We interviewed Adrian Un, our expert trainer for Sarjana Hartanah Commercial, on the top 5 mistakes that newbie always make when getting started in Commercial Property Investment:
1. NOT DOING ENOUGH RESEARCH
– In their eagerness and greediness, they didn’t perform enough due diligence before buying the commercial properties.
– They tend to treat commercial property investment like gambling, which will cost them lots of money later.
2. CHEAP DOES NOT MEAN GOOD
– Because its cheap, they buy. Just because its cheap.
– Cheap does not mean it’s good. There’s a reason why its cheap.
– Be very very careful if they are selling too much lower than the market price.
3. BIG BROTHER SHOP AND SMALL BROTHER SHOP
– They buy into neighborhood shop, not knowing that the population in the neighborhood shop is not able to sustain the sales
– When there is not enough sales to cover the rental cost, the tenant have no option but to close down their shops.
– Be careful with this type of shops. You don’t want your shop to be vacant without tenant for long period.
4. THEY BOUGHT RETAIL LOTS THAT WERE SOLD TO INDIVIDUAL BUYERS
– They buy into retail lots, which are being sold individually to buyers.
– The danger is there is no tenant control mix.
– If the developer doesn’t control the tenant, this is dangerous because the landlord can bring you low quality tenant, that will make the whole retail area not so vibrant. Negative vibes.
– Tenant mix is a very dangerous thing. If developer don’t have control, there is a high risk that the whole development will not be successful.
5. THEY BOUGHT FROM THE WRONG DEVELOPER
– They bought from the wrong developer
– The SPA is not standard. The risk is, if you read the SPA, the will bill you upon commencement of work.
– So, small time developer can run away with your money.
– The law in residential under HDA is tighter. However, the law in commercial is not that tight, opening areas for unscrupulous developer to take advantage of this.
– To make matters worse, sometimes the banker just release/disburse the money to developer without actually inspecting the site.
We hope you have learned something from this article, and try to avoid doing these mistakes in your Commercial Properties Investment Journey.
P/S: If you want to learn how to make millions in profit and invest in Commercial Property the right way, come and join us in Sarjana Hartanah Commercial by clicking on this link: http://faizulridzuan.com/sarjana-hartanah