Forum Replies Created
- TiffanyG wrote:Hi,
So a person I know who is currently overseas bought an “investment” commercial property from a company called ozzieoppertunities 4 years ago in Brisbane on the Airport Road in the Gateway Business Centre… the people who sold the property have been acting as agents and haven’t been able to lease the property for the last 4 years, they say its a “slow market” and that there’s no point in trying to sell it as well as the market is so slow in brisbane, anyway they keep charging for “advertising” and the most recent bill was for 1000AUD to advertise the property.
Any advice on how to proceed with this situation??
Most people are lazy. Ergo, most agents are lazy as well. Maybe lazy isn’t the right word but they typically lack innovation. Most of them will list the property on the listing service, put a sign, wait for the phone to ring and call it a day. We actually took on a commercial property with a similar situation. Your agent shouldn’t just be putting up signs and waiting for the phone to ring.
We leased our own property by finding nearby businesses who weren’t on a lease and were paying above market rates (yes our market is TERRIBLE… worst in the country and some people were still paying more than they should have been). We simply offered them a better price to move. We spruced up the building so it was nicer than their current property and it was already a great location.
Those are the best properties to buy. Management problems (which I group an agent just saying it’s “slow” as) are the easiest problems to solve. I mean some of these guys don’t even advertise on free online classified sites like craigslist. That’s job one!
It amazes me that they kept renewing contracts for something that costs them nothing and has proven not to work. However, another 4 months isn’t the worst idea in the world, since they’ll probably work hard for new business again. Oh well… you should find a way to buy that conditionally, fix the problem, and resale to an investor as a “cash flow property”. Seriously, if you advertise it every day on craigslist, you’ll probably have a tenant in 30 days for no cost. If it doesn’t work, get more active and propose it directly to nearby business owners.
You can be proactive with your investment even if an agent won’t be.
Good luck!
It varies so much from area to area that it’s almost hard to give a straight answer. We do most of our stuff here in Canada but a little in Australia as well. In my hometown, you almost can’t get a tenant to sign a lease because the businesses are struggling so bad and there is so much vacant property. In Toronto, they won’t bat an eye if you ask them to stay 5 years and they will likely stay the whole time. It’s really just a matter of demand. You’ll want to see what some of the averages are for the area you’re investing in.
What are you specifically concerned about with your acquisition? There are always ways to ensure you are protected.
For a rental, I’d only put in lino. It’s the most cost effective solution, looks nice and also as a side benefit is appreciated by people with allergies.
Although even better than that, screen your tenants harder next time. You don’t want losers in your property that don’t treat it like their own.
I’d never pay in cash if you don’t have to. Donald Trump says you’re “being lazy” if you use your own capital. At the very least, see if you can get a line of credit or something. Just don’t over-leverage the property.
