Commercial Property Differences

Viewing 3 posts - 1 through 3 (of 3 total)

CaptainMark
Participant
@captainmark
Join Date: 2003
Post Count: 10
October 9, 2003 - 2:08 am
Hi all,
Straight to the point…
I’ve realised in the last few weeks that it’s actually fairly difficult to find a ‘commercial’ property that would end up being cashflow NEGATIVE in my area (SE QLD).
My question to anyone with commercial property experience (that includes you Steve, I know you’re reading this… [] ) is – what are the differences, if any, that we must consider when sizing up a potential commercial property rather than residential?
I believe I have most of the basics covered (I’ve got a lot of good agents starting to contact ME now, and showing me the ropes), I’m basically after any potential traps and/or unusual ‘things’ that commercial property investing may have where residential doesn’t.
Cheers,
Mark
TamLuu
Member
@tamluu
Join Date: 2003
Post Count: 5
October 9, 2003 - 7:05 am
im a beginner but like to comment…
traps may include long term vacancies once the lease contract expires for the existing tenant.
Tenants not being able to paying on time.
Cheers
Steve McKnight
Keymaster
@stevemcknight
Join Date: 2001
Post Count: 1,763
October 9, 2003 - 7:45 am
Hi,
I think that Wright Books put out a book about buying commercial property recently. I heard it was quite good too.
After some research at Wright Books…
quote:
How Investing in Commercial Property Really Works
By Martin Roth
0 701638087 Price: $34.95
Studies have also shown that commercial property investments often perform well when other asset classes are weak. Well, the stock market is at a four year low, there are fears that residential property prices may have peaked, and with a range of new investment opportunities, the spotlight has moved onto the numerous benefits of commercial property. These attractions include high yields – generally far higher than for residential property or the stock market, security of income, tax benefits and the chance of capital gain.
Best-selling finance journalist and author of Top Stocks 2003, Martin Roth has exhaustively researched this area of investment and his findings are written up in this comprehensive new book.
As for my tips… commercial is all about yield in comparison to tenant risk. A 10% return isn’t that hard, but you want to make sure you get a quality long-term tenant as commercial is usually harder to relet.
Watch out for GST too… it is applicable to commercial but not (as a rule) residential.
Perhaps I’ll try to cover this in an upcoming newsletter.
Cheers,
Steve McKnight
**********
Remember that success comes from doing things differently.
**********
Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.com
Success comes from doing things differently