Promoting your commercial property can be a tricky thing to deal with especially if you don’t have the ideal strategy in place. This resource will explain the step by step procedure for independently selling and marketing your own commercial property investment so you can get the best possible outcome when you sell. Irregardless of whether you are looking into spa retreats in Tasmania or an office building in Perth, our goal is to give you enough information so that you’ll be able to target investors, developers and possible owner-occupiers, embrace a wide (yet cost-effective) marketing campaign that brings out those buyers best suited to your house and sell your own commercial property at the greatest possible price, whilst saving you thousands of dollars on commission charges and other associated costs. In these pages, you have all the answers to complicated issues broken down into an easy-to-read format. Whether you set the starting line at the beginning, at the middle, or simply select a section that interests you. It doesn’t matter where you begin because the most important thing is that you have this handy information at your disposal.
WHEN IS THE BEST TIME TO SELL?
The solution lies in the summit phase. This phase comes after the expansion phase and before the contraction stage. However, the biggest problem with selling this is knowing exactly where the top is. Here are two hints that have never failed us or other retail property agents yet: observe the rents and vacancy rates separately — after rent prices become normal and become flat for three consecutive months or more, you’ve reached the top. Or to get another indication of this: after vacancy rates are at a three-to-five-year low, then you have reached the very top. It is that easy.
WHEN IS THE BEST TIME TO BUY?
After asking yourself “when is the best time to sell?”, you should also put yourself in the shoes of your buyers and ask, “when is the best time to actually making the purchase?”. This way it’s possible to acquire a better understanding of the mindset of a person who’s actively seeking to get their next commercial property and remain 1 step ahead of them. However, the honest answer to this issue is that it depends. If you’re a smart investor, you need to buy during the bottom or center of the growth cycle. That way you are purchasing on trends and adhering to the current market and other investors in a safe way. This goes across the type of property you are buying; it does not matter if you intend to buy a building in Melbourne CBD that was utilized as function rooms, or if you were hoping to buy an office building right at the heart of Sydney.
However, if you’re a brave investor you’ll probably start earlier during the retrieval phase.
WHAT IS YOUR PROPERTY WORTH?
There are two ways you can go about valuing your commercial property: do it yourself, or get someone else to do it for you. The former method will save you money and give you a better idea of the intricacies of your property which may increase or reduce its value, however it can be a laborious undertaking. The latter method will assign this important responsibility to a seasoned professional who will be able to give you an accurate value of your property, however, you may lose out on a great learning experience and of course, need to pay for their services.
DO IT YOURSELF APPROACH
The three essential ingredients that you need to know so that you can correctly value a block of property are income, expenses, and debt. The first step would be to analyze and compile the income part, then analyze and maximize the cost part, and lastly add a loan or mortgage to the general picture. When you have these parts you can figure out the net operating income, cash flow, cash-on-cash yield, and capitalization (cap) rate and thus come to a conclusion regarding what your property is worth in the market. It is perhaps easier to gauge its worth if your property is something like that of the Melbourne Stadium, but for most investors, valuation is essential. When you are assessing any land, keep the following in mind:
Research your entire expenses
One of the very understated and misunderstood facets of land analysis is expenditures. Obviously, plugging real and accurate operating expenses into your investigation isn’t simple, simply because often that information isn’t available readily. You’ll get your most trustworthy expense data from the property manager or by a specialist retail valuer who oversees similar projects, not from your agent. Look at property expenses three different ways: Look at it in terms of expenses per unit. Fundamentally, divide the total expenses by the number of units. Take a look at expenses as a percentage of the income. By way of instance, as a rule of thumb, for flat sizes that are larger than 50 units, we take expenses to be 50 percent of the earnings. Have a look at expenses in the form of expenses per square meter. You get this amount by dividing the total expenses from the entire square meters of this living space.
Don’t forget about the taxation
Be wary of property taxes stated in your analysis. Make sure that all taxes on your investigation are obtained in the property tax assessor’s office and inquire how property taxes are reassessed upon transfer of ownership.
Verify your investigation
Verify figures in your analysis by doing just a bit of research. For example to learn when you’re able to raise the rent of your property, even on bigger venues that have been utilized for romantic weddings, call the property managers of similar properties in the region and do your own rent poll; it only takes a couple of minutes to do and the info is invaluable. Then figure out all of the ways that you can lower your costs, or if you’ve got a property supervisor, contact them or another professional property manager and conduct the expense scenario by them; easy to do with outcomes worth their weight in gold.