Market Downturn

History repeatedly serves to show us that the real estate market is cyclical. It has boom times and stagnant times, occasionally it suffers a crash but real estate never becomes worthless, therefore if the experts are right and we’re about to suffer a slow to stagnant period in the real estate market, all is not lost!

There are 5 fundamental secrets that real estate investors like to keep close to their chest and they are the secrets that enable them to survive and even profit during a bear market.

This article blows the lid off the secret world of the professional real estate investor!

1) Aligning For Profit in a Bear Market

When professional property investors believe the market is entering a downward phase i.e., changing from Bull to Bear - they will change their investment strategies accordingly. One method that tough investors apply is to buy up property in the best areas that they can afford once a market is slumping already. Professional real estate investors know that the best areas for property always boom again very early on in the next property cycle.

By working in this way they can then leverage their investment by selling their property early on in the boom cycle and buying elsewhere and always remaining one step ahead of less professional investors or average home owners.

Up and coming areas will eventually peak as well of course as they are swept along on the tide of the boom, but they will not peak first and investors in these areas will have to wait longer to see their profits.

Professional investors will likely enter these areas just before they peak and sell up just before the heat goes out of the market enabling them to again buy up what they can afford in the best areas thus positioning themselves ready for the next upward trend. And so it continues!

2) Slow Down Your Speculating

You may already have decided that the time is no longer right to be over extending yourself and you may have cut back on your property purchases, but remember that making any home improvement or taking on any renovation projects during a downward period of the property market is also considered to be speculating. Don’t just assume that capital appreciation from your property will justify home related expenditure right now…in a bear market it won’t.

3) Never Forget The Supply and Demand Theory

Property prices don’t go up infinitely, if you examine the ebb and flow of the market in the US over the past decades for example, you will see that stand alone investment in real estate would’ve returned you gains of just over 1 percentage point above inflation! There comes a point in every market cycle when the market runs out of investors willing to buy up at the top prices and there comes a point when first time buyers are frozen out of the market. As demand dries up, over supply brings down prices and this stops the entire market in its tracks. If you remember this fundamental fact and examine the movement of the market closely and carefully you will be able to see when supply is about to outstrip demand, you will be able to watch first time buyers reigniting the market, you will understand when the time is right to sell and when the time is right to buy.

4) Balance Real Estate Exposure

You may assume that your only exposure to the property market is what you physically hold in the way of real estate assets – but don’t forget all your paper investments as well. Do you have money invested in REITs, do you have funds that invest in commercial property as part of the underlying portfolio, what about your retirement fund, which market sectors are the find managers investing in on your behalf right now? Don’t assume that fund managers will make the right decisions at the right time on your behalf, you might be able to see the heat going out of the market quicker than they can react. If this happens you have to be prepared to rebalance your entire portfolio and move your exposure away from real estate if you believe the market is about to dip.

5) Protect Your Equity

There is nothing more valuable than the equity you own in your own home. Do not put that at risk. It is very tempting in a boom market to re-mortgage yourself back up to the new greater value of your home, but in so doing you expose yourself, your family, your home and your future to unnecessary levels of risk. Secure the roof over your own head first and foremost, and only then proceed into the greater real estate market with care! Do not be tempted to secure any extra loans or mortgages on your family home. Professional and wise real estate investors worth their salt will always secure their own position first and foremost.

Landlords Lease Strategy

Leases are the cornerstone of the cash flow to the investment property. For that reason lease strength, structure, and integrity is quite important to the future of the property.

When real estate operatives are working with an Investor in setting up or exploring a new property appointment, it is important that they ask the right questions regards the tenancies and leases. In only this way can you get to the lease plans and strategies that are needed to match the property to the landlord.

In this article we provide a number of key lease concepts which can be discussed with the owner in the early interview process on the investment property.

Each item below can be expanded subject to the nature of the property. You may then formulate your own fuller questionnaire which supports the process.

Key Lease Issues

1. Rental income - seek to understand the levels of rental paid by rental category and by each tenant. Understand that some tenants can pay more than one type of rental such as storage rental, and car park rental. You need to explore all the types of rentals which are paid on the property. You then need to compare those rentals to the surrounding market.
2. Percentage rental and base rental - these types of rentals are common in retail property and usually reflect an extra rental payment or an escalating rental payment under certain circumstances relative to the tenant's trade levels.
3. Licenses -- the use of licenses is quite common in all investment property and is normally the way of documenting other types of proper usage and occupation beyond the normal tenancy scenario in a lease. In particular licences can be used for signage rights, signage, storage rental, and car park occupation. The licences are normally renewed each period of 12 months and feature terms and conditions relative to the item or location that they are the subject of.
4. Electricity charges - electricity is always active within tenancy occupation. It is necessary for you to understand how the electricity is supplied to the tenants and paid. In some properties it is common for the tenant to arrange their own supply from the local energy supplier. In those circumstances they would pay for their power usage direct to the supplier based on the consumption of the tenant's premises. In other buildings of multiple tenant occupancy, it is common for the landlord to buy the energy and power into the building in a bulk supply from the energy supplier. This means that the landlord pays for the energy themselves and then charges the tenant for their own consumption usually on a per calendar month basis. In such case each tenancy has their individual sub meter which monitors the energy consumption relative to the tenancy. Please note that there are various consumption levels and rules in this process. You must check with your energy supplier and identify rules relative to your location.
5. Cleaning charges - the cleaning of a commercial property is obviously important and needs to be controlled. Under the terms of the lease, obligations of cleaning the premises are imposed on the tenant and or the landlord to ensure that clean conditions are maintained on the property. In some circumstances the entire cleaning discipline is delegated to the tenant who must ensure that certain cleaning duties and levels of presentation are maintained throughout the year. In that circumstance the tenant pays for those charges as they arise. In other buildings it is common for the landlord to arrange for the total cleaning of the building and also the tenancy areas. In those circumstances the landlord would charge back to the tenancy their proportion of cleaning charge based on the net lettable area to which they occupy. Understand that beyond these issues there are other cleaning charges which apply to the common area in the building and they are toilets, window cleaning, foyer cleaning, and other sundry cleaning issues. Common area cleaning is normally processed through the building outgoings and subject to the terms of the lease can be charged back to the tenant at the end of each financial year. Please read your lease accordingly.
6. Signage rental - some tenants will, through special arrangements with the landlord, gain approval for signage to display their business name. That signage is simply installed outside the tenancy or at a particular point on the property. In other circumstances and particularly in city areas, you will see some major tenants purchase the entire signage rights of the building and thereby install large signage on the building and brand the building as their own as far as 'identity' is concerned. All matters of signage should be documented so that any rentals which are agreed for the signage rights are paid under the terms of the lease. In many circumstances the existence of signage on the outside of the property will firstly require the approval of the local planning authority or council; this must be checked and all normal approvals from the authority gained before you proceed further.
7. Miscellaneous rentals - there can be many other types of rental applying to tenant occupancy. Such items may be rental for air conditioning use after hours, rental for the installation of communications antennas and systems in the building, rental for the use of storage areas elsewhere in the building. Explore these different types of rental so that a complete picture at income is fully available in your analysis of the building. If a tenant asks you to do something special regards occupancy, it is likely that the matter could attract a rental. Any income is good for the landlord and you should be vigilant in opportunities for income generation.
8. Outgoings - outgoings are charges which relate to the running costs of the building. In particular these running costs involve many different categories of building activity and under certain types of leases may be charged back to the tenant each financial year or each calendar month. The leases which feature outgoings recovery are commonly called net leases. If outgoings are recovered from the tenant as part of their occupancy, you need to understand what the tenant does pay for and how often that amount of money is paid. Usually, if there are tenant outgoings to be paid, there is a reconciliation process which applies at the end of the financial year to adjust for any over or underpayment relative to that tenancy area. The history of these outgoings payments is of interest to a property buyer as they consider the price that they should pay for the property.
9. Outgoings and the base years - in some buildings there are leases known as gross leases. As the name suggests and indicates, the tenant has received an occupancy which includes some of the outgoings charges if not all the outgoings charges applying to the tenancy area. This means that they pay one rental per calendar month and no other charges. In some circumstances however these gross leases also feature and include a base year for outgoings purposes. This base year reflects the value of the outgoings in the first year of the tenant's occupancy only. Should the outgoings for the building escalate above the base year component in subsequent financial years whilst the tenant is in occupancy, then the tenants can be charged for the escalation based on their occupy area. This component is called the base year component for outgoings purposes and calculates and reflects the increase of outgoings above the base year. A lease of this type is sometimes called a 'semi-gross' lease. This suggests that the rent does not include all of the outgoings, and that other outgoings are to be paid.
10. All outgoings categories recovered - when exploring new properties for lease or property management, seek to understand all the types of outgoings which apply to the property and are paid by the landlords tenants. A comprehensive list of outgoings recoveries is important to the final net income for the property and will impact the price that the property will gain at sale. Seeking historic detail regards these outgoings is also very useful and important particularly when it comes to budgeting processes each financial year in preparation for the new financial year.

So these are some of the main lease issues to look for. In all cases of property review you should read the lease in complete detail before commenting on market matters such as buyer or tenant interest in the property. One lease and the terms contained therein can change the market interest in a property substantially.

Commercial Mortgage

A commercial mortgage is a loan that uses commercial property as collateral. A commercial mortgage is a business loan which is secured against a commercial property.

Commercial mortgages are often used to buy business premises, such as offices, shops, restaurants, or pubs. But they can also be used to buy other business assets such as plant or machinery.

A commercial mortgage is a loan for a property that is used for business purposes. It's probably the best way to finance the purchase of buildings and land for business because it provides a flexible and affordable solution that gives you access to capital.

A commercial mortgage is probably the best way to finance the purchase of buildings and land for business purposes. It provides the most flexible and affordable finance solution. Commercial mortgages are specialised due to the fact that the lender has a legal claim over the property until the loan has been repaid in full.

As well as being a useful way of financing the purchase of business premises for a new business, commercial mortgages can also be an excellent way of funding the expansion of an existing business.

A commercial mortgage gives you access to capital that you would not normally have access to with minimal up-front payments and the flexibility to design a repayment plan that suits your needs.

The nature of a commercial mortgage requires you to pledge the purchased property to the lender. If you default on the mortgage, the lender is able to foreclose the property and sell it to repay the outstanding money owed to the lender.

A commercial mortgage can be used to buy most types of commercial buildings, such as shops and offices, for both new and existing businesses. A commercial mortgage can also be used to fund investment in land or property which will be used for commercial purposes.

The interest rates on commercial mortgages tend to be lower than the interest rates on unsecured business loans and the repayment terms are usually longer. This makes them useful for all sorts of business financing requirements.

A commercial mortgage can be a cost-effective way to fund many business activities. They can be used to develop an existing business through the purchase of increased office or factory space.

A commercial mortgage can also provide a way of raising additional business loan finance, if the finance is linked to business activity.

The amount of loan required and the level of interest charged will depend on your credit worthiness and an assessment by the provider of your ability to repay. If you have an exemplary business record and have other visible business assets which can be used as a guarantee, then you'll have no trouble getting a commercial mortgage at an attractive rate of interest.

A commercial mortgage can be available for almost any period from 12 months to 25 years.

There are generally two types of interest schemes available when you are applying for a commercial mortgage, fixed rate and variable interest rate.

The Lender will usually ask you to provide your last three years of audited financial statements including a Profit and Loss statement, balance sheet and a cash flow forecast.

Commercial mortgages are specialised because the lender has a legal claim over the property until the loan has been repaid in full. In the event of non-payment the property can be repossessed and sold to repay outstanding mortgage balance.

Leasing Office Space

All small businesses face the decision of whether to buy or lease office space. At some point your business will outgrow your current location and will need to be moved to a bigger one, in order to facilitate further growth of your business. Before you start looking you need to decide whether you are going to buy or lease office space. There are advantages and disadvantages with either option. Analyze your business requirements and options and make an educated guess.

Leasing is a good solution, especially if yours is a rapidly expanding business. Leasing gives you the option of operating out of a prime location. Offices for lease are generally located in downturn areas. Leasing also frees up capital to invest in other areas of your business. But with leases there is a possibility that you will face an increase in rent upon contract renewal. Also leasing an office will not increase the holdings of your company. On the other hand buying an office means a fixed monthly overhead. Sometimes you can get a little extra income by renting out your free, unused space. But there are some drawbacks as well. For example, if your business outgrows your available office space, you may not be able to purchase more.

Moving out of a business place to a larger one is a major undertaking. Once upon a time looking for office space was a plain and bland affair. As time has progressed a premium has been placed on property and property development bringing on to the market a slew of properties. Competitive pricing and additional services provided by landlords has customers spoilt for choice. The new concept executive office space also ensures favorable terms for the customers. Executive office space is taking an office building and dividing it up into separate offices. This concept was born out of the economic downturn which caused property developers to lose clients and no takers for the new office space.

The office is ready to use - all you have to do is move in. The offices are decorated and outfitted with furniture. They also install business equipment in the building, so that all the people sharing the building have access to the equipment. They also provide kitchens. It's much like a service apartments. Some of the salient features of executive office spaces are that no long term lease is required. The space is available after signing a simple lease agreement. The space could be leased for a day, week, month or for as long as the executive office space is needed.

You also need to consider the location of the new office with respect to your employee commutes. You could lose valuable human resources if the location of the new office is far away from the current one. After considering all the options and deciding on whether to buy or lease conduct thorough research, because there are huge gap in prices and opportunities in the realty business. Also consider the future plans of the buildings and the growth prospects of the area you want to move to.

Landlord Insurance

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Landlord insurance is not a legal requirement, although most lenders will want to have confirmation that an insurance policy is in place if a buy to let mortgage has been applied for. Even as a cash buyer, it would be rather unwise not to take out adequate insurance. As a landlord you should consider your properties to be a business and with business there is always a risk element and investment properties should be treated in the same manner. Without suitable landlord insurance, a theft or fire can have a very detrimental effect on your long term investment and the long hours you have invested in building up your property portfolio. As owning buy to let properties becomes increasingly popular, it is important that landlords are properly covered.

As a residential landlord, it would be their responsibility to insure the building and any contents belonging to the landlord. For example light fittings, kitchen units, heated towel rails. As well as a landlords insurance covering things like fire, theft, vandalism, leaks, smoke damage, subsidence, burst pipes to name but a few, there are a number of additional options that may be available.

Landlords Liability – If someone is injured at the property due to negligence of the landlord

Rent Guarantee

Legal Expenses – Costs towards legal expenses when having to evict problem tenants

As far as tenants go, generally the tenants would then take out their own contents insurance cover protecting their personal belongings in the property.

There are a number of different Landlord Insurance companies offering landlord insurance. They may cover, let property, unoccupied property, property let to DSS, and commercial property. Make sure you know exactly what the landlord insurance policy is covering before you make your decision.

Economy, News, Prices

The city of Aliso Viejo is located in the Orange County region of the United States. It has an estimated population of around 41,424 and continues to grow by leaps and bounds. It is bordered by well publicized cities of Laguna Beach and Laguna Hills.

The economic picture of Aliso Viejo is quite diverse with many large scale options. Many large companies exist in the area and job seekers of all types can find employment opportunities with relative ease. The unemployment rate of the area is around 6% which is slightly lower than the national average. Some of the larger companies in the area include, AND1, Buy.com, UST Global, Smith Micro Software, Qlogic, and many more.

Commercial Properties:

Office space and retail space abound in and around the Aliso Viejo area. Upon searching the vacancies in and around the greater Orange County area, many options were available for business owners looking to start or expand business. In a recent survey of available options, many smaller office spaces started at around $675 a month for all inclusive offices. Retail space was available at around $3 - $5 a square foot for options up and over 1,000 square feet. Various factors go into the pricing of many spaces in the area. How long have you been in business? Are you a new company? Whatever your situation is, you need to plan ahead and decide what type of lease (or rental agreement) you will agree to. For newer companies the best idea is to sign a shorter lease - like say 6-12 months (maybe even monthly if possible), because this will give you flexibility. If you find an amazing deal on a commercial office park that offers free move in, free months rent, or any other promotion, then you should consider that.

On the other hand, if you have an established business that has a bright future, you should try to sign a long term rental lease - say 24 months or longer - since you will typically get a big discount on your lease.

The climate of Aliso Viejo is on par with many other areas in Southern California. On average the area gets no extreme temperatures, and although there have been record setting points, the average is temperate and warm with cool winters, but not getting snowfall or extreme weather often.

The Aliso Viejo area and Orange County in general has a deep concentration of conservative political movements. The area is also known for its high concentration of religious buildings and large denominations with many churches growing by tens of thousands.

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Banking and insurance institutions nationwide have vested interests in homes, cars, commercial property, businesses, trucks, stores, restaurants, or any entity requiring financing or insurance. These companies need to have updated and accurate information on the condition of this property continuously. It is simply not cost effective for them to have "field reps" in every single town in the United States. These institutions "sub" out their work to independent reps all over the country.

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Toolbox Tactics

You may say that the commercial real estate sales and leasing market is difficult at the moment. You will not be the first agent or investor to observe that fact. This is however a major opportunity market with properties adjusting to the beginning of a new property cycle.

You are at the beginning of new opportunity. Tenants, buyers, and sellers are still out there. It's just that their sales, purchase, and rental strategy has needed to shift. So if you are a commercial real estate agent that works on retail, office, or industrial property, we are going to let you in on a major marketing secret that works tremendously well to generate listing opportunity in this economy and investment property shift.

Moving Your Business Forward?

So how do you move forward in this market to create real opportunity? You create a significant pipeline of opportunity from speaking to many people and helping them with the market adjustment process. This means that the help they require may be a listing or property this year, next year, or the year after, however they will need well qualified and experienced property professionals.

You must be that solution for them. You must be confident in this market. You should use a marketing point of difference and most particularly your 'toolbox' to attract and convert the clients that you need.

Sales and Leasing Together

In this market the best commercial real estate agencies specialise in both investment property sales and investment property leasing. In those specialist categories they can bring significant strategy and understanding to the property, together with a 'toolbox' approach for the customers and clients.

A great lease will one day support a great property sale. This means that every lease should be planned and structured to optimise the situation for the property owner. This is where 'toolbox' stands head and shoulders above generic marketing of commercial real estate services.

Solicitors Awareness of Property

Whilst talking about leases I would like to make an important and relevant observation. In doing so I do not want to upset the solicitors and legal people of the 'property investment world' however the following is a real fact.

Most solicitors and legal people that do the lease documents for the investment property owner have little awareness of the actual property in question and probably have not even inspected the property.

My apologies to the legal people that are the exception to the rule!

This random process of lease preparation is not good investment practice, considering that the property lease is to produce a cash flow over a number of years. Solicitors and property agents need to get together and make sure that all the elements of the property that enhance cash flow are well considered and placed in the property lease before it is signed!

In only this way can they bring real strategy and stability to the occupancy and cash flow!

What's Your Agency Point of Difference Today?

Only yesterday I was speaking to a real estate agency that was working on identifying a point of difference in this market. They realized that the competition agencies they were up against in the market place were doing nothing special to attract and retain new business.

Those competition agencies were simply continuing the same practices of prospecting and conversion that they have been doing for years. They were not offering any new approach or support process to the clients in the market today.

Let's face the facts. This market today requires experienced real estate agents that can bring solid levels of property strategy to the investor including:

1. Rental strategies for the long term that match the lifecycle needs of the property owner
2. Lease documentation which minimises cash flow and vacancy exposure
3. Strength of tenancy profile that gives an element of prestige to the building
4. Tenants that bring financial strength and stability to the building
5. Lease deals that will enhance the opportunity of sale when the time comes
6. A balance of net and gross rentals to optimise the best return on investment for the property owner
7. Well controlled building operating costs that are contained within the averages of that property type for the area
8. An occupancy experience in the property which strengthens the relationships between landlords and tenants
9. A target market of tenants that are clearly identified and pursued in the marketing campaign.

So this list is in fact the elements of a 'Lease 'toolbox'' approach to the market. Many commercial real estate agents will generally say that they do these things anyway. The reality is they do not. Most lease transactions today are undertaken in a 'one off mindset' with little balance to the long-term future and strength of the building.

In recent seminar workshop I asked the agency staff in a larger industrial agency to tell me what they would do for 'me acting as the client' in a lease transaction of a vacant space in a sample building. Many of the agency staff gave me a broad variety of initiatives and processes that were fairly standard in the industry. It was interesting to note that all of these ideas were not 'bundled and packaged' into something that was even remotely attractive to the 'me' as the property owner.

Let's understand a simple fact. If you do not logically document and display for the client the stages of your professional commercial real estate property service and give it a name that the can client relate to, you are affectively a generic marketer. This is the major problem in the industry today. The client needs specific help and you must market your services in a 'toolbox' approach. Give your 'toolbox' a name and then market your business around it.

I also recommend that you use the advantages of PERT and GANTT models to do this 'toolbox', given that this great illustration approach really interests most clients. This helps you stand apart from the competition. You become the agency of choice.

'Toolbox' is Your Tactical Advantage

Every sales and leasing program should be subjected to the processes of the 'toolbox' so that the client knows that the best results, controls, and outcomes are seen to be achievable. The 'toolbox' process also suggests that you have a quality control procedure that every property is exposed to.

This 'toolbox' is simple marketing; however it can be easily implemented into your agency business making you more professional and desirable as the commercial real estate agency of choice in your region. Your 'toolbox' becomes your marketable point of difference. You should have a separate 'toolbox' for:

• Commercial real estate sales
• Commercial real estate leasing
• Commercial real estate property management

Within each of these elements of service you should have a specific 'toolbox' which supports the property disciplines of:

• Retail Property
• Office Property
• Industrial property
• Specialist tourism and leisure

Listing Strategy in this Market

Let's talk about the sales 'toolbox' now for a brief moment. In most cases the time needed to sell or rent a listing would be no longer than 12 weeks even in a tough market. After that time a listing becomes stale and a waste of your time. Choose your listings and the time on market with care.

A couple of essential rules need to be set here and incorporated into your sales 'toolbox'. They are:

1. Always seek vendor paid advertising - you are not the source of advertising funds to promote property no matter how good you think the property is. Vendor paid advertising sets the foundation of vendor commitment.
2. Always seek exclusive or sole listings when you can - controlled stock is the only way to go. A seller of an open listing cannot be trusted and is likely to 'shift in the wind' on who they deal with. It should also be noted that exclusive listings are much more desirable than sole agency listings. It is your choice as to whether you would take on a sole agency.
3. Always seek to list properties for sale on the basis of a 'time driven' method of sale such as tender, auction, or expression of interest. This is the best way to go to get and sustain momentum in the property promotion. Properties that are listed for sale at a fixed or nominated price are likely to be this undesirable hard to sell listings or over priced listings with little momentum. In such situations a buyer will make an offer; maybe that works for you; maybe it doesn't.

These 3 rules above infer that you are the driving force that creates the quality listing. Nothing could truer. You drive the quality of the listing appointment that you want. If you let the owner of the property dictate the rules of engagement, you are likely to suffer poor results. Remember that you are the expert consultant to help people with commercial real estate needs; you are not the agent that lists everything and anything that comes your way at any price or rental.

In closing this 'toolbox' topic, here are some important rules:

• In every listing know what you are doing and why.
• Focus on the outcome that you want for the client.
• Use your 'toolbox' as your point of difference to attract the client's interests.
• Understand that your time and expertise is precious.

Choosing a Realtor

Purchasing a property, either as an investor or as a prospective homeowner can be one of the most exhilarating and frightening experiences of your life. In both situations it is imperative that you find just the right property at the right price. With so many options to choose from it can quickly become overwhelming. Start with Credit Unions to help you make the most of this exciting purchasing process.

Searching for the right property can be exhausting. Not only do you have to keep a price range in mind but you also must search out the elements of neighborhoods that are important to you. Choosing the right realtor makes a difference between chaos and calm.

There are a few tips that you should keep in mind when choosing a realtor. Considering the fact that you are making a major investment, it’s important that you locate a realtor you will feel comfortable working with. You will need to find a realtor who is competent and professional, as well as knowledgeable and who respects your time and the fact that you are committing to a serious investment.

Although consumers are generally unaware of this fact; realtors are generally classified as either seller realtors or buyer realtors. This means that they must represent the best interests of one or the other. Far too often individuals who are searching for properties select a realtor and believe that person will just naturally take their best interests into consideration. This is not always the case because most realtors, unless they specify, are actually seller agents. This means that their primary goal is to obtain the best deal possible for the seller. If you are looking to purchase a home and want to choose a realtor who will represent your best interest you should look for a buyer agent. If the realtor does not specify, chances are they are a seller agent.

After determining whether a realtor is a buyer or a seller agent, your next step will be to check out the realtor’s background. Obviously, all realtors are governed by the regulations of their state and must meet certain licensing requirements but you will need to check on information above and beyond this. Look for someone who specializes in the type of property that interests you. If you are looking for commercial property, why work with a realtor who has no experience in commercial property? You may also consider working only with a realtor who has experience in the specific neighborhood or community that interests you.

How much experience should the ideal realtor possess? Well, it depends. Relatively new realtors are often hard hitting and will put in quite a bit of time and effort in order to make a sale. The downside to a new realtor is that they simply may not have the experience and knowledge necessary to find the right property for you. On the other hand, more experienced realtors are often quite busy and may not have the time to devote to all your needs.

Finally, look for a realtor that has good communication skills. It can be difficult to find the right property if you feel you cannot even communicate to your realtor the features you really need or want in a property. And above all; look for a realtor who has a trustworthy reputation. Integrity says far more about any professional than any other trait-even experience.

Prospecting and Strategy

In this volatile property market you need tenants in your commercial or retail investment property, and those tenants that you already have in occupancy, you need to protect. Vacancies are to be avoided at all costs. Your rent and cash flow must be protected.

The landlords and the mortgagees of assets have to know that discounted rent is still OK if it gives you rent stability and avoids a vacancy. Property pain and lower rental can be tolerated for some time if it is well managed to a plan. Everyone must share the economic slowdown when it comes to commercial and retail investment property.

The leasing managers of your competitor properties are on the prowl to take your tenants and will do all types of lease deals to attract new tenants away from your property. So how can you find new tenants for your property portfolio? In this market it is personal contact on a massive scale that will support your tenant stability and prospecting process.

Business still goes on, and there are indeed tenants in most cities and towns that need quality premises from which to operate. Your skill as a commercial or retail real estate agent in finding tenants is now becoming more important than ever before.

The qualities that you bring to your clients should include:

• A constant focus on prospecting for tenants
• Creative lease and rent packages that help the tenant get started in the new location
• A sound awareness of the regional demographics that affects your property
• Constant contact with your landlords as they adjust their property plans
• A toolbox of services to assist distressed properties with any vacancies
• A toolbox of services to assist existing tenants with business pressure

Incubation of New Tenants

One concept that works well in this type of market is the use of 'incubator tenants'. As the concept suggests, you allow tenants to grow within the occupancy of the property. There is no point in quoting or charging a full rental unless the tenant is a large corporate with an established business cash flow. Smaller tenants need help to create new trade in a new location.

The incubation of the tenant can be a solid business initiative that starts to handle vacant areas in distressed properties. Whilst you do not want to give space away for free, it is the lower rent start tenant that can be incubated to a fuller rental level over a period of 12 to 18 months. Most importantly the key question you must satisfy now is that the tenant brings to you the type of business that enhances the property for the long term.

When the property market starts to respond (and it eventually will), it is those properties with a good tenant profile that will improve faster than the competition properties.

In today's market, you should seriously monitor and optimise the following issues:

• A tenant mix across the broader property
• Develop a sound tenant mix strategy for the coming 3 years
• Manage your tenants within a groups and categories so that you achieve a variety in your tenant mix that serves the customers to the property
• Know what your customers want from the property and when they visit the property
• Listen to and survey the people that visit the property at least quarterly
• Maintain a high level of presentation on the property that shows that the landlord cares about the tenants and the customers.

Promotional Plan

Develop a promotional plan now to attract tenants. A promotional plan in this market needs to be constantly active. In itself, it will generate opportunity and market intelligence which is invaluable at this current time.

So what is in the promotional plan?

Promotion is about informing your target market about the leasing product and the property. More importantly your plan is mostly about feedback. You should know what is needed in the market and what channels of property promotion really work for you. Your strategy will usually include one or more of the following:

1. There is always high value with on-site signage promoting the leasing of vacant area.
2. Talk to existing tenants to see if any of their business friends may be looking for a new location from which to trade.
3. Ask existing tenants if they would like to trade from the vacant area at a reduced rental for a period of time or until any new tenant requires the area.
4. Any vacancy must be kept clean and attractive so that it does not detract from the other tenants in occupancy. This also has some reflection on the landlord of the property. A neglected property vacancy shows potential tenants that the landlord really does not have a good property focus or maintenance routine. Poor presentation also suggests that the landlord has no money to put to the property.
5. Special offers regards lease incentives should be clearly conveyed to any interested tenant. The existence of incentives can also be put on the signage and the internet advertisements applying to the vacancy.
6. Newspaper advertising is partially successful although it has limited use given the short life cycle of the daily newspaper. Newspaper advertising is also very expensive for the value you get back. My friends in the media will dispute this fact.
7. Professional brochures or flyers should always be distributed by direct mail and by personal contact through your area and in other competition properties. Where possible, all direct mail brochures should be followed up with a direct telephone call. This is an excellent channel of market intelligence that can be entered into your database for future use.
8. All vacancies should be lodged on the internet so that any enquiring party can conveniently get the information they require. The internet today is the most effective marketing tool we have. It is also low cost and can retain the details of the listing for a significant period of time. Freshen up the advertisements at least every 2 or 3 weeks. This also helps with your ranking opportunities with the search engines.
9. Use well researched keywords when designing your adverts for all commercial and retail property. Given that you are using the internet as your main marketing tool, it is the key words that will attract more hits to the advertisement.
10. For new property developments and any significant prime property, it pays to develop a dedicated property website that informs tenants and members of the public on any property matters. The domain name and for the property must be well chosen so that it reflects and identifies the image you require for the asset.
11. A vacant area in a significant property should be supported by an extensive high quality brochure that can be made available to prospective tenants. The brochure can also be made available and downloaded from the Internet as a pdf file. In some circumstances, it is necessary to exchange a confidentiality agreement with the prospective tenant before sensitive information regards the property is handed over.
12. Personal canvassing today is essential. Market research is sometimes a good icebreaker for any discussion with tenants elsewhere. There is high value in personal canvassing. It keeps you in touch with your immediate marketplace and will give you a wide variety of leads and opportunities for the future.
13. Keep in contact with other commercial real estate agencies. One of the most common ways of leasing vacant premises in a distressed market is through the broader cooperation with the other real estate agencies in your area. Your business can become a coordinating leasing agency for the property, where an "overriding" fee is paid to your agency for coordinating the leasing of a building using other agents operating in the marketplace. The agency that achieves the introduction of the tenant will also get a fee or commission. This is a greater commission cost to the landlord but it does remove vacancies as quickly as possible.
14. Special leasing functions should be strategically located on the property. These can be very effective at times with newer properties, given that they expose the property to the people that do the deals. The more that you can expose the property to the broader real estate agency community, the better chances of achieving a successful lease.
15. Meet with all existing tenants every 3 months to ensure that they have what they need from the property or from the landlord to trade at the best possible level. Seek to identify any elements of expansion or contraction that the tenant wants or sees as an advantage.
16. Successful tenants in a retail property will help generate trade for other tenants nearby. Many a distressed property has been managed through difficulty by maximising the tenant mix and tenant placement.
17. Know where the 'foot traffic' moves through and in the property. These areas will be your focus points for property improvement. You can expand on a good location by creating themes and places for people to sit and spend time in the property.
18. You are the key part of the equation! You as the contact key person can help the landlord find a tenant to suit the space and tenancy mix for the property. You just need to be out in the market on a daily basis talking to people and business leaders as much as possible.

Where and when you direct your promotional efforts will depend on individual circumstances. Your experience and feedback over time will help you determine which avenues of promotion you should use locally and in what situations. There's no right or wrong answer really, but you must be able to justify your recommendations and promotion choices to the landlord. You won't always get it right, but if you base your strategy on sound research, most landlords will support you all the way. They need your help.

Get active and focused on property promotion. The leasing opportunities are out there, even now!