Setting aside the ability to alter the commercial property itself to improve its returns. I'd just like to brainstorm what makes a good investment property.
Basics
1) High CAP Rate?or at least high relative to local market
2) High WALE
3) Strength of tenant (e.g. Govt. or multinational)
4) comprehensive lease - especially in regards to guarantees
5) Low local vacancies
6) low volume of new stock being built
7) low ability to build new commercial space
8) High cost per square metre to build relative to buying
But how about the less obvious stuff?.like Who make a good tenant?
- Is having a successful fish and chip shop as a tenant a good idea - or bad? Although you might be able to order your fish and chips online, you still will only buy locally.
- Is retail too risky?
- Proximity to public transport +/- ?
- Surely an increase in local population must result in (after a lag), an improvement in demand for local commercial property
- Parking ?
- Near a main road / OR on a main road. Which is better?
I would really like to know what those who actually purchase commercial property look for? Alternatively how do they structure the purchase / lease, to maximise returns over the longer term.
Finally what tricks to they use to turn an ok deal into a great one?such as splitting a commercial space in half, and putting two tenants in place for a higher net return.
ANY thoughts / comments appreciated.
Basics
1) High CAP Rate?or at least high relative to local market
2) High WALE
3) Strength of tenant (e.g. Govt. or multinational)
4) comprehensive lease - especially in regards to guarantees
5) Low local vacancies
6) low volume of new stock being built
7) low ability to build new commercial space
8) High cost per square metre to build relative to buying
But how about the less obvious stuff?.like Who make a good tenant?
- Is having a successful fish and chip shop as a tenant a good idea - or bad? Although you might be able to order your fish and chips online, you still will only buy locally.
- Is retail too risky?
- Proximity to public transport +/- ?
- Surely an increase in local population must result in (after a lag), an improvement in demand for local commercial property
- Parking ?
- Near a main road / OR on a main road. Which is better?
I would really like to know what those who actually purchase commercial property look for? Alternatively how do they structure the purchase / lease, to maximise returns over the longer term.
Finally what tricks to they use to turn an ok deal into a great one?such as splitting a commercial space in half, and putting two tenants in place for a higher net return.
ANY thoughts / comments appreciated.