It doesn’t make headlines.
There are no shock- horror stories.
Many investors shy away from commercial property because it’s “too complicated”
The truth is that it is not complicated, it just has different rules as compared to residential. A few weeks or months of study can open a whole new world of investment opportunities. Look about you. Look hard. Open your eyes. In every direction there are shops, factories, buildings of all sorts. Somebody owns them . People just like you indeed. Men, women, small and large syndicates. partners, trusts you name it, In the end they are all just people like you or me .
Ask the people who invested on the unraveling scandal with the Wellington based Ross Managed Funds where it is alleged that some $400M has gone missing. I bet those investors will be kicking themselves right now that they didn’t invest in commercial property.
As a watcher, investor and in particular as an advisor and mentor to the good folk who want to learn all about commercial property. over the decades I have seen rents, profits and capital growth soar to levels I never thought possible. Yet there is hardly a peep out of the media. Instead the news is full of stories about massive profits that some lucky people make selling their homes, while forgetting that Billions have been lost in the leaky home fiasco, and the dodgy get-rich -quick schemes that have ( and still do) infest the residential market. Alternatively the media bang on about the poor first home buyer being locked out of the market. That has always been the case. These “poor first home buyers” need to lower their sights and buy one of the thousands of cheaper homes that aren’t quite in Central Auckland.
Commercial property goes unnoticed, piling up massive profits for their sensible owners without the slightest inconvenience from nosy reporters or pesky politicians. No Tenancy Tribunals, no Bond Centres. no Tenancy Act, just freedom to act in the best interests of the investor- and of course the tenant as well.
Commercial property investors are much like farmers.
If they look after their cattle ( tenants), make sure they are kept warm and comfortable, give them a kind pat or two once in a while, then the milk will flow freely. If not, it’s to the meat works for them . What could be simpler.?
Investors switch to real estate
The market for Auckland investment properties priced under $2 million is booming, as investors divert money from managed funds into assets they can control directly.
Charles Cooper, the managing director of Colliers Auckland, said the sub-$2m commercial investment market was the company’s most active sector and Colliers was selling almost one a day – between 300 and 350 of them a year.
Colliers classified the commercial investment market as any property other than industrial or residential.
As such, it covered a wide range from offices, showrooms and shops to mixed-use properties, and could include anything from bowling alleys to former movie theatres.
He said there had been a lot of talk that the market was being driven mainly by Asian buyers, but that was not correct.
There was a wide range of buyers and they tended to have two main characteristics in common, he said.
Most had what Cooper termed “genuine cash” and so were not borrowing large amounts to make their purchases, and they had lost confidence in other types of investments such as managed funds. They were looking for investments they could control themselves.