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Why it pays to invest with a commercial property investor

12 March, 2018
Categories: Commercial, Investments

New investors are flooding into the commercial property space.

It’s not hard to see why. Stocks and bonds aren’t yielding the kinds of returns they used to and residential property, at least on the Eastern seaboard of Australia, is arguably over-inflated so returns and growth are presumed to be low for years to come.

By comparison, commercial property offers steady yields, at higher rates, and an overall security underpinned by great tenant covenants. And if you’re thinking about adding commercial property to your portfolio, it pays to consider investing alongside those who know what they’re doing. Not only will this save you getting burnt but there is plenty upside along the way.

Here are six reasons why it pays to invest with a commercial property syndicator:

1. Better Investment Opportunities

A reputable commercial property investor will have excellent established links to the commercial real estate world including agents, valuers, financiers, tenants etc.

They’ll be among the first to find out when premium properties are coming to the market. In fact, the best properties are often never advertised at all so you have to be ‘in the know’ to see them, let alone have a chance to acquire them. This is why many wholesale investors turn to property syndicates.

2. Experience is Invaluable

Investing through a syndicate, or unlisted property trust, gives you access to sophisticated, specialist skills and knowledge. Not only do professional investors know what makes an outstanding investment with secure, high yielding results, but they also know how to avoid common mistakes and pitfalls.

Syndicate managers understand the acquisition, capital raising and valuation process which means they know how to extract the best possible outcome from every potential acquisition.

3. Improved Financing Options

Professional commercial property investors often have access to better financing options than individual or novice investors. They have long and established relationships with lenders which affords them better finance terms.

On top of this, the turnaround time is second to none and swift, considered decisions are essential when competing for premium properties.

4. Lower Overheads

A commercial property investor has established relationships with mortgage brokers, accountants, lawyers, valuers, builders, sales agents, leasing agents, bankers etc. The working relationship with these service professionals translate directly into tangible cost savings for the investor as they charge far lower fees to their bigger clients than to one-off investors.

Administrative costs eat away at profitability and lower costs means more money in your pocket, particularly if your syndicator doesn’t charge additional fees on-top. For a syndicator who takes part in the asset with you and charges no ongoing fees for the life of the asset, reach out to Properties & Pathways.

5. “Set and Forget”

Many clients consider commercial property a fairly “relaxing” form of investment because the asset can be structured with long leases, solid escalations and high yields. Although this is true, it’s no accident. It takes strategy, consideration, poise and outstanding relationships to secure such terms.

Furthermore, the syndicator takes care of the day-to-day running of the property, from niggling maintenance issues all the way through to massive value-add projects and lease negotiations.

All this means you don’t have to lift a finger once you’ve set your money in motion – simply sit back while the money trickles in.

6. Diversify Your Portfolio

Investing in commercial property through an established syndicate typically means you can spread the distribution of your capital to diversify the portfolio of properties in which you invest. This has the advantage of minimising the inherent risk associated with any type of investment because your capital is spread across multiple tenants, locations, industry and demographics.

If you’d like to invest alongside a reputable commercial property investor, contact Properties & Pathways.

 

 

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