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Specialists in commercial property valuation play an important role in the purchase and financing of investment property. The most common form of property investment in Sydney is in the residential property market, but an increasing amount of interest is directed towards the commercial property sector.
Commercial property typically returns a higher yield per investment dollar, but the importance of quality valuation of commercial property cannot be understated. Competition among lenders for non-residential property investment loans appears to have intensified, . With Reserve Bank interest rates at all time lows of 1.5% as of September 2016, shrewd investors are seizing the opportunity to enter the market with attractive lending rates for property acquisitions.
Investor yields for commercial property tend to be between 4% up to 10% net yield, depending on the risk and asset classification, but the benefits over residential property include the longer lease periods (3-10 year leases) with rental terms including annual fixed or CPI increases. To get a clear picture of the yield potential of the investment, a qualified professional report backed by historical pricing data will inform your investment decision. A valuers report will help you to negotiate the lowest borrowing terms from your bank and help you calculate the most accurate market value of your existing property. For commercial property, read more about valuations, rental reviews and determinations.
A residential property valuer may not have the knowledge or experience to report about commercial property. The best advice is to seek your commercial property valuations from the dedicated specialists at Independent Property Valuations. As an investor that is seeking financing to purchase, you need a clear and authoritative valuation report by a specialist in commercial property valuation. Read more about the various methods for commercial property valuation.
Unlike residential property, commercial property valuation is distinguished by additional factors that will affect yields on your investment such as zoning, transferable business assets, access to complimentary business, easements, foot traffic for retail business and the profile of existing tenancies. Your reports will need to be based on real-world data and judgements only an experienced valuer can make about the viability of commerce on your site of interest.
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Qualified valuers rely on the historical leasing value of the retail businesses in the area and at the earning potential of businesses operating in the property. You need to gain an untainted assessment of the viability of businesses best suited to the property you are buying. Local zoning laws and pending developments in the area can greatly influence the earning potential of retail sites.
Is the office setup in an area suited to the types of businesses, including parking, access to complimentary businesses and transport for workers. Infrastructure such as phone systems, internet access, onsite generators and environmental control systems such as air-conditioning will impact on the types of businesses interested in the property.
Zoning laws determine the types of tenant businesses that can setup on properties, also the location of the site, proximity to the city and public transport and access roads will influence the valuation for the property.
Net yield on the property will be influenced by management fees, maintenance costs and the attractiveness of the area to residential tenants. Proximity to public transport, shops, cafes are externalities that will be highly influential in attracting tenants to the building, as will vehicular access and parking spaces.
Impartiality can be hard to find in the real estate industry, but at Independent Property Valuations we guarantee it. We are not real estate agents with a vested interest in any particular outcome; we simply provide clear and accurate information that you can rely upon to make sound investment decisions.