Hi people, looking at buying a small warehouse about 230sqm with an office inside and a high roller door in sydney...........at first i need to keep it leased then i will be operating my new business out of there, if for some reason my business fails or doesn't do to well.....are these type of warehouses hard to be leased? it is currently leased the one im looking at getting for $2,000 per month and cost of warehouse is $295k........ 2yrs old warehouse.
Small Warehouse
- Thread starter newbuilder2012
- Start date
You need to mention a suburb name 
, as it will depend on "where" it is.
, as it will depend on "where" it is.Smeaton grange
Without knowing your financials at all, I would say this: It's a very dangerous time to be a builder in Sydney (Kell & Rigby, Reed, St Hilliers, etc are just the writing on the wall), and it might be wiser not to lock up cash in property right now.
Capital growth is unlikely to be any better than a decent high interest cash account for a few more years (anywhere in mid to outer Sydney), so you'd probably not be disadvantaging yourself to hold off buying until construction actually picks up in Sydney again.
Howver, owning your own premises to run your building business from is a damned fine idea in the longer term, and you can decorate it however you like!
Capital growth is unlikely to be any better than a decent high interest cash account for a few more years (anywhere in mid to outer Sydney), so you'd probably not be disadvantaging yourself to hold off buying until construction actually picks up in Sydney again.
Howver, owning your own premises to run your building business from is a damned fine idea in the longer term, and you can decorate it however you like!
Alexandria what? A good place to by a small industrial shed? Brilliant, probably. Ask Dazz. I think he mentioned owning one there?
So is alexandria a better option? why?
They are two very different areas. Alexandria is very much a built out area, with not a lot of new development apart from knock down larger factories and build new. Its main problem is lack of land, which generally means less properties and higher demand.
Of course the cost to buy in Smeaton is far less than Alexandria.
Areas like Smeaton Grange have tonnes of land and tonnes of new development. There is less demand since theres dozens of empty brand new industrial units for lease or sale. Rent is cheaper so get startups and new businesses in as tenants, higher churn and burn/fail rates so less stable rental income. One of my clients owns (and builds) industrial units in smeaton, they recently had a tenant go bankrupt, bond/guarantee was worthless and they had a $50k cleanup bill to get the unit letable (was used by a fibreglassing company so the whole place was caked with fibreglass).
Take an area like Norwest Business Park where I own a CIP. You get new developments stealing tenants from older developments. New buildings get built, rents get dropped to attract tenants, companies move at end of lease to a new building leaving the (comparitively) older buildings half empty and unable to be leased due to the stupid low rents of the new buildings.
I planned to buy the unit and start an importing business then if it failed the business that is i would lease it out.
So im abit stuck.
So im abit stuck.
Sounds like a great business plan. Is there anything more too it though? Otherwise, yes, you should anticipate things will get very sticky very quickly.
If you're not sure that your importing business will succeed, why not try it from say, the garage of your home or a mate's home where you rent his shed or something similar.
Or even rent a commercial premise for a while to see where it leads.
$295K seems like a lot to invest in a commercial/industrial property on the basis of "no market trial to see if this thing works".
This sounds very restrictive.
In the unfortunate case of the business failing, how long would you give it to reach this point, ie, start up - operate - fail - wind up ?
Could be 6, 12, 18, 24, etc months, depending on how deep your pockets are.
Also, being optimistic, if your business were to get off the ground quickly, you may find a 230sqm warehouse way too small after a short time.
We actually started an import business (not big or bulky products), and we outgrew a 220sqm warehouse after 12 months, 6 actually, but just had to work around the cramped conditions until we could move to larger premises.
So the advice would be to rent your business premises when starting out, especially with this type of unestablished business and keep property investing separate for now.
What business?
You don't need to be an expert to get the right product and sell it here in aus buddy.
You don't need to be an expert to get the right product and sell it here in aus buddy.
This is true.
However, although good product and good sales are very important, they are not the only determining factors which lead to a successful of the business.
Just because you failed does not mean other people will fail aswell...at the same time it does not mean other people will succeed either, but im pretty confident i have the right products.
