Commercial Property Investment

Investing in commercial property has been done by many people. Some people are able to spend a large amount of money to buy commercial real estate. For most of us, investing in real estate limited to the place where we live - our home.

But unfortunately, we can not generate the revenue or cash. In fact, even our burden because we have to spend money on maintenance and pay interest on loans. Certainly financial incentives to offset it is through the rent or income you earn when you sell your home when house prices go up. Most financial advisors will tell you that the best investment strategy is to pay the mortgage as quickly as possible to reduce your debt.

But then what if you really want to invest in property? You have a choice - invest in residential property or commercial property. The property houses often provide a good income from the rent money, but you must stick to the terms of the law, lack of concern for tenants to care and maintenance costs. If you like to play as a landowner and is involved in all the activities that then that's great! But what if you want a professional tenant.

Investment is increasingly popular in almost all the small investors and retirees is through syndicate / partnership property. Known as direct property investment where small investors buy small packets of a large property with a prospectus. The project is managed and marketed by a licensed property dealers. Prospectus was kept at the Australian Securities and Investments Commission, while property and syndicate work professionally.

As of December 1999 there were 77 property syndicates operating in Australia with an investment of more than $ 1.45 billion. Nearly 60% of these investments using borrowed money, known as "gearing" (the ratio of debt to assets).

Benefits for investors investing in property syndicates is that they can be bought in packets of relatively small, for example, you can buy the cheapest starting price of $ 10,000 and get an explanation of the commercial property market. Another benefit is its correlation with the stock market that are often reversed, so investors can share the risk in their portfolios. Another benefit is the regular income provided by the property syndicate, high yield and relatively low risk.

Sample job descriptions of property syndicates are property management companies to purchase a commercial building with prices ranging from $ 10 to $ 30 million and then market it to about 300 investors, each of which has a capital investment of between $ 40,000 to $ 50,000 per share.

Simon Toovey, managing director Glenmont Properties Perth branch said that the main purpose of investing in property is to get a quality tenant, lease long-term, rapid payback, and the potential for growth. "The benefits of investing in a property syndicate is that it can improve your lifestyle by providing a regular income." Toovey gives examples of some of the more investors looking for a secure regular income than capital growth. "The most important aspect is the location, and the Management of the contract. Ideal tenant is a government department or large company. Ultimately, all of this is about money. Investment property that is supposed to be able to deliver increased revenue, revenue that will enhance your lifestyle, now and future. " Syndicate the property may not be suitable for all investors but they do provide a choice of diversification in your investment portfolio.

10 tips for property investors syndicate:

1. Create goals and plans regarding budgets for investments.
2. Understand the risks or benefits of the sale. The higher the gain, the higher the risk. Your profit target is between 8 to 10 percent.
3. Understand the risk of property syndicates. Including if the market was not profitable as an increase in interest rates, the ability of members, changes in taxes and a decrease in sales.
4. Remember, this is a long term investment, typically around 7 years. These are liquid assets which means you can not get your money during that time.
5. Identify property investment syndicate that has qualified as a good location and the potential for price increases. Ask for a copy of the report and the independent investment ratings.
6. Analysis lease arrangements. Ask how much rental income that will be generated, if there is growth and how long to hold?
7. Check the background of the tenant. Ideal tenant should be government departments or big companies.
8. Investigate the quality of management that runs in property syndicates. They should have a good track record on property settings and have a good relationship with tenants. Ask for their qualifications and how large property portfolios they handle? People who tell you about the investment also must hold a Security Dealers License, or Investment Advisors License, or Proper Authority Holder.
9. Beware of fare management and marketing of excess. Read tariffs on sheet prospectus.
10. Seek professional advice from a stockbroker or a qualified financial planner.