Questions to ask about your commercial property management every year
Investing in Commercial property should not be “set and forget”.
Every year you should think about each property you have in your investment portfolio.
Top 3 Commercial Property Management Questions
1. What is the yield I am making on this property?
To calculate yield – take the income you have earned from the property during the year and take away the amount you have spent on the property.
Divide this amount by the original purchase price of the property. This is the yield.
Is the yield more than you would have earned from putting your money in a managed investment or into a term deposit?
2. Do I think the property value is going to increase? Or will it be stable for a while?
The growth in the amount a property is worth is the capital growth you are making on a property.
If you are not expecting the property value to increase in the next few years – would you be better off selling this property and investing your money somewhere else?
3. Can I increase the rent for this property?
If you are not able to increase the rent and keep the property tenanted – by at least the rate of CPI – your property is not increasing in value, despite what the real estate agent is telling you.
You may find that you are better served long term by selling one of your properties and re-investing your money.
*This should not be taken as financial advice and does not take into consideration your personal circumstances.