Smooth Start: 5 Steps to Take When Getting Started in Commercial Real Estate Investment

Business

The stakes are high when investing in commercial real estate. When getting started, you really want to make sure you go through everything with a fine-tooth comb. This may seem like an uphill battle, but it doesn’t have to be. Here are five steps to get your commercial property investment portfolio off the ground:

1. Join Forces with Property Professionals

Doing this on your own can be risky and tricky. That’s why you’re better off with people that know the ins and outs of commercial property.

A broker, an attorney, and a contractor are the crack team you need to ensure you do things right. This is a big project, so the more knowledgeable people you have on your side, the better.

You need a broker with experience in the kind of property you’re investing in. You need a lawyer to go over sales and purchase agreements while checking if the property has any legal issues attached to it.

A commercial real estate contractor will give you accurate pricing and protection against liability. A property management company with a commercial record will assist with professional marketing, higher occupancy, and solid accounting and reporting.

2. Associate with the Greats 

Though a lawyer, broker, and contractor can help you with most aspects of your commercial real estate venture, you shouldn’t stop at just hiring a qualified team. It’s also essential to develop relationships that will help improve your business. At the end of the day, opportunities are what you need, and you could use a lot of help in this regard.

You may even find more investors if that’s the type of arrangement you’re attracted to. From developers to architects and engineers, a whole host of professionals could be of service to you.

3. Learn, Learn, Learn

Having the right team and being in the right circles doesn’t mean you can sit back and relax. Learning more about the investing process will do you a lot of good. From YouTube to books and even podcasts, there are countless educational resources for you to explore.

There are even real estate investment groups you can join, which might offer you a great networking opportunity. You may even wish to work towards becoming a Certified Commercial Investment Member to gain deep insight into the industry.

4. Implement What You Know

No matter how much work you put into educating yourself, it’ll be meaningless if you don’t apply what you know. Regularly underwriting deals will teach you to separate the good ones from the bad ones.

A lot of money goes into this type of thing, so if you can master the skill, you’ll be doing yourself a favor. You underwrite, you make an offer, and then you do it again soon after. 

Your return will be greater, and you’ll be empowered by the ability to make deals on your own. It isn’t nearly as hard as it seems. Yes, people go to school for it, and the occupation is professionally recognized, but there’s even software you can use these days.

5. Have an Action Plan

You’ll have to figure out what kind of property you’re investing in. You may be interested in going the retail route, or perhaps industrial real estate is more to your liking. From multifamily set-ups to office space and even the hospitality industry, your options are endless. So, think about your objectives and preferences, and decide which niche is most suitable. 

Follow the tips above, and you’ll have a sturdy foundation from which to launch your venture into the world of commercial real estate investment. 

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How to cut your costs as a landlord

Money

Contrary to what some of your tenants might believe, cutting costs is an essential element of a landlord’s work.

With tax regulations less than favourable and property prices rising, life as a landlord has come incredibly expensive.

However, there are legit ways to cut your costs – without compromising on your tenant’s living conditions (a big no-go area, as any experienced landlord will testify).

Through today’s post, we will now take a look at some of these ways to show how you can supercharge your property business.

Can you do the day-to-day management yourself?

One of the most significant costs associated with being a landlord is the use of a lettings or property management agent.

Whilst these professionals can save you an incredible amount of time and hassle, their fees can quickly add up – especially if you have a large portfolio of properties. In today’s market, you’ll be looking at paying at least 10% of your rent per month, if not more. Many agents also advertise their percentage charge, but add VAT to the small print – meaning that the costs are even higher for some landlords out there.

Consequently, it’s definitely worth considering whether you could manage your properties yourself.

Of course, this isn’t always possible – especially if you live far away from your portfolio. Let’s not forget that you’ll need to be on call 24/7, which for some landlords, isn’t practical nor desirable.

Are short-term fixes really cost effective?

When a problem occurs in one of your rental properties, your natural inclination might be to call out a tradesman to fix it as soon as possible.

After all, the last thing you want is for your tenant to be living in an unsafe or uncomfortable property.

However, over time, quick fixes can sometimes cost you a lot more. Papering over the cracks can result in much more expensive problems – and it’s here where you need to assess the long-term impact of any fixes that you do decide to make. Ask yourself if the issue in question needs a longer-term solution before making a rushed decision.

Do you need to insure every element of your property?

When it comes to property insurance, it can be very tempting to insure every element of your property – from the building itself to the contents inside.

However, unless you’re offering your property furnished, you’ll generally need just a standard landlords insurance policy. It is then up to the tenant to insure their own belongings within the property.

Could you get a better deal on your mortgage?

If you’re a buy-to-let landlord with a portfolio of properties, it’s highly likely that you’re paying a lot of money in mortgage interest.

With rates starting to rise, now could be a good time to review your mortgage deal to see if you could get a better rate elsewhere.

It’s also worth considering whether you could remortgage to release some equity from your property. This could give you a much-needed cash injection to help grow your portfolio.

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Shed Permit Requirements in Victoria

Home/DIY

No matter whether you are having a custom shed designed or you are buying one directly from the store, understanding the regulations that your local council has in place will be important. With this in mind we are going to focus specifically on Victoria today, and take a look at what is required when you are looking to build or install a shed on your property here. When it comes to sheds, garages and even custom carports Victoria has a specific set of rules and regulations which must be adhered to. Failure to meet these requirements could easily result in a fine or worse, so being informed is always best.

Sheds

When it comes to store bought or custom sheds Victoria is actually quite flexible around what you can do. The rules in fact are very simple and you are only likely to require permission should you be looking to build a large shed. If your shed is larger than 2.4 meters in height or more than 10 meters squared, you will need a permit. Additionally if you are going to build the shed within 1 meter of the boundary or if you are attaching to the building to another structure, it is worth seeking advice to see if you need a permit.

Garages

In most cases the garage construction will require a building permit, unless it is smaller than the regulations listed, which is unlikely for garages. Now for most custom garages Victoria requires a permit as well as some additional details. For example if the work will cost more than $16,000, including materials, then you must ensure that you have domestic building insurance. If the work will cost over $10,000 then you must register a major domestic building contract. Additional rules include the requirement of using registered builders and licensed plumbers if you require water access.

Carports

Carports follow a mixture of the regulations which we have already seen with the construction of sheds and garages. In most cases a carport is likely to exceed the size limits which are in place to build a shed, which will mean that you have to get a permit. Rarely will costs of a carport rise above the minimums for a garage, regarding labor costs and materials. With this in mind it is likely that a basic permit is all you will need for this kind of construction.

Final Details

Each council does differ which is why you should seek advice if you are in any doubt about your requirements for the construction you have planned. Although it may seem like a problem, the reality is that applying for and having a permit granted is a very easy process. All local councils have application forms on their respective websites, and all you need is the measurements and the details of the build you have planned.

Always ensure that you have met the requirements and secured your building permit, before you kickstart any building work on your property.

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What Does it Take to Make a Great Landlord

Home/DIY

As someone who has been both tenant and landlord, I wanted to write this piece for anyone who is considering letting out property to ensure that you are doing the best for yourself, your property and ultimately, your tenants. There are a lot of landlords out there who simply don’t do the best by their tenants and this can not only make your and their lives more difficult, but can also prevent you from finding tenants who are happy to stay long term which is the best solution for any landlord. Let’s take a look then at what makes a truly great landlord.

Business First

It is vital to remember that renting out property is a business and should be treated as such, it is not a hobby or something you do in your spare time. Because of this you need to ensure that you are professional at all times, the tenants are your clients and they should be treated as such. Make sure that you have secured both the property and the tenants with great landlord insurance, I like to use homelet.co.uk/landlord-insurance/, the choice is yours but make sure that you have sufficient insurance.

When it comes to payments and information that you need to give your tenants, ensure that they receive them in a timely manner, doing so will make it clear that you expect the same in return when it comes to paying rent.

Be Responsive

You are letting out your property as it has been shown to your tenants and if anything should go wrong with the property then you need to be on hand to find a solution. So many landlords that I have either worked with or that my friends have worked with have been painfully slow when it comes to responding to problems. If you want to be  a great landlord then you need to fix problems as soon as they arise.

Screening Process

The one thing that costs landlords more money than anything else is unpaid rent, trashed properties and midnight disappearing acts. You can never totally avoid the possibility that this could happen but you can reduce the chances by following a thorough screening process and use due diligence. Ensure that your prospective tenant has no recent evictions, no recent felonies and has good references from previous landlords, you should also be asking for 3 months rent up front to give yourself some peace of mind.

Be Respectful

You don’t have to like your tenants, you don’t have to be chummy with them or condone of their decoration choices, you do however have to be respectful. Many landlords see their tenants as though they are some kind of problem, this is not the case and as mentioned before, these are your clients. In order to have the best possible relationship with your tenants, ensure that you give them the respect that they deserve.

Be Ready

As a landlord you are going to need the help of several professional services and it is important that you are ready with contact details when the time comes. An emergency plumber, a heating engineer, steam cleaners or indeed, a letting agent are all numbers that will come in handy and you should try to strike up a bond with them so that they can come to your need when it’s required. You may also need to find out how to protect a vacant property for times when you don’t have a tenant.

 

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