How Do you Select Best industrial property and commercial business Buildings for sale in Pretoria East?
[tag] is a specialist field. Not all property agents know enough about the commercial property market and the property type to do it well. Sellers in Pretoria East should choose their agent with care.
The owners of investment property that want to sell their asset should carefully choose a real estate agent that is well versed in the market trends and the property type. That agent should also show a high level of current market share and success in commercial property in Pretoria East over the years.
Selling commercial property is not an ‘experiment’ or an exercise in ‘hope and pray’. When undertaken correctly in any market situation by a skilful agent, a property will attract enquiry and a sale is possible. The result then sits on the client’s ability to accept the industrial property for sale market price and market evidence. There are always buyers out there; they just have to be found and the sellers need to be accepting of the market trends.
Interesting Facts About Industrial Property and Commercial Business Buildings for Sale in Pretoria East:
Not all commercial investment properties should be auctioned, but the auction method of sale does have real advantages if the property is just right and the market is accepting of that method of sale. Here is why.
The key governing factors to determine if auction is a real chance or choice for the property owner are the current levels of enquiry for that property type, and the prevailing business sentiment. If this is the case then you can look further at auction.
The auction method of sale is a proven time based sale process that flushes out the enquiry and if the investment property ticks all the other boxes such as:
- Preferred property type in the local market.
- Good improvements on the property.
- Location factors that attract enquiry.
- Capital growth opportunities.
- Good tenant profile or anchor tenant.
- Good lease structure that supports stability of rent.
- Low vacancy factors and associated risk.
- Tenant mix that is well structured and balanced for property function and rent growth. This is really important in retail property.
- A realistic seller with a reserve price that allows for comparable property evidence and other sales history.
- A vendor funded marketing campaign that targets the right buyers and activates enquiry from them.
- Acceptable (and not excessive) levels of comparable property on the market that are competing with the subject property coming up for auction.
Do not overlook the advantages of auctioning a commercial property. Just make sure all the other existing elements are in support of that method of sale before you start.
Commercial Agents - Tips for Qualifying Industrial Property Buyers or Tenants
Industrial property is the entry point for many property investors to the commercial property industry. As a property type, industrial property is relatively straightforward with little complexity. The property owner just needs to target and strategise the following issues when looking for a property to buy:
- Stable tenants
- Achievable rentals
- Good property location
- Industrial property precinct
- Growth of the local community and business sector
- Vibrant industrial community supplying services, products, and raw materials
- Access to transport links, ports, airports, and railheads
So now let's look at the industrial property needed today by tenants.
What do Industrial Tenants Need?
Traditional warehouses will include quality height, size, loading and unloading facilities, quality office space to support industrial operations, ample car parking for staff and customers, hardstand areas for operational flexibility, and high levels of security to protect the tenant's goods and their operation.
Industrial tenants today are far more sophisticated and demanding when it comes to selecting a property to lease or buy. The investor should therefore select a property that has all the elements of property usage that tenants expect in the local market. Tenants know that the property will impact operational costs and eventually the bottom line of their business. Tenants will choose their property well as a consequence.
Taking the First Step to Investment in Industrial Property
Industrial warehouses are simple to construct and have a long economic life hence the investor sees it as an entry-level investment vehicle and popular. Providing they select a sound and strong tenant, and apply a good lease, the stable future of the property for investors is normally achievable.
There is very little management required on industrial property, and as direct result many private investors will manage industrial property themselves. Unfortunately this does have negative connotations, in that the first time investor sometimes has little awareness of the specialist terms and operational conditions that is supported by lease documentation on their property.
With industrial property it pays to recognise that the property may be uniquely and specially suited to a particular tenant. This means that the vacancy threat in industrial property must be carefully monitored as any lease reaches the end of term. It is not unusual for industrial property to remain vacant for a lengthy period in the current market.
Mortgage Lenders and Industrial Property
Mortgage lenders for fully leased warehouses occupied on the long leases see them as being good collateral for loans. Long-term financing is typically available for industrial investors at competitive interest rates. The investors of industrial probably find it easy to refinance an expanding portfolio on the back of their established industrial and well leased property.
The secret to success in industrial property investment is to have:
- Good leases
- Good tenants
- Good vacancy awareness and minimisation strategies
- Sound recovery of property operational costs
- Good maintenance controls
- Good insurance strategies
- Minimal exposure to risk from the property
- Well established permitted use and compliances
- Good income and expenditure budgets
Industrial property is the market segment that is normally suffering early in an economic downturn. That is due to the close integration between the industrial business community and the consumer. Fortunately, it is the industrial property market that responds quickly when the economy moves towards growth and stability. Landlords should respect this fact and monitor their way through the downtimes as they will always come and go.
Investment Property is cyclical and will on average move through a complete cycle every 7 to 10 years. In today's market, many investors know that real opportunity exists today at the beginning of a new property cycle. This cycle is currently evident in most countries and major cities.
Search for Commercial Real Estate Land For Sale Near Me in Pretoria East
Before we answer this question, it might be helpful to actually define each term first.
Retail and industrial are both considered 'commercial real estate' (as opposed to 'residential real estate'). Commercial real estate refers to buildings or land intended to generate profit; industrial and retail are simply sub-categories of commercial real estate.
Firstly an industrial property is defined as a property used for the actual manufacturing of something, and can be considered either a factory or plant. This is usually zoned for light, medium or heavy industry. This includes things such as warehouses, garages and distribution centers etc.
Retail property is a commercially zoned property used solely for business purposes, the actual selling of the product, rather than its manufacture - retail stores, malls, shopping centers and shops all huddling nicely under the retail umbrella.
3) Natural Light - in especially high demand nowadays
4) Location - close to other offices, public amenities, transportation etc.
Since 1980, retail property has returned an average of 9%, though is currently returning around 6%. Industrial real estate tends to be the most volatile, and is currently returning around 7% (as opposed to its peak of around 12% during the 1990's recession).
And obviously, no matter which form of commercial property you're considering, read the lease carefully. Sounds like a silly thing to say, but you'd be very surprised at the issues that can become issues simply because things weren't read properly!
How To Value Commercial Property
Though it is certainly more common, and in many cases easier, to find deals with the single family houses, there are times when the opportunity presents itself to acquire a commercial property. And if you are a person who desires to pursue this venture, there are a few things you want to keep in mind when doing this. Following these simple steps can help speed up the process of getting some of these big deals in the pick line.
First, FFN offers a Commercial Property Boot Camp. This is a must if you want to pursue this arena of the real estate business. This course will teach you all the ins and outs of going through these business transactions. See the website if you want to know when the next one will be offered.
You will also want to keep your eyes open when you're riding around town, especially for fiz-bow signs (FSBO - "for sale by owner). If you see fiz-bow signs on big tracks of vacant land or any type of property, you will certainly want to call those numbers. When you are dealing with fiz-bow in the commercial property world, there is usually a reason they are trying to sell these properties themselves. And sometimes this can lead to some really good deals.