$200,000 can finance your entry into commercial property but is it right for you?
Successful residential property investors often diversify into commercial property but it is a very different ball game.
Investing in shops or industrial warehousing is a different ball game than buying the house around the corner. Longer leases and higher yields make this area attractive, but it’s a lot more work upfront.
Property players suggest the minimum entry point is a deposit of $200,000 and a willingness to work closely with potential tenants where the nature and quality of the tenant will be crucial. Moreover, it is very likely that commercial property will be held in a trust to gain tax advantages, but this does make the initial outlay more expensive.
The commercial property market can be broken into three main areas: Retail, industrial and commercial. And just like the top of town, investors are warming to the idea of flexible industrial space while there are challenges in the office sector.
Just now, vacancy rates in many parts of commercial property are as tight as residential at close to 2 per cent – with the exception of office where vacancy rates in the Sydney CBD are at 14 per cent, according to JLL.
More broadly, the action in commercial property is reflecting the action in residential property and South East Queensland is emerging as a key hot spot in the national market.
Who is the guest?
Mish Daniel is a founder and director of Revolve Commercial
Why her?
She is a specialist commercial property buyer’s agent dealing with everyday investors
What are the topics this time?
WHAT are the essential investment features of commercial property?
THE key concern with commercial tenants
WHERE are the bargains in 2023?
THE ideal investment vehicle for your first venture
Question of the week
Regular listener Dennis asks a recurring question on the show – which gets a recurring negative answer!
What are your views on investing in car parks?
Questions always welcome to the podcast, via themoneypuzzle@theaustralian.com.au
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