- Council requirements
Understanding local government regulations
- Building certificates
Review of necessary building certifications
- Asbestos register
Check for presence and condition of any asbestos• Lease Review
- Lease termsDetailed analysis of lease duration and conditions
- Rental increases
Understanding mechanism for rent reviews and increases
- Outgoings structure
Clarity on responsibility for property expenses
- Option periods
Review of any lease extension options
- Make good provisions
Understanding tenant's obligations at lease end
- Assignment rights
Analysis of tenant's ability to transfer lease
- Special conditions
Review of any unique lease terms
- Default provisions
Understanding consequences of lease breaches
- Security details
Review of bonds, guarantees and other security• Financial Due Diligence
- Income verificationConfirmation of current rental income
- Expense analysis
Review of all property operating costs
- Tax considerations
Understanding tax implications and benefits
- Insurance costs
Assessment of required insurance coverage
- Capital expenditure
Planning for future property improvements
- Depreciation schedule
Analysis of tax depreciation benefits
- Valuation assessment
Professional valuation of property
- Return calculations
Detailed analysis of expected returns
- Risk assessment
Evaluation of financial risks and mitigation strategies• Legal Due Diligence
- Title investigationDetailed search of property ownership
- Easements/restrictions
Review of property use limitations
- Planning permits
Verification of necessary permits
- Building compliance
Check of building code compliance
- Lease documentation
Review of all lease agreements
- Council rates
Verification of rate payments
- Legal claims
Search for any legal issues affecting property
- Environmental compliance
Check of environmental regulations
- Body corporate
Review of strata documentation if applicableMODULE 6: CONVEYANCING & LEGAL
• Legal Process
- Contract reviewDetailed examination of sale contract terms and conditions by legal professional
- Title searches
Investigation of property ownership and encumbrances
- Property searches
Council, water, land tax and other regulatory searches
- Settlement coordination
Organization of settlement timing and requirements
- Document preparation
Creation and review of all necessary legal documents
- PEXA registration
Electronic settlement and property transfer process
- Stamp duty
Calculation and payment of state-based property taxes• Professional Engagement
- Solicitor selectionChoosing between property lawyer with commercial experience
- Conveyancer selection
Engaging licensed conveyancer for property transfer
- Fee structures
Understanding and negotiating professional service costs
- Service scope
Defining extent of legal services required
- Communication protocols
Establishing clear channels for updates and information
- Risk mitigation
Identifying and addressing potential legal issues
- Document review
Professional examination of all property documentation• Contract Requirements
- Special conditionsSpecific terms needed for commercial property purchase
- Due diligence clause
Period allowed for property investigation
- Finance clause
Conditions relating to loan approval
- Building inspection
Rights to conduct property inspections
- Lease assignment
Transfer of existing lease agreements
- GST provisions
Treatment of GST in property transaction
- Settlement period
Time allowed for completion of purchase• Settlement Process
- Pre-settlement inspectionFinal property check before completion
- Fund transfers
Arrangement of purchase money payment
- Adjustments
Calculation of rates, taxes and rental adjustments
- Insurance
Arrangement of property coverage
- Key handover
Physical transfer of property access
- Tenant notification
Communication with existing tenants
- Registration completion
Final property title transfer• Legal Documentation
- Contract of salePrimary purchase agreement document
- Transfer documents
Property ownership transfer papers
- Lease documents
Existing tenant agreements
- Security documents
Bank guarantees and other securities
- Council certificates
Local government compliance documents
- Insurance certificates
Property insurance documentation
- Settlement statements
Final financial reconciliation documents• Post-Settlement Requirements
- Title registrationRecording new ownership with land registry
- Lease registration
Recording tenant leases on title
- Mortgage registration
Recording lender's security interest
- Council notification
Updating local government records
- Insurance transfer
Transferring property insurance coverage
- Property management
Establishing new management arrangements
- Tax documentation
Recording purchase for tax purposesMODULE 7: FINANCE & LENDING
• Lender Types
- Major banksTraditional banks offering standardized commercial loan products
- Mutual banks
Member-owned institutions with competitive rates
- Private lenders
Non-bank lenders offering flexible but costlier loans
- Non-bank lenders
Financial institutions specializing in commercial property
- Vendor finance
Seller-provided funding arrangements
- SMSF lenders
Specialists in superannuation fund borrowing
- Joint venture partners
Co-investment funding arrangements• Loan Products
- Full documentation loansTraditional loans requiring complete financial documentation
- Low documentation loans
Reduced paperwork loans with higher rates
- Lease doc loans
Loans based primarily on lease income
- Lines of credit
Flexible borrowing facility against property
- Commercial bills
Short-term funding with regular rollover
- Construction finance
Specialized loans for property development
- Bridging loans
Short-term funding between transactions• Assessment Criteria
- Character assessmentEvaluation of borrower's credit history and reliability
- Capacity analysis
Assessment of ability to service loan
- Capital verification
Review of borrower's financial resources
- Collateral evaluation
Assessment of property security value
- Conditions review
Analysis of market and economic conditions
- Serviceability calculations
Detailed analysis of loan repayment capability
- Security requirements
Assessment of additional security needed• Loan Structure
- Interest ratesFixed or variable rate options and margins
- Loan term
Duration of loan facility
- Repayment type
Interest-only or principal and interest options
- LVR requirements
Maximum loan to value ratio allowed
- Security structure
Type and level of security required
- Loan covenants
Specific conditions and requirements
- Review periods
Timing of loan condition reviews• Documentation Requirements
- Financial statementsBusiness and personal financial records
- Tax returns
Personal and business tax documentation
- Bank statements
Evidence of income and expenses
- Lease documentation
Current tenant agreements
- Property valuations
Professional property assessment
- Entity documents
Company or trust documentation
- Security documents
Mortgage and guarantee paperwork• Risk Assessment
- Property riskEvaluation of property type and location
- Tenant risk
Assessment of tenant quality and lease terms
- Market risk
Analysis of market conditions and trends
- Interest rate risk
Impact of rate changes on serviceability
- Vacancy risk
Assessment of potential vacancy periods
- Management risk
Evaluation of property management
- Exit risk
Analysis of loan repayment capability• Loan Process
- Pre-approvalInitial assessment of borrowing capacity
- Application
Formal loan application submission
- Valuation
Professional property assessment
- Credit assessment
Detailed lender review of application
- Approval
Formal loan approval process
- Documentation
Preparation of loan documents
- Settlement
Completion of loan fundingMODULE 8: STRUCTURES
• Individual/Joint Ownership
- Tax implicationsDirect income attribution and capital gains considerations
- Asset protection
Limited protection of personal assets
- Succession planning
Direct transfer to beneficiaries upon death
- Cost effectiveness
Lower setup and maintenance costs
- Management control
Direct control over property decisions
- Borrowing capacity
Personal income affects borrowing ability
- Risk exposure
Personal liability for property debts and issues• Trust Structures
- Discretionary trustsFlexible income distribution to beneficiaries
- Unit trusts
Fixed ownership proportions for multiple investors
- Hybrid trusts
Combination of discretionary and unit trust features
- Asset protection
Separation of ownership from control
- Tax benefits
Income distribution flexibility for tax efficiency
- Succession planning
Seamless generational transfer of assets
- Distribution flexibility
Annual choice of income recipients• SMSF Investment
- Borrowing restrictionsLimited recourse borrowing arrangements only
- Compliance requirements
Strict regulatory and reporting obligations
- Tax advantages
Concessional tax rates on income and capital gains
- Investment rules
Strict regulations on property purchase and use
- Property criteria
Specific requirements for eligible properties
- Member benefits
Tax-effective retirement income stream
- Limited recourse borrowing
Specific loan structure requirements• Company Structure
- Tax ratesFixed company tax rate on income
- Limited liability
Protection of shareholders' personal assets
- Succession options
Transfer of ownership through share sales
- Compliance costs
Higher setup and maintenance expenses
- Management structure
Formal director and shareholder arrangements
- Capital raising
Ability to bring in new shareholders
- Dividend distribution
Formal profit distribution process• Partnership Arrangements
- Joint venture structuresSpecific project-based partnerships
- Syndication options
Multiple investor structures
- Profit sharing
Agreement on income distribution
- Capital contributions
Initial and ongoing funding arrangements
- Management rights
Decision-making processes
- Exit strategies
Pre-planned departure arrangements
- Risk sharing
Division of liabilities and obligations• Structure Selection Factors
- Investment goalsAlignment with investment objectives
- Risk profile
Desired level of asset protection
- Tax efficiency
Optimal tax treatment of income
- Cost considerations
Setup and ongoing expenses
- Management complexity
Required level of administration
- Future flexibility
Ability to adapt to changing needs
- Exit planning
Ease of ownership transfer or sale• Legal Requirements
- Setup documentationLegal documents for structure creation
- Regulatory compliance
Ongoing reporting obligations
- Tax registration
Required tax registrations and returns
- Banking arrangements
Account setup and operation
- Property registration
Title holding requirements
- Annual obligations
Yearly reporting and compliance
- Professional advice
Legal and accounting expertise neededMODULE 9: POST-PURCHASE
• Property Management
- Tenant relationsRegular communication and issue resolution with tenants
- Maintenance scheduling
Planned and reactive maintenance coordination
- Rent collection
Systems for timely rent and outgoings collection
- Expense management
Tracking and controlling property expenses
- Compliance monitoring
Ensuring ongoing regulatory compliance
- Reporting systems
Regular financial and property performance reports
- Issue resolution
Prompt handling of property and tenant issues• Value-Add Strategies
- Property improvementsPhysical upgrades to enhance property value
- Tenant mix optimization
Strategic selection and placement of tenants
- Revenue enhancement
Additional income stream identification
- Cost reduction
Efficiency improvements to reduce expenses
- Space utilization
Maximizing rentable area
- Amenity additions
Adding facilities to increase property appeal
- Sustainability upgrades
Environmental improvements for cost savings• Insurance Requirements
- Building insuranceCoverage for physical property damage
- Public liability
Protection against third-party claims
- Loss of rent
Coverage for rental income interruption
- Business interruption
Protection against operational disruption
- Natural disasters
Coverage for specific environmental risks
- Policy review
Regular assessment of coverage adequacy
- Claims management
Process for handling insurance claims• Maintenance Management
- Preventive maintenanceRegular scheduled maintenance activities
- Emergency repairs
System for urgent repair requirements
- Contractor management
Coordination of service providers
- Budget planning
Financial planning for maintenance costs
- Quality control
Standards monitoring and enforcement
- Documentation
Record keeping of all maintenance activities
- Compliance checks
Regular safety and regulatory inspections• Financial Management
- Budget preparationAnnual income and expense planning
- Cash flow monitoring
Regular tracking of income and expenses
- Debt management
Loan repayment and refinancing strategies
- Tax planning
Optimization of tax position
- Capital expenditure
Planning for major improvements
- Performance tracking
Monitoring property financial performance
- Reporting systems
Regular financial reporting processes• Risk Management
- Market monitoringTracking local property market conditions
- Tenant retention
Strategies to maintain good tenants
- Building maintenance
Proactive maintenance programs
- Insurance coverage
Regular review of insurance needs
- Financial planning
Long-term financial strategy
- Compliance updates
Monitoring regulatory changes
- Emergency response
Plans for unexpected events• Lease Management
- Rent reviewsRegular rent adjustment processes
- Option periods
Management of lease renewal options
- Lease compliance
Monitoring tenant lease obligations
- Tenant changes
Managing tenant transitions
- Documentation
Maintaining lease records
- Negotiations
Handling lease term discussions
- Dispute resolution
Managing tenant conflictsMODULE 10: MARKET INSIGHTS
• Market Analysis
- Economic indicatorsTracking GDP, interest rates, employment affecting property markets
- Property cycles
Understanding market timing and cycle positions
- Sector performance
Analysis of different commercial property sector returns
- Yield trends
Monitoring changes in property investment returns
- Vacancy rates
Tracking occupancy levels across property types
- Rental growth
Analysis of rental rate movements
- Capital values
Monitoring property value changes over time• Industry Trends
- Technology impactEffects of technological change on property use
- Sustainability requirements
Growing importance of environmental considerations
- Workplace changes
Evolution of office space requirements
- E-commerce effects
Impact of online retail on commercial property
- Demographic shifts
Population changes affecting property demand
- Infrastructure development
Major projects affecting property values
- Regulatory changes
New laws and regulations affecting property• Risk Assessment
- Market risksEvaluation of broader market threats
- Property-specific risks
Individual property risk factors
- Tenant risks
Assessment of tenant stability
- Financial risks
Interest rate and funding considerations
- Environmental risks
Climate and sustainability factors
- Regulatory risks
Compliance and legal requirements
- Economic risks
Broader economic impact on property• Future Outlook
- Growth predictionsForecast of market growth potential
- Opportunity identification
Emerging market opportunities
- Sector trends
Future directions for different property types
- Investment timing
Strategic timing of investments
- Risk mitigation
Strategies for managing future risks
- Market positioning
Optimal positioning for future growth
- Exit planning
Long-term exit strategy development• Data Analysis
- Market reportsRegular commercial property market updates
- Sales data
Analysis of property transaction information
- Rental data
Tracking of lease rates and terms
- Yield analysis
Assessment of return metrics
- Demographic data
Population and social trend analysis
- Economic data
Broader economic indicator tracking
- Comparison metrics
Benchmarking against market standards• Strategic Planning
- Portfolio reviewRegular assessment of property holdings
- Market alignment
Ensuring strategy matches market conditions
- Growth opportunities
Identification of expansion possibilities
- Risk management
Ongoing risk assessment and mitigation
- Performance targets
Setting and monitoring investment goals
- Asset allocation
Strategic property type selection
- Exit timing
Planning optimal sale timing• Market Research Resources
- Industry reportsProfessional market analysis publications
- Government data
Official statistics and forecasts
- Property databases
Commercial property information systems
- Network insights
Industry contact information sharing
- Economic forecasts
Future economic condition predictions
- Local market data
Specific location market information
- Expert opinions
Professional market commentator viewsCOMPREHENSIVE COMMERCIAL PROPERTY INVESTMENT SUMMARY
Key Strategic Takeaways:
- Investment Fundamentals
- Commercial property offers higher yields (5-8% net) than residential (3-6% gross)
- Longer leases (1-30 years) provide stable income
- Tenants typically pay outgoings, improving net returns
- Higher initial capital required (30-40% deposits) but better cash flow
- More sophisticated management required but greater value-add potential- Property Selection Criteria
- Location remains paramount
- Transport access critical for all property types
- Tenant quality directly impacts property value
- Property versatility enhances long-term viability
- Future development potential important consideration- Due Diligence Requirements
- Much more extensive than residential property
- Detailed tenant business analysis essential
- Comprehensive lease review critical
- Building compliance and condition vital
- Location and demographic analysis crucial- Financial Considerations
- Understanding net vs gross yields
- Capitalization rate impact on value
- Importance of stress testing scenarios
- Multiple financing options available
- Tax structure implications significant- Risk Management
- Tenant quality assessment
- Market cycle awareness
- Vacancy risk mitigation
- Interest rate exposure
- Asset diversificationCritical Success Factors:
- Professional Support
- Experienced commercial property manager
- Commercial-focused solicitor
- Specialist commercial mortgage broker
- Quality accountant for structure advice
- Building and compliance inspectors- Property Performance
- Strong tenant covenant
- Sustainable rental levels
- Regular rent increases
- Manageable outgoings
- Value-add potential- Market Understanding
- Property cycle awareness
- Sector-specific knowledge
- Local market dynamics
- Economic indicators
- Future trends- Financial Management
- Strong cash flow management
- Adequate cash reserves
- Debt management strategy
- Tax optimization
- Capital expenditure planning- Active Management
- Regular property maintenance
- Tenant relationship management
- Lease optimization
- Expense control
- Compliance monitoringLong-term Success Guidelines:
- Strategy
- Clear investment objectives
- Defined target market
- Risk management plan
- Exit strategy
- Growth pathway- Implementation
- Thorough due diligence
- Professional team engagement
- Proper structuring
- Quality documentation
- System establishment- Management
- Active property oversight
- Regular performance review
- Proactive maintenance
- Relationship management
- Market monitoringKey Differentiation from Residential:
- Higher yields
- Tenant pays outgoings
- Longer leases
- More complex management
- Greater value-add potential
- Larger initial capital
- More sophisticated financing
- More detailed due diligence
- Professional tenant relationshipsThis comprehensive approach to commercial property investment requires:
1. Greater initial education and preparation
2. Larger capital commitment
3. More sophisticated management
4. Professional support team
5. Active ongoing involvementSuccess in commercial property investment comes from:
1. Thorough understanding of fundamentals
2. Careful property selection
3. Comprehensive due diligence
4. Professional management
5. Active asset monitoring
6. Strategic long-term planning
7. Regular market analysis
8. Continuous educationThis investment class offers superior returns for investors willing to:
- Commit to proper education
- Engage professional support
- Maintain active involvement
- Take a long-term approach
- Implement proper systems
- Monitor market conditions
- Manage risks actively
Just buy REITs?
better hand these out to the homeless
Conclusion:
Private property and housing a sound investment when you live in it.
Commercial property risky unless land is scarce in a growth area.
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@metallum: In 2 years time, city house prices may have stayed the same or dropped a bit.
Housing market has cooled a fair bit.