Investigate Investing in Commercial Property
Investing in Commercial Property has a lot of benefits, but it does also have its disadvantages.
Some say that an investor should have a diversified portfolio, whilst others cry that you should stick with what you know so that you do not make mistakes, well not so many anyway!
There are differences in commercial and residential investing, so it is important that you understand this.
With Commercial Properties you can charge higher rents and also you can charge for your outgoings (rates, body corp etc.). This means that your outlays are few and usually you do not get a high turnover in rental either. The downside is that if you do have a reasonably high tenant turnover, you could end up with the property vacant for several months. In regards to financing, lenders require a higher deposit on commercial property as well.
You will often have a Body Corporate to deal with, but this will depend to a certain extent on the size of the premises that you purchase.
Commercial Property often does not increase in value at the same percentage as housing, so this is another factor to consider.
Because Commercial Property does have a higher rental return (approx. 8%) it can be a very good mix with the lower return on residential.
Filed Under: Property Investment Tips
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