Selling your commercial property
There are many reasons why you may be considering selling your commercial property investment. Maybe you want to cash up and retire or reinvest, maybe it is no longer realising its earning potential or maybe you’ve a change in circumstances.
Whatever your motivation, your reasons for selling will be dictated by your property exit strategy, which should in turn reflect your investment goals.
So, if the time is up on your commercial property investment, here’s what you need to consider.
Research the market
This is important so you have realistic expectations of what your property is worth, who your potential buyers are and how long the process could take. Get online and check out neighbouring properties for sale and also for lease, that way you can provide a realistic estimate of rental income to potential investors as well.
Typically, commercial properties can take longer to sell than residential properties, but there are things you can do to speed up the process: prepare your property well, choose your agent carefully and market your property strategically.
Prepare your commercial property for sale
Try to take an objective view of your property. How does it look to potential buyers? Consider the interior as well as the exterior. Anything you can do to tidy up your property and make it look good will make it more appealing to prospective buyers. Now, consider how it functions. Is everything working as it should? How are your digital connections and have you overlooked any maintenance issues? Now is the time to address them.
You will also need to prepare the paperwork for prospective buyers. You will need an Information Memorandum, which your real estate agent can assist with. This includes a detailed description of the property, including location, tenancy details, zoning, resource consents, etc.
Read the fine print and keep people informed
If you have tenants, you’ll need to check the details of the lease. Good tenants add huge value to your property, so it pays to keep them onside. Be open and honest and keep them informed along the way.
The same goes for your bank. Check the details of your mortgage and communicate with your lender so there are no nasty surprises for either side.
Advertising your property
If you are engaging a commercial property agent to sell your property on your behalf, choose wisely. Ask them how they will market your property because this is arguably the biggest influencing factor in terms of how quickly you sell and for how much. You’ll need to figure out who your potential buyers are and reach out to them in a targeted way. Also, consider what media would be best – digital, print or online, or all three?
Over 90 percent of New Zealander’s use the Internet for searching, so an online presence is critical when it comes to advertising your property. Here’s how to advertise on www.nzcommercial.co.nz.
Finally, be patient. A rushed sale won’t yield the best result.