What ya think

Hi all.

Thinking about my first commercial property.
Mid north coast. 90 sqm in size
Office block location in central part of town.One of three in the block for sale.
Three incomes through three different tennants totalling $400 per week.
Outgoings are $1400 strata and $1400 rates.

Should get it for $150,000 to $160,000.

What ya think. further investigation maybe ?

Cheers
 
Hi all.

Thinking about my first commercial property.
Mid north coast. 90 sqm in size
Office block location in central part of town.One of three in the block for sale.
Three incomes through three different tennants totalling $400 per week.
Outgoings are $1400 strata and $1400 rates.

Should get it for $150,000 to $160,000.

What ya think. further investigation maybe ?

Cheers

Are the outgoings annual or quarterly?
 
Doesn't sound too bad then. Maintenance, insurance, interest rates and vacancy would be the main concerns that could keep the investment at break even for a while.

Not my cup of tea though as I'm buying comm property in USA (through ASX REITS) where values are lower, yields are higher, interest rates are lower, population is expected to grow, and there will be very limited new supply for many years.
 
Hi all.

Thinking about my first commercial property.
Mid north coast. 90 sqm in size
Office block location in central part of town.One of three in the block for sale.
Three incomes through three different tennants totalling $400 per week.
Outgoings are $1400 strata and $1400 rates.

Should get it for $150,000 to $160,000.

What ya think. further investigation maybe ?

Cheers

What are comparable office spaces getting per sqm per annum? Leases have security bonds? How long each lease and how many options? What rent review mechanisms in place? Had a look thru Bcorp records and figures? What depreciation will you get?

And why is vendor selling?
 
I will have to check on the details stated above. Thank guys. First hickup at this stage is finance.
60% lend from Westpac and that is not enough.
I have funds set aside for my subdivision/build but little for this. After my sub I will have plenty of equity but nothing right now.
80% lend may get me across the line.
Time to see a broker I think.
 
I have given a local broker recommended to me all my numbers. He says i may be able to push 80% .Im going for a face to face next week. I have to start doing this anyway as my total borrowings are getting up there now so the local bank manager may no longer be doing his best for me.

My last option is a mate who will lend me $40,000 no worries. Problem is paying it back. If i got a loan down the track to pay him off the interest on that loan will not be tax deductible.

I also have an additional $40,000 savings that will not be used for my subdivision but that is my buffer and i dont want that amount to be touched.
 
Sounds to me like you need to do your development, cool your heels for a while, gather your resources and then look at this thing again when it becomes your top priority.
 
anyone else see that switzer interview? the guy reckons we are headed for the mother of all property booms, specifically in the office market, starting in sydney and melbourne.
 
Yes the timing is off. Another office next to this one popped up for sale a few years ago and i missed it due to timing.

At the moment my current development is eating up the last of my available equity( cash buffer not included). But on completion i will have a property worth a safe $350,000 but only financed by a $180,000 loan.This should free up an additional $100,000 equity. At this point i would jump on the commercial property in a flash but like most things in life. They never happen when you want or need them too.
 
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