Investing In Commercial Real Estate

Wednesday, February 15th, 2017

Whether you’re a business owner looking to get out of the commercial leasing cycle or a savvy investor looking for a fresh opportunity in real estate, away from the residential real estate options, it’s important to understand the things that can impact on the quality of your commercial property investment.

 

Strong Economy = Smart Property Investment

The one thing to consider first is that a strong economy is fundamental for any successful commercial property investment.

Commercial real estate markets are at their most dynamic when supported by strong local, national – and international – economies.

When the economy starts to grow, one of the early winners is the local transport industry – driven by a growing demand for materials. The flow-on effect, as more associated industries experience growth is more manufacturing (warehouse space), more sales (retail) and more management (office space).

Some other factors also play an integral part in the viability of commercial space:

 

Interest rates:

When interest rates rise, consumer spending is impacted – and this can slow the economy and real estate market in both the residential and commercial sector. Staying up-to-date with business news is always a good foundation for your property investment knowledge.

 

Infrastructure development

Trends in development of infrastructure also help increase demand for commercial properties. Stay connected with local council websites to stay on top of changes to road expansions and public transport changes. The better access transport companies have to areas, the more likely that area will have thriving commercial property growth.

 

Population Demographics

Different demographics of a suburb’s population have a direct impact on the type of real estate that is most sought-after in that area. For example, ageing baby boomers have a need for easy healthcare services, while new suburbs with young families have a need for basic retail and childcare facilities.

As employment trends continue to see more people working from home or near home, the rise of small suburban office spaces is one to watch.

 

Population growth

What suburbs are on the move and set to boom? This is where the potential for great returns on commercial property can be found. For suburbs that are growing, creation of new shopping strips offers plenty of commercial real estate potential.

 

Understand the risks

Any property investment comes with risks and it’s important to understand yours. Talking to local real estate agents who specialise in commercial real estate investment is a good start and having a trusted loan broker to help you navigate your best commercial property loan options is also a positive thing.

Remember – any sensible real estate investment – whether commercial or residential – should be entered into with an eye on long-term gain. It is rare to make a quick win in the property market so do your research and make the purchase that’s right for.

 

If you have any questions about your finances, either personal or business, please do not hesitate to contact Loans Actually on (03) 8805-1850 or email glenn@loansactually.com.au

 


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