BUSINESS INTERVIEWS
OPERATIONAL TIPS
When I speak with new clients starting their investment journey in commercial property, the first thing I need to understand is how financially ready they are to invest. Understanding their available equity and how best to leverage it with the banks is critical. One practice that I see all too often is the diversification of […]
6 critical tips that are part of my routine when I analyse a property. As you can see, they have a big impact on the value of a retail property.
One of the most frequently asked questions I get from prospective shop owners is around the owner’s responsibility regarding building and public liability insurance.
There are several questions I am often asked as a long-term owner of retail shops.
When I first spoke with Phillip to understand his commercial property investment secrets, I quickly realised this was an investment strategy and asset class suited to my personal financial strategy.
In the article “Tenants that Don’t Pay”, Phillip outlined steps and approaches to manage tenants that pay late. The steps to encourage tenants to remedy their rental arrears includes a legal letter of demand and contains a warning that they have 14 days to remedy their arrears or you will lock the doors. In the very rare cases when a tenant defaults on their lease it is important to know what the landlord can do to minimise your exposure.
There are so many things to consider when purchasing a commercial property. In my blogs I highlight dozens of important questions to resolve, I talk a lot about tenants, lawyers, bankers and agents, but one silent assassin for shooting down a property is whether it is subject to flooding. As you know one of my […]
I have experienced an alarming trend recently in the way agents are under reporting the outgoings for a commercial shop for sale.
One of the most important activities you will undertake while owning and operating a commercial retail property is renewing the lease upon expiry. The key is to be prepared and to be ready to act early, preventing an extended vacancy if the tenant chooses to leave the shop.
In Engines of Wealth we dedicate an entire chapter to defining the characteristics of a great retail shop, so you can recognise them when you see it.
We are thrilled to be featured in todays edition of the St George & Sutherland Shire Leader!
One of the key reasons we selected commercial retail shops as the foundation of our wealth engine was due to the low maintenance aspect of these shops. In fact the only real major items of plant and equipment that is the responsibility of the landlord to fix is the hot water system and the air conditioner.
One of the key things I like to see when buying a retail shop is a long lease. Not only does a long lease offer you security over future rental payments it wins the banks confidence in the asset as it presents with a higher WALE (Weighted Average Lease Expiry). In Engines of Wealth we discuss the WALE of a building as a measure of the lease term left to run.
In my opinion Depreciation is the secret sauce when selecting retail shops as our wealth building engine. Our wealth building strategy is to create a long lasting income stream that is indexed to inflation and tax effective.
A guarantor must be identified on the tenant’s lease, it could be the tenant or a friend/relative. A guarantor should be a person that has suitable assets to provide security over future rental payments. The subject of a guarantor is not only an important consideration at the time of purchasing a property, it is also important when a tenant has decided to sell their business or assign the lease to another party
I can safely say that the most important task your solicitor will conduct during the shop purchase process is due diligence, that is to ensure the asset you are buying has no encumbrances, will not be impacted by caveats, zoning changes or future government acquisition.
It would be a nice world if everyone did the right thing at the right time, for retail tenants that means paying their rent on the 1st of every month, like clockwork. Unfortunately we do not live in such a perfect world and you may come across a tenant that has poor cash flow and believes it’s OK to use you as his bank and is regularly late in paying the rent.
FOR THE TIMES THEY ARE A CHANGING
BUSINESS INTERVIEWS, COMMERCIAL PROPERTY, ENGINES OF WEALTH NEWSLast week the Engines of Wealth team achieved a milestone that I believe is a sign of the changing times, we assisted Valma secure her first commercial property investment. What makes this notable is her tender age of 85 years young. This sale is not a one-off occurrence, prior to that we had helped Kathy, […]
Hairdresser Barber
BUSINESS INTERVIEWS, ENGINES OF WEALTH NEWSAs mentioned a few times in Engines of Wealth, I own seven Hairdressing salons and would gladly have more, they make dependable tenants. With that many hairdressing salons in my portfolio I am keen to learn more about their business, so I interviewed a local Hairdresser/Barber to gain greater insight and improve my investment calculations.
Real Estate Agent
BUSINESS INTERVIEWS, COMMERCIAL PROPERTY, ENGINES OF WEALTH NEWSIn Engines of Wealth I discuss at length how to interact with real estate agents from a buyer’s perspective, but when considering them as a tenant and agencies are one of my preferred tenants, there is a twist. When considering the viability of a real estate agent in your shop first you need to ascertain if they are among the 90% that sell residential properties only. Remember the catch-cry “Location, Location, Location”, all areas are not equal and if your shop’s neighbourhood is not providing attractive prices or has too much competition then a real estate agency may struggle.
Thai Massage Centre
BUSINESS INTERVIEWS, COMMERCIAL PROPERTY, ENGINES OF WEALTH NEWSI recently assisted a fellow investor acquire his first retail shop. We found an ideally priced Thai Massage centre in Maroochydore QLD that was opposite a popular beach and caravan park. The gross rent was $21,350 per annum and the outgoings were $7,220 per annum leaving a net annual rent of $14,130.