Which do you think would be ideal?
- Thread starter Chompa
- Start date
I've been a resi investor since 2001, and am currently a business owner paying rent in a Comm property.
My next IP will be a Comm property/ies.
No outgoings, no pain in the derrieire tenant complaints, demands, midnight runners...etc...
Higher vacancy rates possibly, but it is a factor which is still controllable to a degree.
And/or; buy/subdiv/sell resi...keep one which will be CFP and then the cashflow will be almost worth the ongoing pain of dealing with tenants and PM's.
My next IP will be a Comm property/ies.
No outgoings, no pain in the derrieire tenant complaints, demands, midnight runners...etc...
Higher vacancy rates possibly, but it is a factor which is still controllable to a degree.
And/or; buy/subdiv/sell resi...keep one which will be CFP and then the cashflow will be almost worth the ongoing pain of dealing with tenants and PM's.
Iv been thinking about this for a while. It would be higher vacancy rate. But now maybe more might take a risk with financial implements.
The rent would generally be a lot more and you could possibly lock them in for 5 years.
I believe it would be less headaches once you have people leasing it out.
But they are not generally expensive to buy in comparison to residential homes these days.
The rent would generally be a lot more and you could possibly lock them in for 5 years.
I believe it would be less headaches once you have people leasing it out.
But they are not generally expensive to buy in comparison to residential homes these days.
Not saying it is better or worse than resi but I think you need to take the blinders off.
No outgoings? Says who? It's all negotiated in the lease and in a slow market you'll be throwing in the sweeteners to get the box leased.
No midnight runners? Why not? I work in an industrial complex and I have seen a few magically shut up shop over night. We had a guy earlier this year who didn't get paid by a builder, in debt 700k, loaned money from "undesirables" to get out of the mess.
BOOM. Dissapeared over night.
How? Drop the rent? Throw in sweeteners? 6-12 month vacancies are not uncommon with commercial leases.
Fair points. I know someone getting 750 /m for his offices in perth cbd but he thinks he would be getting 400 if they were leased in the current market. Also, 30% incentives needed.
Some subiaco hospitality leases have recently been negotiated at 50% reductions too, not quite sure what the owners could do to control the above
Some subiaco hospitality leases have recently been negotiated at 50% reductions too, not quite sure what the owners could do to control the above
I'm 54 years old and have been involved in property since 1985. Blinkers are off.
True. Butt it's not always bad news, and it's not every property of course. I've taken rent reductions over the years in resi also.
Yep. they do occur. I should have said "not many".
True. We have 2 Comm's here in my town right now that are both circa 2 years vacant. One was partially let after 18 months.
Both are extremely large floorspaces, in a retail section (one was a Sam's Warehouse, one was a sec/hand furniture shop), and a smallish seaside township....not a lot of demand for larger buildings down our way - there are big ones in the local industrial estate, and most of these are full, most of the time - trucks etc. Cheaper rents than the retail on the Foreshore retail section.
A large influence on vacancy is the location and size of premises etc.
A well located and established Comm property tends to have little tenant turnover generally...many of these have profitable businesses which will stay there indefinitely.
Obviously the price will be a premium to buy in.
This is what I would be looking at as one of the selection criteria for any I would be considering.
I'm not saying Comm is risk free - neither is resi, but all things considered; there are a few Pros to go with their Cons.
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