A common goal when purchasing commercial property in Australia, is looking for an investment that will generate income and potentially increase in value over time.
While taking the plunge into commercial property market may seem like a big financial investment, it’s not out of reach, especially when you take the time to arm yourself with the knowledge and market insights that could save you thousands of dollars upfront, and long term, realise a positive return.
Here are seven things you should consider before purchasing a commercial property:
1. Budget:
Starting the search with a budget in mind helps narrow down your options, reduce distractions and helps focus on properties within your price range. This might seem like an obvious suggestion, however, researching different price points will ensure you have a realistic expectation of the properties that you can afford, while also providing visibility on how much additional equity you might need if you are unable to afford a property that align with your desired investment objectives.
2. Location:
The location of your commercial property can have a significant impact on its value and potential for success. Look for properties in areas with strong economies, good transportation links, and a mix of businesses and amenities.
3. Local Market:
It is important to familiarise yourself the local real estate market, including vacancy rates, rental rates, and the types of businesses that are successful within the area. This enables you to make a more informed decision to select a property that best fits your investment goals long term.
4. Property Inspection:
Engaging a Perth commercial sales agent to conduct a property inspection on behalf of you is highly recommended. This way, you get support from someone who is experienced in identifying (or anticipating) potential issues with the property. These could include hidden costs such as structural damage or the need for repairs, which will give you greater room to negotiate a fair price if you decide to make an investment.
5. Terms of Sale:
It is important to negotiate the terms of the sale with your seller, these should include the price of the property, any contingencies, and any repairs or renovations that need to be made. Engaging the help of an experienced, local commercial property agent during this phase is highly recommended for first time investors to ensure you start your investment portfolio with a strong foundation.
6. Financing:
If you’re planning to finance your commercial property purchase, you’ll need to secure a loan. This can involve working with a lender to get pre-approved for a loan and submitting an application.
7. Close the sale:
Once all the terms of the sale have been agreed upon and the necessary paperwork has been completed, you’ll be ready to close the sale and take ownership of your new commercial property.
Buying a commercial property in Australia can be a complex process, but with careful planning and due diligence, you can find a property that meets your investment goals and sets you up for success. If you are in the market to invest in a commercial property and need some advice, Burgess Rawson WA’s team of experienced commercial property experts can help. See our current portfolio of properties or call our team to find out more.
