After you’ve been in commercial property investing a while, you start to see patterns. The mistakes repeat themselves — usually in new packaging, often with enthusiastic branding. Every year there’s a new “must-buy suburb”, a fresh wave of overly optimistic yield projections, and someone claiming they’ve cracked the code using an Excel sheet and sheer confidence.
The trick to avoiding those mistakes is to get better at spotting what matters before you’ve signed anything or paid for someone else’s bad idea.
Whether you’re sizing up a warehouse in Danang or narrowing down commercial real estate to buy in Melbourne, here are the five things that should always be on your checklist.
1. Location (still matters, unfortunately)
You can’t move the land. That’s the first rule. You can polish a dated building. You can renegotiate leases. You can even make peace with the beige carpet. But you can’t change where your property is.
A strong location isn’t just about postcode snobbery. It’s about proximity to what makes a business work — transport links, suppliers, customers, labor. For some tenants, being 15 minutes closer to a freight terminal is the difference between profit and pain. That matters more than trend pieces about “emerging precincts”.
2. Yield is a number, not a guarantee
High yield is often a red flag rather than a bargain. If something’s offering 8% when the average is 5%, ask why. Is it a distressed asset? Is the lease about to expire? Will the area soon become a retirement village?
Sometimes chasing high yields works out well. Other times it turned into 12 months of phone calls, legal fees, and an asset that wouldn’t sell even with a bow on it. Look at the fundamentals before you look at the return. A lower yield on a rock-solid asset will beat a high-risk windfall nine times out of ten.
3. Building condition: bones over gloss
Cosmetic upgrades are cheap. Fixing structural issues is not. If the property’s been painted recently, but the roof is older than the internet, proceed with caution.
Get a proper inspection. Not the kind where someone pokes a few tiles and nods sagely. We once bought a warehouse with a “minor drainage issue” that turned into a six-figure excavation project. Cheap doesn’t stay cheap if it’s hiding problems.
4. Zoning and future use potential
What you can do with the land tomorrow matters more than what’s happening today. Planning overlays, zoning restrictions, proposed infrastructure — these are the quiet forces that turn a forgettable block into something valuable.
If you’re buying on the edge of an industrial zone, is that area being rezoned to mixed-use? If so, you may be sitting on a sleeping giant. Or you may be sitting next to a future set of height limits that will quietly kill resale value. Know the rules. Better yet, know the changes coming.
5. Liquidity: who’s going to want this after you?
You may love the site. The numbers may work beautifully. But if the pool of potential buyers is tiny, your exit strategy is weak. Niche properties are fine — as long as you’re prepared to hold them for a while, or sell at a discount when the music stops.
We once held onto a medical suite for years longer than planned, simply because the buyer pool was a handful of specialists and one developer with cold feet. Great rent. Awful liquidity. Always factor in your exit before you sign the entry.
Properties don’t care how enthusiastic you are. They just perform, or they don’t. Hype won’t pay the bills. What works, in the long run, is choosing assets with solid fundamentals, doing your due diligence properly, and ignoring anything described as a “once-in-a-generation opportunity” unless it comes with audited financials and a spare generator.
There’s no perfect deal. But there are deals worth doing — and ones worth walking away from. The trick is knowing which is which before you’ve spent the money.