My gut tells me I'll regret not doing anything about these Meadowbrook commercial properties:
and a few similar properties around the area. I've heard it's difficult to get commercial loans with banks unwilling to lend more than ~70% and a few other hurdles, but maybe times have changed.
Is there any reason for me not to just jump onboard with my gut feeling and just buy?
Hello CJ
I don't know anything about Meadowbrook but I think just jumping in on a gut feeling without doing your DD is more like playing the lottery than investing. Gut feeling is good if everything else checks out first. Just MHO.
I checked it out quickly on realcommercial.com.au and came up with 157 different properties for sale there. It looks like a brand new industrial complex with good highway access according to the ads. I think the problem will be to get a tenant quickly. Many are advertised to sell or lease. The return, at least that of the properties advertised for sale or lease is around 7.8% which is pretty normal for a wharehouse/ office but since there are so many unless you know that the demand for the area is very high it may have to drop to attract a tenant.
It sounds like you are looking for high LVR. My worry would be holding costs. I once had to wait 9 months for a tenant. The thing to remember about industrial property is that the rent can drop dramatically in an economic downturn. You have to be able to weather both those situations.
I'm not trying to discourage you. Just saying that if you've invested only in residentual IP till now, then take the to time to educate yourself on commercial investing first.. It's a whole different ball game.Hope this helps
Elka
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