Have Cash, happy to stretch into Commercial, where to start?
- Thread starter LoneWolf
- Start date
Read the SMH Saturday edition - leasing ladder in the commercial section, get thursday edn of the Aust Financial Review, enrol yourself in a basic intro to commercial property
What is your budget?
I did it for the first time recently (buying commercial property that is!!) lone wolf.
For me it was a 'retail space'. There are so many factors to consider, in terms of the variables that impact price, however they may be different for industrial spaces based on location, which may or may not be easy to lease.
I measured cost per square metre, mine was new and through self managed super so for me, it was a bit of a no brainer, as the office will be used by Redwood and would be leased to Redwood so no issue with lease.
Mine requires a fit out, no biggie, it will have a VB vending machine which I will need to assess for depreciation, however design is paramount particularly if leasing out.
You can always use RP data to see comparable sales by sq metre.
Of course the return on investment plus depreciation benefits are paramount to effective cash flow.
Commercial will generally be higher yield but may have an issue with vacancy.
Just some thoughts
Cheers, Ivan
For me it was a 'retail space'. There are so many factors to consider, in terms of the variables that impact price, however they may be different for industrial spaces based on location, which may or may not be easy to lease.
I measured cost per square metre, mine was new and through self managed super so for me, it was a bit of a no brainer, as the office will be used by Redwood and would be leased to Redwood so no issue with lease.
Mine requires a fit out, no biggie, it will have a VB vending machine which I will need to assess for depreciation, however design is paramount particularly if leasing out.
You can always use RP data to see comparable sales by sq metre.
Of course the return on investment plus depreciation benefits are paramount to effective cash flow.
Commercial will generally be higher yield but may have an issue with vacancy.
Just some thoughts
Cheers, Ivan
Hey Scott, thanks for the link
Thanks Ivan, makes sense when you are buying it via SMSF and also using this space for yourself.
PS: I may need to chat to you privately about accessing SMSF (my super), and using it to my advantage
JacM, thanks for your comments, my goals are clearly defined and thanks for reminding me
Why Commercial? diversification, and attracted to the double digit returns, put it simply
Thanks Ivan, makes sense when you are buying it via SMSF and also using this space for yourself.
PS: I may need to chat to you privately about accessing SMSF (my super), and using it to my advantage
JacM, thanks for your comments, my goals are clearly defined and thanks for reminding me
Why Commercial? diversification, and attracted to the double digit returns, put it simply
commercial
To me commercial is great but be careful buying bottom end. I remember the early 90s when many people had invested in small factories, many lost most of there money when the market crashed. Generally the entry price for high quality commercial property is much higher.
Personally I am investing in commercial but in the United States where you get a lot more for your money. We recently brought an office building in Florida with 5 investors for 1.4 million and it will return around 35% on cash. Not every deal is this good but in a rising market it does create opportunities.
If you are looking in Australia hen maybe see if you can invest and get a share in a larger investment.
To me commercial is great but be careful buying bottom end. I remember the early 90s when many people had invested in small factories, many lost most of there money when the market crashed. Generally the entry price for high quality commercial property is much higher.
Personally I am investing in commercial but in the United States where you get a lot more for your money. We recently brought an office building in Florida with 5 investors for 1.4 million and it will return around 35% on cash. Not every deal is this good but in a rising market it does create opportunities.
If you are looking in Australia hen maybe see if you can invest and get a share in a larger investment.
evidently - just looked at some US comm listings and they seem to be the typical 5 to11% cap rate?
Commercial property
The easiest commercial property to invest in is a shop or strata office. Industrial has highest yields but greatest danger of vacancies - go for warehouses that can be used for storage by online retail or logistics with high clearance entry/exits. But as someone said - look to spread your risk across a portfolio of properties by investing in a syndicate.
The easiest commercial property to invest in is a shop or strata office. Industrial has highest yields but greatest danger of vacancies - go for warehouses that can be used for storage by online retail or logistics with high clearance entry/exits. But as someone said - look to spread your risk across a portfolio of properties by investing in a syndicate.
Use Rawlinsons or Cordells construction guide. better than a poke in the eye.
Construction costs have risen substantially as many councils no longer accept a plain square facade.
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