Choosing to invest in commercial property
Have you ever considered investing in commercial property rather than housing? Do you need some office or warehouse space for your own business?
Buying a commercial property can be a better move than investing in the residential market, and moneymag.com’s Nicola Field has put together five reasons a commercial property could suit you.
House prices are too high
House prices in Melbourne are soaring, with the median approaching the $1 million mark. If that sort of money is too much of a stretch then a commercial property can be more affordable.
You can snap up an office, retail shop or small warehouse for around $300,000.
You want higher yields
Commercial property leases are usually around 3-5 years in length which is longer than residential property, providing more certainty around income and on top of that rental yields tend to be higher.
You’re a small business
If you buy your own small business premise you get security of tenure and you can control the leasing costs.
With interest rates at record lows, owner occupiers in the property market space are on the up.
Having a regular income
You can invest in commercial property indirectly through a listed property trust or an unlisted fund, which both have historically done well as a form of regular income, and Nicola Field points out in moneymag.com, they also give you a chance to access a cross-section of commercial properties.
Avoid ongoing residential property costs
Landlords of houses know too well they bear the brunt of the ongoing costs of owning a property, largely repairs and maintenance.
Taking care of these drain your time and lower your net yields, but in the commercial market, tenants more typically pay for regular expenses.