Hi everyone. I havent heard or read much on commercial property especially with all the residential property hype in the last few years. Just out of curiosity, how many of the more experienced investors here have Commercial Property investments?
Dont know about experienced investor. We do have an industrial property however.
If you would like more info on commercial, you could start by reading
“How investing in commercial property really works”
by Martin Roth and Chris Lang.The returns on commercial/industrial can be higher, however the down side is it can also take longer to rent out.
Cheers.
Acquired a commercial strata in Parramatta 11 years ago. If you are self tennanted like myself you take away two risks :-
a) Your property is never vacant.b) You are never screwed by your friendly land lord at the end of the lease, who ups the rent to charge you for the fitout you put in 6 years before.
Not great gain, only around 70% but the rent that would have been paid will have it probably paid off in a couple more years.
Would I buy another, maybe, but have other things to invest in so its not a consideration.
Hi Rylu,
Yes I have one commercial. I have been in small business (franchise) for a number of years and five years back I opened another branch at Mornington Vic. We rented the best located property in the area and after being there for 6 months tha owners put it on the market for sale. We were shocked as we were advised that they had no intentions to sell at tha time we signed a lease. We felt insecure.
The rent was about the same as repayments so I decided to buy. Cost was $225. Some time back I sold the business to my partner. He now pays $2313 per month. The property was valued only week ago at around $400.
I have a 3X3 lease and have almost no administration to do as the tennant pays all outgoings. I do not need a PM.
In short commercial can offer very good returns with sig less effort that residential.
On the down side i have noticed that not so good properties can sit empty for several months or years! I guess its all about location, location……..
Hope this of some help. Regards,
hrm
I have a Chiropracter clinic
I’ve found a way to help you save and earn whilst not selling or delivering any product. If interested, drop me an email or PM me to find out how
Hi,
We have one commercial ppty. A Chemist Shop.
It gives great cashflow, tenant pays all outgoings and you feel secure that the tenant will be around for some time.
Commercial is definitely worth considering. You don’t need to be Einstein to change to commercial.
Just don’t sign any contract until your solicitor views it, for reasons such as GST.
Regards,
Del
I agree with Del on the issue of GST – when purchsing the chiropracter, we were going to be charged an extra 20k for GST. Thank God, I’ve got a good solicitor who managed to get me exempted from paying this.
regards,
George.I’ve found a way to help you save and earn whilst not selling or delivering any product. If interested, drop me an email or PM me to find out how
What if your registered for GST? Can you still be exempted from paying GST on a commercial property. I know that Strata Storage on Little Collins St pays for the GST. So for a storage unit thats worth $25,000 you only pay $22,000 if you’re registered for GST. Will this be applicable to all commercial property?
rylu,
Registered for GST must remit 1/11th of the business income as GST to the ATO unless the supply is exempt or input taxed such as domestic rents. Bonus to beng registered for GST is when you buy, if you are charged GST you can get it back from the ATO, but when you sell you pay 1/11th of the selling price to the ATO.Julia
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