Commercial property Guru’s,
Just as an idea..what do you think of this commercial property ?
Pro’s and con’s ??
Very Impressive strata titled office located just metres from the busy shopping precinct and only 10 minutes from Perth City¡K
Positive Cashflow
„h Strata area of 87sqm
„h Internal office area of 59sqm
„h Gross Rental Income $22,420pa
„h Let to 31 December 2005
„h 3% Annual rent review
2 year optionCapital Growth
„h Major street exposure
„h Reverse cycle air-conditioning
„h Convenient corporate boardroom
„h Onsite secretarial support available
„h Reception support offered
„h 2 secure car baysInvest in style with this 2 level office complex that just oozes success and enjoy the benefits of commercial property investment
Water Rates – $436pa Shire Rates – $725pa Strata Levy – $4350pa + GST
$199 000 ( sold as a going concern)[^][V][
]REDWING
“The man that thinks at 5o as he did when he was 20 has wasted 30 years of his life”
What are the tenants like?
Hi,
the main thing i have learned about commercial property is that the tenants and the length of the lease is paramount to success
on paper commercial property always looks good or better than residual but business have a greater chance of failing than residents
cheers,
bluecatDo today what you want to do tomorrow
Normally tenants would pay the outgoings, check over the
lease to see what their responsibilities are.Things that commercial tenants should be paying:
* insurance
* council rates
* water rates
* land tax if tenant is a public companyandy
Redwing
I am no commercial guru but we do have commercial property.
Because I am a bit of a sceptic, whenever I see a tenanted commercial property for sale I immediately think, why?
Of course the reason could be anything but in many of the deals we have looked at it has become apparent (after digging around) that the tenant is not going to take up the option when the lease expires.
Another reason we have found is that most of the depreciation has been used up and so the property is disposed of. Might want to check that out.
That is not to say there are not good deals. The one you quoted looks ok considering it’s location, yielding between 8.3 and 10% depending on who is paying outgoings. Any depreciation benefits will obviously sweeten it up.
If the current tenants were to vacate in 2005, would the premises appeal to a wide range of businesses?Regards
SMTM> Another reason we have found is that most of the depreciation has been used up and so the property is disposed of
I dont know anything about depreciation, but if someone asked me I would have suggested the depreciation starts again with the new owner can you educate me one this matter?
BC
Hi,
I would have thought that depreciation was an ongoing thing based on the level of depreciation of the item. Maybe i’m thinking too residential – more education is probably needed on commercial property.
That is the great thing about forum you can learn that there is still so much to learn
cheers,
bluecatDo today what you want to do tomorrow
Depreciation starts with the life of an asset and the value declines until it is zero. When you purchase in depreciable asset you don’t get to depreciate replacement cost – only attributed cost when purchased.
If most depreciable items have been depreciated to almost zero you would need to replace them to start again (big cost for the sake of tax benefit).
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