All Topics / Commercial Property / Problems when buying commercial Property in Canberra due to Covid-19 Situation

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  • Profile photo of Alison DuffyAlison Duffy
    Participant
    @alisonduffy
    Join Date: 2020
    Post Count: 2

    Hello guys,

    I am Alison Duffy living in Canberra. Recently I have finished college study, now I want to run a real estate business in Australian capital territory. But due to Covid-19 Pandemic circumstances what problems can I face when buying a property in Canberra. Can anyone share information regarding taxes and duties? Need your help seriously friends?

    Alison Duffy | Canberra Property Solutions
    https://www.canberrapropertysolutions.com.au/
    Email Me | Phone Me

    Profile photo of David HallDavid Hall
    Participant
    @wiggles2
    Join Date: 2014
    Post Count: 66

    Hi Alison,

    If you are looking to purchase a commercial property, you can expect to encounter significant problems financing you building purchase.  Due to Covid 19, I have seen banks decline a few commercial deals, despite good serviceability.  Added to this you have an unproven business with no financials.  Borrowing will be very difficult.

    If you have cash, there is going to be some sensational buying opportunities in 6 months time.  For example I have my eye on a light commercial property that is listed for $900k, which I am confident I can get for the high 300’s in a few more months time.  The location is sensational, the building isn’t.

    On the positive there is about to be a lot of commercial leasing opportunities come up, with some great rents and incentives.

     

    I hope this helps

    David Hall | Momentum Wealth
    http://www.momentumwealth.com.au/
    Email Me | Phone Me

    Buyers Agent

    Profile photo of Steve McKnightSteve McKnight
    Keymaster
    @stevemcknight
    Join Date: 2001
    Post Count: 1,763

    Yes, aside from financing (liquidity for commercial property is drying up), you need to assess a tenant’s ability to (1) pay the rent, and (2) pay the outgoings, and (3) survive post pandemic.

    Given commercial property is mainly about income, the quality of the tenant and their ability to pay is a real risk.

    It is likely that commercial property rents will decrease post pandemic given given vacancies are likely to increase, so be aware of that.

    – Steve

    Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
    https://www.propertyinvesting.com

    Success comes from doing things differently

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