December 6, 2017 - Peak Equities
Category : Blog
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Understanding Commercial Real Estate Property TypesJune 15, 2018 - Peak Equities
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Peak Equities – 2018 Investment StrategyJanuary 15, 2018 - Peak Equities
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Peak Equities – 2017 Year In ReviewJanuary 8, 2018 - Peak Equities
Benefits of Investing in Commercial Real Estate 2019November 30, 2017 - Peak Equities
Highlights of a Peak Commercial Property SyndicateJuly 5, 2016 - Peak Equities
Commercial property investment in Australia offers higher income than many asset classes along with excellent prospects for capital growth. Whilst higher income is generally associated with increased risk, this risk can be mitigated and your prospects of success increased by undertaking detailed research, and choosing the right asset, investment structure and professional advisors. Here is a basic guide to getting started.
Define your investment profile and expectations: Depending on your stage of life, income requirements, living expenses, financial goals and current portfolio balance, the kind of commercial property investment that best suits your needs will vary. A licensed financial planner is best placed to help define your requirements and strike the right balance of income, growth prospects, time horizon and risk.
Always seek independent financial advice: A suitably qualified accountant or investment advisor is an important resource.
Avoid B or C grade assets: There are risks associated with all investments and particularly with commercial real estate investing in less than premium assets. The value of B & C grade assets can be more volatile and sensitive to vacancies, harder to fill with new tenants and can also require significant capital expenditure, repairs or maintenance. While the investment yield offered with B & C grade assets can be particularly attractive, the risks to both income and capital are considerable, and accordingly, investing in assets of this kind is not recommended for anyone but the most experienced commercial real estate investors.
Undertake a thorough due diligence investigation, with the assistance of experts in each field of enquiry. This should include the following elements:
Diversify: Diversification is a critical element to minimising risk and. Your investment decisions should be made within the context of your existing investments and investment profile. Balancing a portfolio includes consideration of your exposure to each major asset class as well as the spread of investments within each class.
Choose your fund manager wisely: If you lack the resources or expertise to undertake the above pre-acquisition activities, you should consider investing through participation in a Managed Fund / Property Syndicate. In that case, the most important decision to make is choosing the right fund manager. It is recommended to make inquiries with at least 3 reputable fund managers and to assess their track record, performance history, investor feedback and reviews as well as quality and regularity of reporting and communication.
September 19, 2019