Real Estate Information |
|
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.
MORE RESOURCES: Rules that helped set real estate agent commissions are changing. Here's what you need to know The Seattle Times Landmark Settlement Breaks Up the Real Estate Cartel The American Prospect Top real-estate CEO sees decades of housing pain ahead: 'What the Fed did will have a 30-year tail on it' Yahoo Finance Rules that helped set real estate agent commissions are changing. Here's what you need to know The Associated Press Five Ways Buying and Selling a House Could Change The New York Times Real estate commission change shakes industry's foundation University of Miami: News@theU Local real estate agents face uncertain future with new negotiation rules WJHL-TV News Channel 11 The Realtors' Big Defeat The New York Times Central Texas housing experts talk impacts from $418M real estate settlement - 25 News KXXV and KRHD Central Texas housing experts talk impacts from $418M real estate settlement 25 News KXXV and KRHD What National Association of Realtors agreement means for Texas real estate KAMR - MyHighPlains.com CrewBaltimore’s mission to accelerate women’s success in real estate Afro American Newspaper Investigation underway after 44-year-old real estate investor seen on video firing shots off boat docked at Lakeview ... WSVN 7News | Miami News, Weather, Sports | Fort Lauderdale National lawsuit could shakeup housing market, cut into real estate agent commission 11Alive.com WXIA A luxury agent on how the NAR settlement will change his business The Washington Post What Seattle-area homebuyers should expect after national settlement The Seattle Times Once America's Hottest Housing Market, Austin Is Running in Reverse The Wall Street Journal Settlement will affect Iowa homebuyers KCCI Des Moines Swimmo Invest Opens up a New Chapter in the Real Estate Industry Markets Insider Cities Face Cutbacks as Commercial Real Estate Prices Tumble The New York Times New rules on real estate commissions could change the housing market game LehighValleyNews.com Illinois real estate: Home sales in Peoria, Tazewell, Woodford counties Peoria Journal Star Realtor group will pay $418M to settle commission lawsuits The Associated Press Investigation underway after 44-year-old real estate investor seen firing shots off boat docked at Lakeview home in ... WSVN 7News | Miami News, Weather, Sports | Fort Lauderdale Rules that helped set real estate agent commissions are changing. Here's what you need to know KXLY Spokane Chicago Voters Face Choice on Tax to Fund Homeless Programs The New York Times Foreclosures Are Rising—Especially in This One State—but Not for the Reason You Might Think SFGATE Realtors Reckon With a Seismic Shift to How They Get Paid The Wall Street Journal Israeli real estate event: Legal complaints escalate NorthJersey.com Rules that helped set real estate agent commissions are changing. Here's what you need to know News10NBC What the death of the 6% real estate commission means in D-FW The Dallas Morning News Is real estate the best investment in 2024? Racine County Eye Changes could be coming to fees related to home buying process Fox 46 Charlotte Real estate commissions, unassailable for decades, could crumble after landmark settlement The Denver Post Bay Area Real Estate Executive Charged with Wire Fraud, Identity Theft in Investment Scam - Hoodline Is the Era of the Celebrity Real Estate Agent Over? Industry Reacts to Settlement That Could Slash Commissions Hollywood Reporter China's Real-Estate Market Just Set a Record—but Not a Good One The Wall Street Journal The NAR Settlement's Impact On Commissions And Home Prices Financial Samurai National Association of Realtors Agrees to Slash Commissions to Settle Lawsuits - The New York Times Real estate lawsuit settlement upends decades-long policies that helped set agent commissions WQAD Moline Manhattan Real Estate Update westsiderag.com Realtors Reach Settlement That Will Change How Americans Buy and Sell Homes The Wall Street Journal Rules that helped set real estate agent commissions are changing. Here's what you need to know Antigo Daily Journal A commission settlement may affect housing market 9News.com KUSA Agent Migration and the Power of New Mike DelPrete End of 6% real estate commissions could mean lower home prices The Atlanta Journal Constitution A Look Into the Future of Home Buyers' Agent Commissions The Wall Street Journal Blackstone, World's Top Alternative Asset Manager, Eyes Record Highs Amid Real Estate Bottom Investor's Business Daily Antitrust ruling rocks real estate: Buyers brace for shift in commission structures Straight Arrow News 4 ways buying a home in D-FW may change after landmark Realtors settlement - The Dallas Morning News 4 ways buying a home in D-FW may change after landmark Realtors settlement The Dallas Morning News National Association of Realtors to cut commissions to settle lawsuits. Here's the financial impact. CBS News Commercial Real Estate's Systemic Threat: Separating Fact From Fiction Commercial Observer Jill Schlesinger: Real Estate Settlement - My Bellingham Now My Bellingham Now - 4 Ways a Settlement Could Change the Housing Industry The New York Times |
RELATED ARTICLES
Maltas Market Battle With new destinations such as Bulgaria, Slovenia and Croatia offering two and three bedroom apartments for sale for £50,000, there was concern last year among some Malta estate agents that 2005 could see a drop in the number of UK and Irish buyers choosing to buy a holiday home on the island.With good all year round temperatures enticing many buyers for the winter months as well as the summer, driving on the left and a warm welcome from the local population who nearly all speak English, Malta has been popular for some years among overseas property buyers. How to Buy Your Own Home Buying Your First HomeBuying Your Own Home isn't nearly as complicated as some folks make it out to be. Your first step should probably be to contact a Mortgage Broker (check out the on-line Mortgage Companies on my Site -- they're a great way to quickly find out how much you qualify for, and they often have better rates than the standard Banks. Crossing the Gap from this Home to the Next: Bridge Loan So you're thinking of getting into a bigger house. You call up the real estate agent and make an appointment to go see what the market has to offer. Saving for a Home So you want to buy a home? This is a big step for anyone, and there are many factors to consider, not the least of these is how to get the money for a home. Sure there are loans available for home purchase, but you must have cash on hand to cover expenses such as fees and closing costs that might not be able to be covered by a loan. Buying Property In Spain It's high time someone advocated the use of common sense and suggested that those people looking for that dream home in Spain actually apply a cautious approach to buying!After all, real estate is such a significant purchase for most people that you'd think people would be only too ready to think twice and long and hard before committing to purchase - especially when buying abroad where the rules and customs differ greatly to what we may be used to.But it seems that so many people are seduced by the sunshine in Spain and by aggressive and slick agents and developers that they are willing to purchase unseen, to buy off-plan or even remotely via the internet and to basically purchase without the slightest clue about just what it is they're getting for their money. Encouraging Debt Most of us don't talk about money, finances, credit, debt.. What Is Home Staging And How Does It Help To Sell My House Home staging is the concept of preparing a house for sale. This can involve everything from removing clutter, re-arranging furniture and in some cases re-decoration, ensuring that the house creates a great first impression and helps buyer's to feel that they could really live there. Selling Your Own Home: 10 More Tips Selling your own home can be a time-consuming and frustrating process. Sometimes, though, in the right market, it makes sense to save thousands of dollars in commission and do it yourself. Grab Quick Profits As Real Estate Prices Soar Real estate values rise and fall in cycles. Currentlyhome prices are nearing a top in many areas. Be Careful - A Real Estate Agent Could Lead You Astray The real estate agent is a valuable source of potential deals for you as an investor. They have access to the multiple listing resources and of course, have a monopoly on this information so they have to be part of your game plan as an investor. How to Buy Fixers for Profit Do you dream of becoming a multi-millionaire real estate investor? Here's how to get started: find a bargain "fixer-upper" owned by a worried seller. The hardest house for a homeowner to sell is a "doghouse," "dump," or "fixer-upper. Follow-Up - The Key To Successful Closings If everyone always did everything they said they'd do, we'd all be a lot richer. Unfortunately, tasks are overlooked, and the ball is often dropped. How to Eliminate Risk in Real Estate Investment Avoid 12 Common Mistakes Made by Novice Investors and Ensure High Rates of Return!Real estate investment has provided many investors with positive cash flow, tax benefits and satisfaction of making an impact in others lives. Like any investment however, real estate has intricate nuances and market trends that when ignored can cause an investor tremendous heart ache. The Value of Foreclosed Property The discount on a foreclosed property is not as great if the state allows deficiency judgments by lenders against borrowers. In contrast, the discount is larger if the property is being sold in a state that requires foreclosures to proceed through the judicial system. Property Investing Secrets 4 Property Investing Secrets:How to Sell to 100% of the Market Place Using Lease OptionsWhen property investing, you will find if you make houses easy for people to buy, your properties will become easier to sell. Most people who are selling houses today are selling to the 80% of the population who have good enough credit to qualify for a bank loan. Cutting Edge Real Estate: Is There Anything New? Part 1 The world of real estate has pretty much stayed the same for decades. It's no different today than it was 50 years ago. The Real Estate Agent Alphabet Alphabet Letters after a person's name seem to bestow some kind of special prestige. PHD, MD, ESQ are common. Boston Real Estate - You Still Have Considerable Control Over the Sale of Your Boston Home Boston real estate is a hot topic. Daily newspaper articles comment on whether or not a bubble exists in the Boston real estate market, when and if it will pop, how interest rates affect the market, why Boston residents are snapping up interest-only loans, and how foreign investors in our treasuries keep interest rates low. Buying Outer Banks (OBX) Investment Property So, you're thinking of purchasing a rental property at the beach. Historically, real estate investments have proven to be a wise investment strategy. Make Money As A Slumlord Be a slumlord? Okay, I got your attention, now the truth. I really don't recommend that anyone endanger their renters with unsafe housing. |
home | site map |
© 2006 TIGER MEDIA |