It is not a useful measure of productivity. These are commercial assets and valued on their capacity for output.

Capacity for production is determined by several factors (planning controls):
Zoning: A property with a IN1 zoning (general industrial) would be more valuable than one with and IN2 (light industrial) zoning as the types of uses are more diverse.
FSR: How big can you go?
Type of construction: Does the process require protection from the elements & how much ie lightweight construction or precast concrete or no walls just undercover etc
Functional obsolescence (are high bays or large column free space desirable for the type of use?)

You’ll need land zoned residential for it and to submit a DA as many councils will call putting a container on a pad development.

Lease will need to cover: Rates, Services, Land tax (if applicable) and any work required to make the site ready for you to occupy eg getting power pole/switchboard, sewer/water meter.

So assuming rates @ $2000/yr, water/sewer @ $1000/yr + usage (land tax probably $nil). This would add about $60/wk on top of a 5% return on say a $400k block of land, say $8000/yr. Total would be at least $11k/yr.

How close to town will determine how much the base rent will cost you.

It may not affect finance however there are some construction quality issues if poorly executed.

?? Any clues?

@rocky, obviously smsf has its advantages especially if you’re close to retirement or can access via transition to retirement. Its one way of keeping access to higher returns in a long retirement paying low tax. Issues may arise in later years when you’re subject to larger compulsory drawings and you may need to sell.

Tax and legal advice should be sought.

Paying cash ie not declared is an offence and should be discouraged.

What happens if he has an accident?

In some cases a net lease will require contributions to repairs and maintenance but in all cases excluding replacement, structural repair or upgrades. Eg. Repairs to leaking fittings, air conditioning service etc.

• This reply was modified 9 years, 2 months ago by  Scott No Mates.

Depends on what is in the lease.

Generally REITs trade at a discount to net tangible assets.

Cashflow is pretty stable.

You’ll need to understand the tenancy profile to determine whether there are any significant expiries which may impact on returns.

Are there quality tenants in the mix?

Nil provided that this was your only ppor and that you rented or didn’t own & claim your other place as your ppor.