In order to satisfy your Investment Objectives you will need to set certain Buying Criteria - against which you will rate each and every investment you undertake.Again, these Criteria are ranked in what has (over
years) become accepted as being their relative importance, for making a sound property investment.
1. Tenant Calibre & Lease Term
By themselves, these two Criteria could prove to be
two most important to you - if you intend to achieve any of your investment objectives.
Ideally, what you'll look for is a strong corporate (or government) tenant - with a minimum of a 5-year lease term. With that in place, you're well on your way to making a successful investment.
2. Recent Construction & Flexible Design
Generally, whenever a property has been recently constructed, it means it will have ongoing appeal to subsequent tenants. And again, this will help to ensure that many of your objectives are met.
And it also means you'll start to enjoy significant Tax Benefits.
Likewise, a Flexible Design means that you are not left with an inefficient floor layout, if your principal tenant were to vacate at
end of lease term.
In other words, you'll have an easily adaptable layout - which will allow you to draw from a wide market, when re-letting is required. At that point, you can enjoy further Tax Benefits - from depreciating any of
refurbishment works that may be required.
3. Lease Structure & Absence of Competition
Lease Structure relates to things like ...
frequency and method of your rent reviews, who pays
operating costs, and to what degree a tenant is responsible for total building maintenance ... all of which will impact upon many of your objectives.
Absence of Competition relates to how many similar properties there are, nearby to yours. This determines whether
market could become over-saturated - which may affect your return from
property, or make it difficult when it comes to re-letting.
4. Good Position & Emerging Trends
All other things being equal ...
better
Position,
better your property will perform. But, as you've seen from
earlier criteria, Position alone should not be your sole determinant.
In recent eBulletins, you've already analysed some of
investment opportunities emerging through demographic trends. But equally, new trends are emerging in relation to construction, design, energy conservation, security, lift technology, automation and so on.
All of which can dramatically improve
performance of any properties you may already own; plus enhance under-performing properties you may be looking to acquire or develop.