6 Ways to Work with Commercial Real Estate Property Investors

Commercial property investors have many different targets when it comes to property selection and performance.  As agents and brokers, it is critical that we come to a full understanding of any individual investor so that we can help with the property future that they require.

Some property investors know a particular property type better than others and will feel comfortable with that.  They will prefer that property type when it comes to buying and investment.  The same rule applies to a location in a town or city; some locations are easier for investors to move into and take a calculated risk based on their finance and portfolio exposure.

Let’s say you as the agent are to meet with a property investor for the first time.  You understand that they want you to help them with ongoing property matters and potentially buying, selling, and leasing.  On that basis you have some facts to explore.  Here are some ideas to help:

  1. Property preferences – get to know the type of property that they understand and prefer when it comes to any investment portfolio.  Take them for a drive to key property locations locally to see what they know and how they feel about some of those areas.
  2. Long term or short term – investment in property can be different in so many ways.  Will your client prefer to hold a property for the long or the short term?  Those facts will influence the way that think about tenant mix, lease strategies, and vacancy management.
  3. Loan value ratio – if the client has other property in their portfolio and have held such for some time, they will likely have a reasonable borrowing capability with lending institutions.  That fact will have an impact on their loan value ratio (the amount of money they can borrow from their preferred financier).
  4. Loan type – some investors will have loans of particular type that should be factored into the regular income recovery for the property.  Each month the client will want money paid into their property account in preparation for mortgage payments.  If the client has a short term loan, then special consideration will be required with interest and principal repayment at the right time.
  5. Income targets – the amount and stability of income required by the client from the property will impact the rental type (net or gross) and the availability of incentives in any new lease scenario.   Ask the right questions to get to the bottom of these facts.
  6. Lease standards – some clients prefer leases to be set to certain standards.  Those standards will impact rent reviews, options, tenant lease negotiations, and market rent choices.  In many respects the client should consult with their solicitor to establish the right terms and conditions to be used in a lease negotiation.

As property professionals we can do a lot with this information; most importantly we can find the right properties for our clients to invest in as and when needed.

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