Commercialising your portfolio

WHEN it comes to investing, Scott O’Neill has always been about high yields. It’s a philosophy that has guided him since his early days in investing and continues to inform his current portfolio.

“I’ve always liked investing, but not having to sacrifice in order to invest,” says O’Neill. “So I’ve never really bought into negative gearing.”

The result, he says, has been a keen focus on commercial property. After several years of success in the field, O’Neill decided to start up Rethink Investing, through which he shares his expertise with other prospective commercial investors.

“Commercial property presents great opportunities for investors who are looking for something unique, beyond the usual residential properties,” he says. “The higher yields are also very attractive for many investors who are seeking immediate income.”

However, O’Neill cautions against simply diving into the field, emphasising the importance of consulting with experts before undertaking a purchase.

“People have lots of preconceptions about investing in commercial property,” he says. “But if you don’t understand the industry you’re investing in, you can find yourself stuck with a dud.”

He points to doctors’ offices as a particular example. While they may seem like a sound investment on paper – providing steady tenants and a regular client stream – they can in fact often be difficult to relet when a tenant leaves. Investors may find themselves scrabbling to find someone else to fill the slot.

“Commercial property presents great opportunities

for investors who are looking for something unique,

beyond the usual residential properties”

 

“Medical facilities are often built with very specific needs in mind; repurposing them can involve significant structural work, which undermines the prospective financial benefits,” says O’Neill. “Add to this that plenty of doctors are in residential areas, and you could suddenly be stuck with an empty property that’s only able to be used for very specific purposes.”

Liaising with the right expert, however, can provide an investor with a variety of benefi ts – they can give them advice on formulating effective investment plans, identifying off -market opportunities, using better negotiating tactics, as well as expanding into areas or types of investments that they might not otherwise have considered. Perhaps most importantly, O’Neill notes, experts can help save the investor time and stress.

“There are a lot of properties online, but a lot of them aren’t worth your time,” he says. “Having an expert help you filter through them is invaluable.”

Of course, this doesn’t mean you should rush out and go with the first expert you encounter, O’Neill is quick to point out.

“There are plenty of buyers’ agents trying to recommend properties that they themselves have no experience with investing in,” says O’Neill. “But track record is everything – look for an advisor who is in a position you wish to be in. If they don’t have a successful portfolio, can you expect them to advise you on how to build one yourself?”

Scott O’Neill is the founder and director of Rethink Investing, a BRW Fast 100 property investing company specialising in finding rare positively geared properties all around Australia (commercial and residential).

Scott is an experienced and active investor who was able to retire from his day job at the age of 28. With a current portfolio of 32 properties worth $20m, he is one of the most successful young property investors in Australia. O’Neill has a passion for all aspects of property, especially helping others find great deals.