It’s a saying that’s so often repeated, it has lost most of its meaning.
But it exists for a reason, and there are many considerations related to location that need to be taken into account when evaluating a potential commercial real estate investment.
With each style of investment – whether it’s retail, office or industrial – there’s seven key points you’ll want to consider before buying:
1. Is it visible? 2. Does it have good traffic flow?
3. Does it have good access?
4. Does it have good light?
5. Does it have any limitations to modify? 6. Are there any environmental concerns?
7. Are there any surrounding infrastructure concerns?
For example, buying a café on the wrong side of the street that doesn’t get the sun, can be a detriment if you are trying to find a tenant.
Or buying an industrial property that’s hidden down the back of a cul-de-sac that no one can find, could make it hard to get a tenant if you had a vacancy.
Likewise, buying an office in a building where you have to go up in a lift and walk down a corridor and then it is behind the toilets – as compared with buying an office in a building where you open the lift doors and there it is.
Location choice is often common sense, so don’t overthink it… but don’t neglect it either. It can make or break your investment, and your profits.
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In my experience, there’s nothing better than visiting the location you’re thinking about buying in, particularly if it’s not in your home town.
But, when you’re starting to look at commercial property, the first location you should focus on is within 25km radius of where you live.
This means you should be looking at the properties that you use or are close to every day – the properties around the café, the chemist, the paper shop, the hairdresser, the restaurants, the offices.
People almost always forget to do this, and they often have blinkers on when it comes to great property that’s right in their own backyard.
That being said, if your local area is saturated with a certain property type, it’s advisable to broaden your search, as an oversupply of similar properties will make it difficult for you to secure a reliable tenant on a long-term lease.
Location is not only important for the operating success of your property – it also comes into play when you have to sell your investment.
And remember, a lucrative location today, might turn to be an unwanted destination tomorrow. You cannot predict the future, but with correct due diligence, you can certainly minimise your risk.
To Your Success
PS. Remember to check out how savvy property investor James retired over 15 years ago to live the ultimate Byron Bay beach lifestyle on massive passive income… and importantly, how you can too! Check It Out Here