The Flow of the Commercial property in Australia

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The Flow of the Commercial property in Australia
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'The best investment on earth is earth.'

-Louis Glickman

Buying a property is always a big decision. This is the time when one has to think thousand times before taking a step, because buying a property involves a great risk. Having the right capital is not the only factor to consider when you buy a property and making a long lasting profitable investment. You need to have a great amount of expertise in this regard.

If you are not cautious, you can suffer a huge loss. So, it's always a must that you should make the right choice at the right time. Thinking about buying a commercial property shows that you are thinking something big and probably something out of the box. In today’s market there are a lot of investors who are ready to buy the property which in future can pay them back in a beneficial way. Previously the market of Australia has seen a huge slump but now it is improving day by day. There are a lot of questions to consider when making up your mind about buying something, this article will answer most of these questions when it comes to buying a property.

Do we really have to buy a commercial property?

There is a famous joke for the commercial property:

'If you think nobody cares you're alive, just miss a few mortgage payments.'

The biggest and healthiest investments of the world are to invest your money in property, this will not only increase your assets but will also help to increase the economy of the country and also it gives you a sense of security in the society.

But while you go for buying a property you need to answer a few things yourself, like whether you can afford it or not? Whether the property is worth the price? Does your company really need this property?

While evaluating a property, here are some suggestions which can help you end up having a successful and profitable deal.

  • Learn to think like a player of commercial property. If you learn to make a successful deal then you will see a bigger cash flow with the property.
  • Set the parameters before making a deal. For example look for the key members, who are they? How much can you afford? How much are you expecting?
  • Learn to figure out the pros and cons of the properties which you are looking to buy. The only way to make a successful and a healthy deal is through knowledge and the willingness to walk away from a bad deal.
  • Always look for the motivated and interested investors. Always look for the people who are eager and ready to invest in the property. If the seller is not a motivated person then he or she won’t be able to convince you and will end up having a negotiating badly or will make a deal which is not beneficial to the seller.
  • 'The three pronged' is the latest approach that is used in the real estate and commercial property businesses. This is where the sales person uses 3 options to sell a property, i.e. it may be 3 options in the same property, or 3 property options to sell 1 of them. For example you may call up about 1 of the agents prospective properties for sale and they will have at least 2 other alternatives properties similar to the one that you are looking for as alternative options. This is a tactic to help them reduce your negotiation skills and help make a sale.

For Example:

  1. You are talking to them about a property in a certain area and try to negotiate by saying that you don’t like the price, they offer you 2 similar properties which are cheaper to gain the same goal of selling you a property.
  2. You are talking to them about a property in a certain area and try to negotiate by saying that you don’t like the location, they offer you 2 similar properties which are in different locations to gain the same goal of selling you a property.

Is Leasing a Better Option?

Property investment exists everywhere around world but there are also quite a few options for leasing property.

Whether you purchase a property or lease a commercial property this is one of the biggest decision one has to make while expanding their business. In my humble opinion, purchasing a property is not a good choice because this will bound a person for the specific duration of his life and the interest rates change constantly which makes it harder to gauge cash flow and expenses over a long term period.

Leasing a property can be beneficial for those small business owners who at present are not able to afford to buy a property of their own. Because they have to make a tough decision in order to buy a property as well as to start up their business.

As mentioned above for the small business owners it would be a better option to go for leasing a commercial property rather than buying a property for their small business. This will also save them from the heavy investment needed to actually buy a commercial property for sale. This can be too much to ask from business owners who recently started walking the path of entrepreneurs.

The Bright Side of Buying a Commercial Property

  • Gives you a freedom for doing the business
  • Property investment is always a better investment
  • You don’t need to request approval from the owner to make changes
  • Investments for the betterment of the property increase its value
  • Higher capital gains
  • Have a high potential for rental yields.
  • Give you the high access to credit and leverage, and the banks are ready to offer you loans because of the value of the property.
  • Business benefits increases
  • Gives you the ongoing income

The Dark Side of Buying Commercial Property

  • Due to fluctuation in economic conditions there are high chances of loss.
  • There is no clear guarantee that the investors will make money from the property.
  • Property requires maintenance which requires a lot of money in order to own it.

Rise and Fall in Property of Australia

Over the past 5 years Australia has been facing a slump in property values due to the economic environment. But now the market is showing a better sign of recovery and some of the lowest interest rates and affordability. People are gaining trust in the Australian government for investing in the property.

Over past couple of years there has been approx. a 10% increase in the prices of property prices. The eight capitals of Australia have seen a great expansion in terms of investment in residential and commercial property. The biggest and foremost reason in the downfall of the property sale was the taxation and the regulation regimes. The impact of demand is more than the supply. The prices are so high that one can only dream to buy a property but now in 2014 there are high hopes there will be a rise of 20% in the property sale.

There are high hopes that the economic conditions of Australia are going to improve this year and we will find a better growth in the property market of Australia.

  • There will be an increase in the leasing of office leasing and more people will be moving out of their residential offices.
  • Industrial leasing demand will be growing.
  • Commercial Property Sales will be on the rise.
  • There will be an increase in the shopping centers, stores etc.

The citizens of Australia have high hopes this year that they are going to have a good economic rise in their country. They are expecting flexibility in the tax rates and also the prices to get reasonable and affordable. The interest rate is the biggest reason that people don’t think of going towards buying a property. The only thing that can save Australian citizen and help them buy a property is to look for the interested investors who know how to make money out of it.

Auctions are another solution to increase the sale of the property as from previous years this trend was not even getting hype because of the unbearable interest rates on it so people stopped going to such auctions. But now with the stability of the market there should be much more auctions.

Author Info Manish Khanna

Manish is founder of Business2sell Group of Websites. 

Business2Sell.com.au is one of the leading business and franchise for sale listing websites. We work with our business brokers, commercial agents, franchisors and private sellers to help them connect with the right buyers for their opportunities. 

With website now functional in Australia, United States, United Kingdom, Canada, New Zealand and South Africa. We have over 18,000 businesses for sale listed, with over 220 Business Broker and Commercial Agent. 

I have over 20 years of experience in Web Industry; I have been involved in websites industry since the early years of 1996-97. In my professional career I may have worked for over 10,000+ websites. My Specialty is to build portals or complex online applications.

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