OVERALL, people appear to have returned from their Christmas break with a renewed sense of confidence — certainly as far as Commercial property is concerned.
In a recent article, I covered the reasons for this change.
However, investors are also being buoyed by the past two weeks of solid economic data — including a welcome boost to Australia’s trade balance, as well as retail turnover increasing by 0.9% during January.
And with the corporate reporting season now over, the stock market has provided the ultimate confirmation of things having bottomed out.
No longer are people concerned about falling property prices. Instead, there is a growing fear they may actually be missing the full benefit of the upswing.
The Business of Analysis
So let’s get down to business and explore several questions you need to be asking — as part of analysing any properties you may be considering.
- What net rental are they generating?
- What does the sale price represent per square metre?
- How do both these figures compare to market levels?
- What would it cost (per square metre) to build the property today?
Forming a Complete Picture
In an earlier article, I gave you several simple ways to uncover a good deal. However, these further 4 questions will help you gain an even better appreciation of what’s needed to fully assess your potential acquisitions.
Establishing how much a property is worth, occurs through comparison with other similar properties.
And in the absence of many years of study to become a qualified valuer … you now have a simple Toolkit to use, as part of your initial research.
For a more detailed final assessment you will still need to involve your trusted consultants (for legal, property, construction etc). But you are now more than capable of creating your own shortlist of potential starters.
What’s important is for you to take action right away, if you have any plans at all to acquire Commercial property.
Because otherwise, you will find yourself joining the mid-year rush — as the penny finally drops, and investors realise the upswing is already underway.