Weather buying you’re first home, an investment property or commercial property. These helpful tips can be applied to every property acquisition.
Tip 1: Know your budget and when to walk away.
When it comes to commercial and investment property this one is obvious, as it must be based on numbers, emotions cannot play a part. I would offer the same advice when buying a family home but know it is harder to keep emotions in check. Therefore, it can sometimes save a lot of money and emotional stress to engage an acquisition surveyor to guide you through the process.
I would also recommend having a walk away number in mind before you place your first bid. I once got criticized for advising clients to know when to walk away from a deal. As I was advising clients to walk away from their dream. A dream can quickly become a nightmare, if you are stuck in a bad deal or over paid for a property. Remember a house is just four walls, it should not be a dream. A place to call home should be the dream and the four walls should not determine that.
Tip 2: Vision, if you don’t have vision get someone that does.
I am not talking about vision the marvel superhero. I am referring to understanding what is possible on a site, within a building or within a house. Because if you do not have any vision you will miss out on great property deals. Property experts know the pit falls and risks of property development and refurbishment. But property experts with vision know how to unlock a properties potential. They know what is possible and see opportunities others without their experience would miss.
Keeping an open mind is very important. Remember with the right advice and planning you can change a retail unit to a gym or change a kitchen or bathroom, knock down a wall etc.
Tip 3: Don’t be take In
Real Estate Agents use a range of marketing methods to maximize the value of a property for their clients. On the commercial side it is harder to be taken in by the marketing methods as investors and occupiers will do their research. There are some positive marketing methods now being used in commercial real estate. Including high speed internet and high building energy efficiently. In the long run in commercial property location and the quality of a build will win out over any marketing.
In residential property sales, marketing is key, and it is all about selling the dream. Therefore, it is important not to be taken in by the marketing and the dream. Show houses are marketing tools. Ask the real estate agent the cost of the fit out of the show house. This will be valuable insight when viewing properties.
Tip 4: Know the Area
With commercial real estate, the key factors are the catchment area, foot fall, employment stats, public transport, car parking and what is planned for the area.
With residential property many key factors are the same. Public transport, car parking, what is planned for the area, shops and school locations etc. However, you also must be very mindful not to be to near to a school or businesses as they can add to traffic congestion and parking issues at peak times.
Tip 5: Know the Adjoining Use/Development
Be aware of what is attached to the property you are looking to acquire. With commercial property it is important to know the service charge for the development and anything that might increase the service charge. Also, other neighboring occupiers’ requirements, such as opening hours, cooking smells, delivery times, as all could impact on your investment long term.
On the residential side, I always advise clients to avoid buying over a shop. Buying to live over a shop will always be a no in my book and I have had to remind myself of that several times. Issues with noise, deliveries, parking and smells can turn a home into a nightmare.
Tip 6: Timing is everything.
Timing is everything in property, get in and out at the right time and you make a killing. They also say do not wait to buy real estate, buy real estate and wait.
That said if you do not have time to properly search and evaluate property deals. Engage someone that does have the time and experience. I once pitched for an acquisition requirement and the client said why would I pay you a fee to find a property when I can do that myself. Fast-forward a year and they still haven’t found a property and property prices have increased by 10%. The fee would have been irrelevant at this stage.
Tip 7: Seek Advice
That saying “If you think it’s expensive to hire a professional, wait until you hire an amateur” comes to mind. If you are not buying property all the time, you are an amateur and you are putting one of your biggest investments ever in the hands of an amateur. Especially when it comes to commercial real estate investment.
I am no electrician, but I can change a light bulb. I could have a go at rewiring a house with some research. However, the odds of me setting fire to the house and worse are very high. And even if I did pull it off there is always a risk at some point in the future a fault could cause major issues.
It is always best to engage a professional that sees the risks and pit falls daily and know how to avoid them.
If you are looking from more advice please www.flemingre.com or email [email protected]