Commercial developers aren’t able to complete projects or begin new ones until the economy turns around and investors start regaining confidence in the market.
So if you’re a commercial investor, how do you know when it’s the right time to purchase?
Market forecasts can be relied upon to a certain extent and turnarounds can seem to happen virtually overnight. But when you’re investing thousands or millions of dollars in a commercial venture, you want to make sure that you will get some return.
Real estate agents can help you analyze the market and consult with you on investments, but there are a few things you can look at to determine if now is the right time to buy.
Look at the Employment Rates
Employment rates can tell a lot about the economy. Many commercial properties in Australia rely on consumers to bring the revenue into the black.
If employment levels are low, that means that consumers aren’t patronizing businesses and companies are having to lay off workers. If you invest in a large commercial building meant to hold retail stores or service businesses, you want to make sure that those empty storefronts will be filled.
In order for business owners to lease out your commercial space, they need to be reassured that their business will succeed in your building. If customers are holding onto their money and businesses aren’t able to sell, then there’s a chance your storefronts will remain empty.
When the employment rate picks back up, it usually means that the economy is turning around and business owners will become confident in their ability to turn a profit.
That is when they will start looking for places to lease, and is a prime indicator that it’s potentially a good time to buy.
Watch Comparable Market Values
Another sign that it’s a good time to buy is when commercial properties in Australia start selling at competitive market values.
Your real estate agent can tell you if commercial real estate is selling at, below, or above market value. When the market is selling at or above value it’s usually because business is good.
Although you can get a deal buying at below market value, there’s less reassurance that you’ll get an even return on your investment in the future.
Before purchasing any When the Australian economy hits a setback it is generally the Tips for Shopping the Australian Commercial Real Estate Market that will help you out. make sure you discuss with your agent or broker the pros and cons of buying in the current market.
Real Estate Colum copy write @2010