Buying Investment Property?
Some research data published recently by Property Council of Australia indicated that the most significant current activity in the commercial/ retail and industrial sector of property sales was in the $2 to $5 million price range.
Activity in this sector was being driven by self-managed superannuation funds and consortia of individuals.
Do you know what Town Planning Approvals apply?
This investment sector is generally not resourced with experienced property lawyers and consultants and a recent enquiry we received highlighted the traps that this can cause.
A client with an industrial property that had been vacant for some time took on a new tenant on a 3 year lease. Not long afterwards they received a town planning breach notice from the local Council that may mean them having to close and the owner losing a key tenant thus rendering his investment significantly compromised.
This is an all-too-frequent occurrence when it comes to buying investment property.
A similar situation can arise with someone purchasing a property with existing tenants without realising that the existing tenant may not be operating lawfully under the relevant town planning scheme.
What information should I look for when buying investment property?
It is always important that the correct searches are undertaken to ensure that approvals are in place for the activities being undertaken or proposed for the property.
It is imperative that investors request that their lawyers get the correct level of search to be satisfied that existing uses are lawfully established. At the least, this should provide copies of town planning approvals and the conditions related to those approvals.
If compliance is critical to the investment, it may be necessary to have a compliance check to ensure that conditions of approval have been complied with.
If there is any doubt, they should engage their preferred town planning consultant to check the certificate and the town planning scheme to safeguard their investments.
If the investor does not have their own town planning advisors, our staff can provide that advice for properties located in Queensland or northern New South Wales, the area in which we operate.
Noel Grummitt has more than 35 years’ experience in the development industry and is qualified in civil engineering and town planning. He is principal of Grummitt Planning, a town planning consultancy on the Gold Coast and Ipswich. The company has provided town planning advice to the full range of property investors and developers and represent many organisations in the charitable sector locally and overseas through Buy1Give1. He can be contacted at http://www.grummittplanning.com.au
Related Topic for the reader: Questions to Ask Before Buying An Investment Property