Property Investment
from single units to larger property developments
Residential is not the only way to go. Small businesses are always on the lookout for premises and it is common practice to lease rather than buy. In the larger established light-industrial areas rents are likely to be high and many small concerns will be looking elsewhere. An astute investor with starting capital and access to a reasonable loan can benefit from this situation. Occasionally, factory units for sale can be found in streets off the main highways and these are ideal for repair shops and small manufacturing companies. Needless to say, the area and local authorities will dictate the kind of business that can be conducted; but provided this is not too restrictive, there should be plenty of interest from prospective lessees. It is, of course, possible that the opposite may be true and no-one will want to set up there. This is a risk that can be avoided with prior research into the district's current status and previous track-record; plus the recent history of any property being considered. If clients keep moving in and out too frequently, you would have to wonder why.
It is also essential to think laterally. What I mean by that is to consider the potential of the intended purchase outside of its present or past usage. As an example, my brother-in-law purchased a block of units that were originally squash courts. He used two of these himself for a print shop and an automobile gas-conversion workshop; the rest - three I believe - he rented out. It seemed a good idea, and was for a while; but he eventually had to sell, learning in hindsight two hard and important lessons from his venture: if you don't intend to manage a business yourself, put someone in charge who is trustworthy and financially experienced; and never, never let your tenants fall behind with their rent. This kind of investment is similar to the share market in that you can't set it up, then walk away and hope it looks after itself. One last piece of advice: before signing up to purchase, be very sure that the property will continue to be desirable to buyers, should you have to sell later.
A popular hobby these days is the acquisition of very old buildings, especially those which would be heritage-listed if they weren't so dilapidated. People buy these for a number of reasons, very often personal ranging from the lifelong dream to own such a place, to the love-at-first-sight scenario. Restoration of these abodes of yesteryear is likely to be expensive and time-consuming, particularly when trying to return them to their original designs and authenticity. The passionate don't care; a business investor intending to sell once the work is completed has to. These properties are much like any antiques - they are only worth what someone is prepared to pay for them in the current market; and if that is below the total of costs to date, the outcome is obvious.
There certainly is money in bricks and mortar; also in colour-bond steel, aluminium and even mud. Any building with an expected lifespan of 50-60 years should turn an investment profit eventually. The thing is to research before buying, and not to get swept away with initial success. Treat each new prospect with the same caution that was applied to the first; don't try to go too far too fast; and keep your own finger on the button. You may not become a property tycoon that way; but it won't hurt as much if you do fall.
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