Property problems: Commercial investment needs careful work
Q: After all the publicity about residential property I have decided to look at putting some surplus funds into commercial property. I understand that the returns can be greater, but so are the risks. What should I do to minimise them?
Monday, December 5th 2005, 6:46AM
by The Landlord
A: The first consideration for anyone looking to enter into a property transaction is to "see a property lawyer first". An experienced property lawyer will have the necessary expertise to guide you through the legal aspects of the transaction from before you sign the contract, and up to and after settlement of your purchase. Quality legal advice at an early stage will help to identify potential problems with the property. It is essential that you undertake a robust "due diligence" investigation of commercial property.This means checking all aspects of it to establish the "truth" or otherwise of what the vendor has said and whether it is suitable as an investment.
The old common law phrase of caveat emptor (let the buyer beware) applies. It is quite simply a matter of managing the risk. The primary purpose of due diligence is to identify matters that may adversely affect the value of the property.
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