Eight key steps in acquiring commercial property: Chris Lang

For some investors, the question is: "Where do I start?" And that's a reasonable question when buying commercial property is not your mainstream activity.

So, let's quickly dissect the process.

1. Shortlisting your Possibilities
   
   This involves both market research, as well as matching up your investment objectives. And to help you I've put together a free app, which walks you through how to do this in a flash.
   
   
2. The Final Judgement
   
   This is where you take the 18 components behind a thorough financial analysis, and distil them down into a single figure — being the internal rate of return. This then enables you to quickly compare your opportunities, on an after-tax basis.
   
   
3. Ensure you don't Overpay
   
   Unlike with residential, commercial property doesn't always value up at what you pay for it. Therefore, you need a mechanism in place to provide you with the correct figure before you commit to purchase.
   
   
4. Negotiating the Best Deal
   
   Once again, this can prove difficult for most people — particularly, when you're not purchasing property every day. So, here's something that will help you become a master negotiator.
   
   
5. Validating your Purchase
   
   You may think you've just bought a really great property. But you should still reserve the right to confirm that — particularly, for properties worth around $1 million or more.
   
   
6. Locking in your Loan Terms
   
   Many investors tremble at the thought of applying for finance. That's purely because they haven't discovered one simple trick — how to take control of the valuation. That way, you can turn the tables; and have the lenders competing for your business.
   
   
7. Setting up your Tax Benefits
   
   Depreciation is a very handy non-cash deduction, to help in reducing your taxable income. Therefore, knowing how to maximise your claims each year is vital.
   
   
8. Adding Value
   
   Once settlement has taken place, you now need to start implementing the plans you devised — when carrying out your earlier analysis for that property. This is where you beginning to generate your super growth.

Bottom line: None of this is overly complicated; in fact, it's really just common sense.