BradParticipant@baustin76Join Date: 2017Post Count: 2
I’m currently doing some due diligence on a potential commercial property deal (it will be my first one!).
I’m looking for guidance on where I can find information on the average yield for a suburb so I can work out an approximate valuation to determine if it’s worth pursuing any further.
I’ve done research on property websites and good old Google, but there is limited information available.
Any help will be appreciated.
BradCorey BattParticipant@cjaysaJoin Date: 2012Post Count: 1,010
An average yield for a commercial property in a suburb isn’t exactly going to be accurate – rental averages will vary widely dependent on type of property, size etc.
Commercial property is benchmarked on $/sqm – if you look at the listings available this should give you a good indication. Likewise speaking with a commercial property manager they should give you some numbers.staceymacParticipant@staceymacJoin Date: 2012Post Count: 14
yeah it isnt the same as just looking up rpdata or similar is it. It would be good if there was a rough guide somewhere though. Is there anything out there at all I wonder?BenParticipant@benmstarlinesecurityJoin Date: 2015Post Count: 14
Buying your first CP is a big step.
You will generally hear leases priced in per square mtr. eg $100/m2 So if the building is 300m2 your rent will be $30,000 pa + outgoings (outgoings are body corp fees, rates etc).
After doing research on sales price history of the one you are looking at and also many others nearby and the info you get from your real estate agent sounds promising, I would suggest you do some legwork.
Get out of from behind your computer, drive around the area for a day. Count the number of for sale/lease signs up VS leased properties. Ring the agents and ask what the vacant properties are asking for and then discount this by at least 10%. Then walk into businesses currently renting in the area and ask the business owners what they are paying for their lease. This will give you a better idea of what the lease rates actually are. Ask the local business owners how long the vacant ones have been vacant for. It’s amazing how business owners are often happy to chat…at least for a little while. And you’ll get valuable info on the area at the same time.
In the end it is up to you to judge your risk profile and decide if the asking price is reasonable and how much you would expect to get from owning the property each year if things go well but also how much you will have to find if the CP is vacant for an extended period and how likely this may be.
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