Scott O'Neill

Once you do that, you're going to have confidence that your mortgage is going to get covered by this income.

And that sounds so basic, but there's a fair bit in it, like checking insurance premiums.

You don't assume that the current insurance is going to be the same next year because premiums are going up.

That could hurt your return.

Maybe they've forgotten rental management as an outgoing option.

we're very outgoing sensitive with commercial we need to understand it to the decimal point which again is a very big difference to residential because residential you kind of just buy it for the growth and you know the outgoings are the outgoings the rates are the rates so these are the these are things as a commercial investor you've got to be very clear with the next one is a legal lease review

Make sure you use a commercial lawyer.

Don't go to your local residential guy if they've never done commercial leases because I've seen it many times mistakes are made and that again could be a reason you've overpaid for the property.

You must get a lawyer to look over every lease because it's like another contract.

And leases are notoriously contradictive.

So they basically, they might say 100% of the outgoings are paid by the tenant, but in reality, they may have left out land tax or building insurance or rental management.

So a lawyer will be able to protect you here.

So this is great because it means you can handball the responsibility to them and then, you know, your job is to understand the legal lease review summary.

Now, the next part, top three due diligence questions is really understanding the re-let ability.

Now, this is the most abstract and toughest out of the three because sometimes you can't prove how long something will take to re-let.

But the best way I've found it over the years to understand the re-let ability is just to find similar properties.

Go on RP Data or Price Finder and you can actually see when a lease ad was put online and you can then see when it was first filled.

So if you can find enough similar properties, you can actually quantify the average vacancy similar properties have had.

But with commercial, often there aren't many similar properties.

Like if you're buying a fast food property or a supermarket or a very large warehouse and there hasn't been a large warehouse go vacant in that suburb for quite a while.