Deprecated: mysql_connect(): The mysql extension is deprecated and will be removed in the future: use mysqli or PDO instead in /home/a26f9f83/public_html/articles/includes/config.php on line 159
Investing In Commercial Property > NetSparsh - Viral Content you Love & Share

Investing In Commercial Property

Investing in commercial property is well beyond the financial means of most people. Few can afford the large sums of money involved in buying commercial real estate. For most of us our investment in real estate is limited to where we live - our home.

But unfortunately our home doesn't generate any income or cash flow. In fact it probably costs us money in maintenance, rates and upkeep.

Sure the financial incentive to invest in your own home is to offset the cost of renting or the capital gains you get when you sell your house if it's value has gone up.

Most financial advisors will tell you the best investment strategy is to pay off your home mortgage as quickly as possible to reduce your debt.

But what about after that if you want to invest in property? You have a choice - invest in another residential property or a commercial property.

Residential properties can often provide a good cash flow from rent, but there are associated hassles with getting good tenants, poor tenants trashing your property and the ongoing cost of maintenance. If you like playing the role of the landlord and being involved in all those activities great! But what if you want a hassle free commercial property professionally managed.

An increasingly popular investment amongst smaller investors and retirees is through syndicated property trusts. This is known as direct property investment where smaller investors buy small parcels of a larger property through a prospectus. These projects are managed and marketed by licensed property dealers.

The prospectus is lodged with the Australian Securities and Investment Commission and the property and syndicate is professionally managed.

As of December 1999 there were 77 Property Syndicates operating in Australia with more than $1.45 billion invested. Nearly 60 per cent of these investments use borrowed money, known as "gearing".

The benefits for investors buying into property syndicates is they can purchase relatively small parcels, for example as little as $10,000 and gain exposure to the commercial property market.

There is also the added benefit of the commercial property market often being in negative correlation with the share market so investors can spread their risk across their portfolio.

Another benefit provided is the regular income provided by syndicated property trusts, high yields and relatively low risk.

A typical breakdown of a property syndicate is the property management company buys a commercial building ranging from between $10 to $30 million and then they market this to around 300 individual investors who each have an equity subscription of between $40,000 and $50,000 each.

Simon Toovey is the Managing Director of Glenmont Properties a Perth-based property syndicate.

He says their main objective is to invest in properties that have quality tenants, long-term leases, strong returns and good potential for capital growth.

"The benefits of investing in a property syndicate are that it can enhance your lifestyle by providing a regular income, you can set and forget it," he said.

Toovey gives the example of a typical investor profile of someone looking for secure, regular income rather than capital growth.

'The most important aspects are location, lease, tenant and management. It's no good having a lease when the tenant holding that lease is a $2 company. Ideally the tenant is either a government department or a major, "blue chip" corporation," he said.

"Ultimately, it's all about income. The right property investment should provide you with more income, income that will enhance your lifestyle, either now or in the future."

Property syndicates may not be for all investors but they do provide an option for diversifying your investment portfolio.

Ten Tips for First Time Property Syndicate Investors

1. Set your objectives and work out a budget for how much you want to invest.

2. Understand the risk/reward tradeoff. The higher the return the higher the risk. Aim for syndicates with a return of between 8 and 10 per cent.

3. Understand the risks of property syndicates. These are a potentially unfavorable market when selling, rising interest rates, member liabilities and future potential tax changes.

4. Remember this is a long-term investment, usually around 7 years. It is "illiquid"; meaning you can't take your money out of the investment during this time.

5. Identify investment syndicates with quality property in a good location with potential for capital growth. Ask for a copy of any independent investment and ratings reports.

6. Analyze the lease arrangement. Ask how much rent or income will the property produce, what the income growth is and how long will this continue?

Thomas Murrell MBA CSP is an international business speaker, consultant and award-winning broadcaster. Media Motivators is his regular electronic magazine read by 7,000 professionals in 15 different countries.

You can subscribe by visiting http://www.8mmedia.com. Thomas can be contacted directly at +6189388 6888 and is available to speak to your conference, seminar or event. Visit Tom's blog at http://www.8mmedia.blogspot.com.

In The News:

This RSS feed URL is deprecated, please update. New URLs can be found in the footers at https://news.google.com/news

New York Times

Recent Commercial Real Estate Transactions
New York Times
$54.50/SQ. FT. $366,022 approximate annual rent. 86 Chambers Street (between Broadway and Church Street). Manhattan. A national law firm, established to defend corporate clients against toxic tort claims and mass tort claims, has signed a five-year ...


Hartford Courant

Real Estate Alphabet Soup
Hartford Courant
BPO (Broker's Price Opinion): The real estate broker's opinion of the expected final net sales price, determined prior to the acquisition of the property. CMA (Comparative Market Analysis): The analysis used to provide market information to the seller ...
Common Mistakes Real Estate Investors Make Early On And What To Learn From ThemForbes

all 4 news articles »

Forbes

Scammers Are Increasingly Targeting Real Estate Transactions
Forbes
Scams targeting real estate transactions are on the rise, according to the FBI. Experts say there are many simple ways that consumers and real estate professionals can protect themselves and each other. Cyber crimes (crimes carried out by digital means ...


CNBC

Ryan Serhant's NYC real estate tips
CNBC
Ryan Serhant, “Million Dollar Listing New York” co-star, speaks to CNBC's Robert Frank about getting his start in real estate at the beginning of the financial crisis and gives his best selling ideas for New York City. Watch CNBC Live TV ...


RealtyMogul Recently Sold Three Commercial Real Estate Properties
Hastings Tribune
LOS ANGELES--(BUSINESS WIRE)--Sep 18, 2018--RealtyMogul, an online marketplace that pioneered providing direct real estate access to discerning investors, announced that it has sold three real estate properties on behalf of its investors. The ...


Marea Informative

Simon Property Group: The Top SWAN In Retail Real Estate
Seeking Alpha
I initially favored SKT over SPG, but have since learned that - especially in retail - quality matters. SPG is about as healthy a REIT as there is, with across-the-board strength in vital metrics, making it the top SWAN in the retail sector. However ...
SEC FORM 4 - SEC.govSEC.gov
SEC FORM 4 - SEC.govSEC.gov

all 77 news articles »

Baltimore Sun

Diebold Ellsworth Hughes, real estate broker, dies
Baltimore Sun
Diebold Ellsworth Hughes, a retired Edgewood Arsenal chemist who founded a Northeast Baltimore real estate firm, died of a heart attack Wednesday at the Johns Hopkins Bayview Medical Center. He was 83 and lived in Morgan Park. Born in Milton, N.C., ...


OCRegister

Is commercial real estate a good investment? (Part 2)
OCRegister
Last week we massaged the merits of investing in commercial real estate. Some of the scenarios: Why not, a liquidity event, a sale of the business that occupies, a mismatch of risk, a dispute, and finally aging owners. “You've achieved a nice portfolio ...


CNET

Nuclear bunkers are the new real estate craze
CNET
Real-estate paper The Real Deal reports that Rising S Company, in Texas, saw 700 percent growth in international sales last year, mainly in Japan. Bomb shelter makers tell me customers range from Silicon Valley's tech billionaires to working-class ...


Pensions & Investments

Invesco Real Estate picks head of European research
Pensions & Investments
Mr. Bessell, also a senior director-European research strategist, leads the firm's dedicated in-house research team across Europe. He also plays a key role in Invesco Real Estate Europe's investment strategy group by providing greater standardization ...

Google News

Should I Invest in Real Estate While Running an Internet Business?

Of course you should. I practice this for quite a... Read More

Property Investing Secrets 7

Property Investing Secrets:How Buying Real Estate Is Like Planning a... Read More

The Psyche of The Seller and The Tenant Buyer

For those of you who were not psychology majors the... Read More

What to Look for in a Real Estate Agent

Real Estate Agents play an essential, critical role in the... Read More

Saving for a Home

So you want to buy a home? This is a... Read More

Oh No! Something has Happened in Florida

The Florida housing market has attracted many foreigners to invest... Read More

Flipping Fixers: Using Transformation Psychology for Top Dollar

Satisfying and lucrative real estate investment depends upon your correct... Read More

Feel At Home Faster After You Move

Moving to a new community can be a great adventure,... Read More

Top Ten Suggestions for Selecting a Real Estate Agent

In order to find a real estate broker or agent... Read More

Avoid The Traps Of Finance

Most consumers are told where to get their mortgage because... Read More

10 Ways To Find Investment Properties

If you really want the best deals in investment properties,... Read More

Afford A Dream Home In Belize

Shopping for property in Belize is not as simple an... Read More

Will The Real Home Buying Guide... Please Stand Up?

Use Google right now and do a search on, "Home... Read More

4 Dangers In Flipping Real Estate

If you have recently purchased some real estate for investment... Read More

Selling Your Home Quickly, Even if You Have No Money For Repairs

Do you need to sell your home quickly? If so,... Read More

Estate Planning

Estate planning can enable you to control your property while... Read More

Property Investment Strategy: Securing Properties with Little or No Deposit

Property Investing often requires creative strategies to make it successful.... Read More

NAHB?s Voluntary Model Green Home Building Guidelines

The voluntary Model Green Home Building Guidelines are designed to... Read More

Make Money As A Slumlord

Be a slumlord? Okay, I got your attention, now the... Read More

Real Estate Investing: Sales and Negotiation Skills are Critical

Do you want to build wealth through real estate? You... Read More

Important Facts For Home Buyers

If you are considering buying a home or have spent... Read More

Regarding Real Estate On Leased Land

1.Why are there so many properties on leased land?There are... Read More

Negotiating A Short Sale ? The High Road to Huge Foreclosure Profits

Buying foreclosures can be extremely profitable for real estate investors.... Read More

Many Ways To Make Money In Real Estate!

Real Estate is a multi-faceted investment arena - there are... Read More

The Real Estate Bubble-When Will it Burst?

More and more individuals are realizing that real estate is... Read More