Hi there,
Very new at the investing business however very excited to get started. My husband and I have a small business and have been renting for some 16yrs. We have been looking at residential property as Investment and have decided that commercial is a very good option given that we will be the tenants. Can anyone give any advice on commercial property investing. Anything to look out for etc. We have done the numbers and all is good.Any comments would be appreciated.
katz[biggrin]Hi Katz,
When you are looking at price, be aware that commercial property is usuaully priced on a per sq m basis. Any commercial agent will be able to give you figures for your area, just make sure you don’t pay too much on a per sq m basis.
Also be aware that there are very large differences in interest rates etc between different lenders. Make sure you are getting a good deal.
Commercial property is a great area, good luck with it.
Regards
AlistairHi, funding for commercial property is quite difficult. If you’ve fixed/secure income, you’d be alright.
The current rate for commercial property is 6.5% to 8% of yield. Sometimes the property itself may be just very ordinary.
The lending criteria for commercial property are far more relaxed now than just 2 years ago so you might be able to work out something.
To share some info, way back in 2002 I bought 2 blocks of rather tired shops & they’ve done really well. However, I had to pay for it in cash. Actually, I maxed out my home loans(i had 3 houses) to pay for them.
Today those grotty old shops pay me the exact income that I was earning as a school teacher.
So, if you find something worth considering, go for it.
Good luck,
Kum YinHi again, missed the fact that you want to buy & occupy your own premises. A bit different in scenario to me.
I always thought that I’d rent my business premises rather than occupy my own shop. The reason is my rent is tax deductible.
Therefore, unless you are the landlord to your company, it might be worthwhile to buy commercial property & rent it to someone else while you continue to operate your business in rented premises.
I don’t wish to give the impression that my ideas are correct. You have to work out the strategy yourself.
Again, good luck,
Kum YinHi Katz,
A good book to get you started is:
“How Investing in Commercial Property Really Works”
By Martin Roth & Chris Lang
Publisher Wrightbooks,2005There are also lots of posts on this forum so why not try doing a Search from the Forum menu.
AmandaBS
http://www.propertydivas.com.au
FREE online Property Resources“It is better to be inconspicuously wealthy, than to be ostentatiously poor…”
Thanks to all of you for your comments.
Kum, You mentioned us occupying the premises and that you always rented for your business. I do intend on using the rent as an expense to our business .
We are looking at the option of possibly leasing the new premises to onother company as We are paying less where we are currently than what we are able to get in the new location.
Once again This forum is great. Have learnt so much just through reading the posts.
katz
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