What To Look For When Investing

We invited Phil Grant of NAI Harcourts Pinnacle to talk about investing in commercial property.

Here’s what he said about

what to look for when investing

Good Location, Quality Tenant/s, Easily Relettable, Downturn Proof

Some of the major things that really need to be taken into consideration when you’re looking at commercial investments are the fundamentals. What are the fundamentals of a good investment?-

That’s got to be a good location.
If it is a tenanted investment already, make sure that you’ve done some research on the tenant.
Are they good-quality tenants?
Are they a local mom-and-dad business?
Are they a national?
Are they international?
Is the building you’re buying easily relettable?

Let’s say that it’s already got the tenant and you go, “that’s a really good return.”

How about if the tenant does move out?

Is it something that has been specifically designed for that tenant and going to be very hard to relet?
Or is it something that’s fairly generic and you can relet it really easy?
Is the business that’s in that investment property downturn proof?

I’d use that as a generalized term. But if the business world goes terribly, like we’ve had a tough run for the last couple of years, depending on which industry you’re in. Is it a business that will survive that? And if it is, that could be a consideration for you to look at.

I briefly mentioned that you’ve got different sectors. You’ve got industrial, you’ve got commercial and retail.

Retail

The retail sector in the last couple of years has been absolutely smashed.

Commercial

In the commercial sector, if we look at offices they have had to sort of evolving. Are they working from home? Are they working from the office? Are they working from both and switching?

Industrial

In industrial property, out of the three, the one that’s actually been what I would consider downturn proof at the moment. In some instances, it is where people are now basically dealing with third parties. The product will come in, the product will go out, or services will come in and out. It’s the one that’s seen probably the most change and growth in the last couple of years than the other two. But those are some of the things you got to look at.

Undervalued property

Property that requires repositioning

If it’s too good to be true, it probably is!

- Check leases very carefully, check flood maps, and Research tenants, and Leasebacks.

As accountants, we’ve helped Physio clinic owners get a handle on the key numbers in their business. But, also going back to the core of what we do which is solving all the tax problems that pop up. We make sure that your service trust is being used appropriately.

We’ve also helped a lot of Physio clinic owners buy their physical space. We can incorporate that in their self-managed super fund, or we could do it under a structure outside of super. There are some different ways to do that.

We ensure you are paying the right amount of tax and not a cent more. Physio clinic owners, done well can be a highly profitable business. We guarantee that you’re not paying the extra tax that you need to.

If you’re keen to explore changing accountants, we have a non-obligation process to do that. The first step is booking a strategy call with one of our accounting team. It’s a free 20-minute zoom or phone call where you get to meet us to manage your questions.

From that point, you can consider doing a “Look Under The Hood” with us. There is no obligation to change accountants, but we give you a second opinion if you’re paying too much tax.

Throughout that process, we can identify any problems we see with your current setup. Anything that your current accountant hasn’t claimed, or tax you may have overpaid, and strategies of how we might fix that going forward. We can run through with you once you book with us.