Thoughts on a commerical property

[suggo]

Your opinions on a property (building and a bit of land) 273 sqm with a 5x5 lease that is one year old, return $20800 per year (yeild 8.7%). Priced at $239000.

I was thinking that commerical property should probably be getting a bit better return!?

 

[geoffw]

Suggo,

Scant information.

(Not that I can provide an answer even with more info )

Commercial property yields might depend on
.Location (of course). But a city might be of help.
.The tenant (the more relaible, the lower the yield)
.How suitable the property is for the tenant
.How high the demand is for that sort of property

 

[brains]

Most investors wont look at commercial property if the yield isnt above 10% gross.

The returns are higher to compensate for the higher vacancy periods with commercial real esate.