Just purchased my first commercial property. Hoping forum members can provide feedback (constructive please)
Purchase Price $215,000 + SD + Costs
Rent $15,700 (increasing 3% annually)
All outgoings paid by tenant
Lease expiry Jan 06
Based in Melb.city – multi storey building
no Car Parking unfortunately
Building tenanted by listed co.
My only concern is future tenancy but even that seems reasonably positive.
Have I missed the boat?[yackMember@yackJoin Date: 2003Post Count: 1,206
What boat are you talking about?
The SS Minnow? Tuggy the Tug boat?
What I was referring to is: I think it’s a good deal but perhaps I’m a little naive and there were some catches.
What do you think?RoofarmerMember@roofarmerJoin Date: 2003Post Count: 63
I must admit I have never bought commercial property but shouldn’t the returns on commercial be up above 10% for the added risks you are taking on. By my calculations you are only achieving a little over 7%
“Most people operate under a false ceiling which is 3 feet high” Stuart G GoldsmithyackMember@yackJoin Date: 2003Post Count: 1,206
You only wanted constructive comments so I was not sure how you would react to my comments.
1. Are you happy with yield?
2. No Car Parking unfortunately – that worries me a little.
So I dont know if you have missed the boat or not.
10% return would have been great but with this particular type of risk would have been near impossible to get. I was probably not looking at a cash flow+ situation but more for a mixture -very low from a negative gearing perspective and also room for Capital gain.Most excellentMember@most-excellentJoin Date: 2003Post Count: 100
Depends on many variables :
product/contract, neighbours, market interests ( type of building what it has to offer )
costs can be high = high tax deduction
can use this if one has other trusts/companies etc.. to help each other along.
Long term goal is prob the real winner here !