Industrial Units

[Bazza]

We are looking at purchasing a new Industrial (factory) unit as an investment property. I guess there are many differences to that of residential property: GST, stamp duty, depreciation etc ?

The yields seem reasonable (about 6.5%) and little maintenance but the capital gains look lower than residential properties.

I would greatly appreciate if anyone can give me some advice on investing in industrial units and any traps for new players.

Cheers,

Bazza

 

[MJK]

Commercial property carries MUCH higher risk. The yield I would be looking for would be around 9-10% minimum. There is absolutly heaps to know about commercial as it is very different to residential. Do a search
under "commercial", I can remember some good discussions.

MJK

 

[MJK]

OK I'll be generous,

1. Interest rates are different. (higher)
2. Deposits are different 30% (usually)
3. Capital growth is measured differently (via the yeild)
4. Values are different depending on wether a unit is occupied/leased or not.
5. Property would preferably have a wide range of use rather than be specifically designed.
6. Vacancies can be 6 Months.
7. There are fitouts to consider.

That should get you started.
There are many benifits also but always consider the risk.

MJK

 

[likewow]

8 Tenants pay outgoings.

 

[Bazza]

Thanks MJK - much appreciated.

It seems Commercial is very different. 6 months vacancy would be a killer!

Cheers,

Bazza