Thinking if investing in commercial

[crusty]

Hi Guys
I am thinking of investing in commercial am have learnt a lot from reading all the threads i can on this site.
But is it natural to be as cautious as i am feeling if it was an ip i would just jump in knowing that it will rent?
The one i am looking at is tenanted for 5years with option of 5 great return etc etc .
But i am still scared why and how do you get your mindset around this .
Is it because i might have to play with the big boys?
Thanks for listening to my dribble

 

[Miss V]

I know what you mean!

It's scarier than when I took my first baby steps into residential property. I am currently reading Good Commercial Sense by Karina Barrymore. It has interesting information that may help you out with your decisions.

Just do everything that you would with resi - research, research, research.

cheers

v

 

[GreenTreeFrog]

We are in exactly the same position as you with the same feelings. I think they are like first date nerves - lots of scary, nervous excitement!

What sort of property is it?

 

[stgeorge5_8]

if its currently tenanted jump str8 in.

research should include what the current rental return is and what the market is currently at. Look at whats available to lease in the same area to get a guage at how much is currently available too.

huge surplus available in my area. market price is well above what ppl have been use to paying in other areas

 

[crusty]

Thanks for your Replys
just a few details
Lease will be 5+5
Rent $34720
Purchase$425k
Tenant to pay all outgoings
Cant seem to come up with why not to do it but just keep hesitating but i know it makes real good sense to just do it

 

[Giulio Taranto]

numbers seem to be healthy.

 

[JIT]

Thanks for your Replys
just a few details
Lease will be 5+5
Rent $34720
Purchase$425k
Tenant to pay all outgoings
Cant seem to come up with why not to do it but just keep hesitating but i know it makes real good sense to just do it

Is that the gross rent or net rent?

GSJ

 

[traveller]

I have been struggling with this question for sometime now:

That is, why not go a for Listed or Unlisted Property Trust which gives distribution worth 8% instead of just relying on single CProperty and no diversification.

No head aches of Management, Repairs, Vacancy, Instant Diersification etc etc.
I am sure there are a few minus points as well like we have more control when we buy it ourselves but i see scale of Commercial Properties largely outside the range of a normal PInvestor. And this is not only in terms of purchase price, but also repairs, value adds etc....

Looking for some constructive feedback from all here...

Thanks-

P.S: Crusty - Dont intend to hijack your topic. But as somebody looking for Commercial Prop. in the same price range i have had this dillemma for sometime. If required i dont mind starting new thread for this...

 

[lizzie]

no control ... can lose the lot with nothing to show if the lpt goes bust.

risks and rewards. i think commercial is a big psycological step for resi investors - perhaps a pm to dazzling can help alleviate (or exaserbate) any qualms

 

[Dazz]

I'm already getting swamped with PM's. Please don't PM me with things like ;

"We own a few ressy properties already and have been thinking about getting into comm. and have no clue where to start. It sort of sounds good but everyone says it's risky so.....can you tell me everything you know please. ta very much !!!"

Happy to chip in every now and again.....but adult folks need to stand up and do their own DD. I'm not qualified to officially say BOO to anyone.

Three years ago the wife and I were in the same position.....it takes a while to learn to swim in these different waters. Please don't stand on the side of the pool and ask me 1000 questions about how to swim. Trundle on down to the shallow end would be my suggestion (just as we did) and have a play in the ankle deep waters. If it's too scary or you don't feel comfy, pop out and jump back into the ressy pond.

Whatever you do, don't jump into the deep end of the comm. pool, get chomped up by one of the big barracuda's that lurk in these waters and then say that it's no good.

Anyway....not to dampen the spirits and all.....

 

[crusty]

It is a Net return.
Thank you all for your insights.
Nice way of putting it Dazz might just start swimming very soon.

 

[tropic]

Crusty,

Are you planning to use company, trust or personal name to putchase this property? I also like to own a small commercial property just to get started.

 

[nomadic]

... Trundle on down to the shallow end would be my suggestion (just as we did) and have a play in the ankle deep waters.

...something like this perhaps - a nice little commercial (retail)

http://www.somersoft.com/forums/showthread.php?t=34255