When people talk about buying a fixer-upper, renovating it and then renting it or selling it at a profit, they are usually talking about rental properties. This tends to be because the rental market is a place that most property speculators are familiar with, and because it is often possible to live in the house while doing the renovations – which means that you are able to save on rental or other living costs that might be incurred if you had to live elsewhere. But the truth is, it doesn’t just have to be residential where this model works, there is plenty of scopes to make a go of it in the commercial or industrial spaces as well. In fact, if that is something that you are considering, here are a few things you might want to consider.
Do it slowly
The nice thing about buying a commercial property and fixing it up is that you don’t have to tackle it all at the same time. You can do it floor by floor or unit by unit. The point is that while one part of the building stands empty for renovation, the rest of the property can still be generating you a tidy rental income. If you don’t want to do the work yourself then in terms of commercial fit out companies Brisbane has plenty who will be able to perform the job for you. Find the right one, spell out your dream or vision and let them get to work.
Once one unit is completed you can rent it out for more and then move on to the next space. Like a chain reaction, once it is all complete you will be earning significantly higher rentals or, alternatively, you will be able to sell the property for more than it has cost you.
Do your research
Just because it is commercial property doesn’t mean that it is going to be easy to rent or repair. You need to have a good knowledge of the area you are buying in and of the overall state of the market. Ideally speaking you should be looking to buy the shabbiest property in the best area. That means that once you have done your renovations and repairs that you will be the proud owner of a great property in a great area.
Is it tenanted
Long-term property rentals are the watch-word with commercial rentals and if you can find a place to purchase that comes with long term leases signed and agreed, then you are already winning. In doing this due diligence look at the term of the lease, the escalation clauses, the credit record of the tenant and the nature of the tenant’s business. In asking about the credit record you might want to go so far as to ask for proof that the rent has actually been paid. Far too often an owner will sell his property siting a host of good things, but the truth is that the tenants have been defaulting on the rent. If you are relying on this income to pay your mortgage, then you are going to be in trouble.