Gain More by Investing in Commercial Property Today!

02 Apr, 2014

When thinking about property investment most people usually think residential real estate, often giving little or no thought to commercial property.

According to an article in www.realcommercial.com.au earlier this year a rising number of everyday Australians are recognising the potential of the commercial property sector and are cashing in.

One benefit of investing in commercial property is that it is characterised by longer lease agreements than residential property – typically three, five or 10 years with the added benefit of the tenant meeting the cost of all outgoings.

Additionally, commercial tenants will commonly take better care of a property, guaranteeing it is kept and presentable.

Let’s break it down for you!

Residential property investment:

No GST applies to property purchase
Rental returns are generally 3-4%
Outgoings are all paid by the owner
The owner is responsible for fair wear and tear which applies to carpets, walls and appliances,
Potential cost and risk of damage by a tenant could be higher

Commercial property investment:

Purchase cost GST is claimable
Rent received is generally 6-8% of purchase cost, with no other costs to pay
All outgoings are paid by the tenant, including water rates and usage, land rate, maintenance, landscaping, managing agents fees, land tax and insurance
The property will generally be leased for 3-5 years
The tenant must leave the property as it was when they moved in and is all at the tenants expense
Bank guarantees, personal guarantees and cash can be held as bonds
All professionally written legal leasing contracts are used and paid for by the tenant
Great tax benefits if purchased through your Self-Managed Super Fund (speak to your financial adviser if this is applicable to you)

If you have been considering investing in property, look no further than commercial investments options, contact Adam Jupp at Rapid Tilt Construction today to discuss your commercial investment building requirements.