Building a profitable property portfolio

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Any investment advisor, or any investor for that matter, worthy of survival in this day and age knows the golden rule of investment: diversification. While stock markets hold sway amongst the venturesome, even they put a little (or a lot) aside for investment in commercial property. By nature, buffered against market volatility and inflation, it provides good returns on investment, even in the toughest of economic times.

Here are a few tips on how you can leverage your capital and build a secure commercial property portfolio:

Make some friends – Commission-hungry real estate agents can sometimes lead gullible clients down a path they would not have gone had they known better. Besides having your wits with you at all times, it works well in the long run to have a broker you can trust for advice on both properties that suit your interests and mortgage solutions with favorable terms.

Visualize the potential – While many investors may look at a certain property for what it is, with a little insight, you can see it for its potential. A seemingly dead property can, for a variety of reasons, bloom into its full unrealized potential; it is up to you to see which property may or may not.

The winning formula – Cliché it may be, buying cheap and selling expensive is a road well-travelled, and for a good reason. This ties back to the previous two points: having a broker you can trust and seeing a property for its potential. Also, buying when the market heads south can yield good returns when markets stabilize.

Be wary of tenanted properties - While it may seem like a good idea to buy a property that has existing tenants for the cash flow it promises, doing so without studying the tenancy contract and consulting the lawyers can lead to unwanted surprises. Commit with prudence.

Handy Hints
Commercial properties are less prone to the effects of inflation
• Hire a trusted property broker and mortgage advisor for advice
• Prudence is vital when purchasing tenanted commercial units

Source: Bushra Hameduddin, Special to Properties
The writer is a freelancer


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