All Topics / General Property / Commericial Property

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  • Profile photo of monkey_boymonkey_boy
    Member
    @monkey_boy
    Join Date: 2004
    Post Count: 3
    January 10, 2004 - 6:47 am

    Just wondering…

    There seems to a the majority of investors in residential property that access this forum. I was wondering if many people out there had had much experience in commericial property investments, as they seem to offer much better returns.

    A few questions…
    1. Does that higher rate of return result in more risk (i.e. greater vacancy periods)

    2. What differences are there between commercial and residential investing, besides the different ways of buying (placing tenders as opposed to seeing the offered price)?

    3. Are there hidden costs and legal pitfalls?

    4. Just recently found a property leased till 2005 with returns of 115 000 a year, however, no price was listed. What would be the price that someone could offer for this property and expect for it to have a chance of being accepted?

    5. Does commercial property generally hang around for longer than residential property? i.e. would you have to wait for a longer period of time for the price to go down than residential property?

    phew… seems like every time i post I go in with the intention of only writing one question and end up with five [:I]

    Anyway, thanks in advance,

    Luke Harris

    Bridge the gap between stupidity and managed risk with a little capital and alot of knowledge.

    Profile photo of MonkeyMagicMonkeyMagic
    Member
    @monkeymagic
    Join Date: 2003
    Post Count: 90
    January 10, 2004 - 11:23 am

    Ok, I’m not really invested in com prop but hopefully here are some answers from what I have read in a few books:

    1) Yes, usually, You tend to find vacancies are for longer, (not really more but if you get one they can remain vacant for a lot longer.) Prices to fluctuate more and tend to run with the economic cycle.

    2) The GST is the main one I can think of, GST on rents and you claiming GST on expenses or something like that.

    3) Not sure. I have heard people mention that if you go com prop you are better off having a buyers agent.

    4) Generally it depends on the purpose of the building and the flexibility of being let. (less flexible higher yield) Somewhere from 8 to 15% yield. An agent should be able to advise

    5) dunno. haven’t really looked into it in that much detail.

    Josh

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