Investing in property is something that many people enjoy doing. It is regarded by many as one of the only ways to get rich without having any real capital to start with. That is because when investing in property you are generally able to obtain substantial loans from banks, given that once the loan is secured against an appropriately priced asset – namely the building that has been purchased.
Most people investing in property go the residential route, but commercial and industrial are also options. And we are here to tell you that while residential might be the most accessible and easy to understand, that it is quite possible that industrial is where the real opportunities are. So, if you are looking to buy an industrial property, here are a few tips to help you realise value from the investment.
Ease of access
One of the most important things with industrial property is size and accessibility. Whatever it is that the building will be used for – be it production, distribution or storage, it is very important that the area is both secure and accessible. With this in mind, look to make sure that the outside doors are in good condition and that they are big enough. Adding additional entrances and exits is often a win, as long as it doesn’t impact on the structural integrity of the building. Look around for installers of industrial roller doors Melbourne has several very good providers, as do most of the other major cities in Australia. Plan wisely about the access points – think about the roads in and around the property and what will make for the easiest access to your property for large trucks.
Same rules apply
When buying residential property, you would have heard the mantra that is trotted out by estate agents: Location! Location! Location! The same applies to industrial buildings as well. Quite simply, you should be looking to buy the worst property in the best area. That way you know there is demand and that the area works. Thereafter you can improve your building. Maintain and fix it and suddenly you will have a good building in a good area. The last thing that you should be doing is buying the biggest and best building in an area – it is almost certainly over-capitalised and over-priced, and it will be hard to find the value in the investment.
Know the market
One of the primary reasons people tend to buy residential property is because they understand the market. In short, they live in residential property and may even have rented in the past. They understand the market. Industrial property can be very lucrative, but you need to have an understanding of the market, of where the needs are and of what the opportunities are before you buy. So, spend time studying the market, and if possible, identifying properties that already come tenanted. That way you know what you are getting, and you won’t have any fallow periods where you are paying the bond but not receiving any income.