Commercial or Residential, Which is the Better Investment?

By Manny Galanos November 15, 2017

Commercial Property or Residential Real Estate.jpg

When considering investing in property, many immediately turn to residential options and entirely overlook commercial property. This is probably because residential property is so familiar to us, we are comfortable with it and most would feel they have a better understanding of the residential market.

Commercial property is complex, but with the right advice and proper management, it is likely to provide much better returns on your investment.

The benefits of Commercial Property Investment

• Achieve immediate rental income returns of up to 10% plus capital growth;

• Commercial Leases are typically more balanced to be in favour of both parties;

• Commercial Lease terms typically start at a minimum of 3 years plus Options;

• Longer Lease terms equal less loss of rent from vacancies and less re-leasing costs including advertising expenses and Agents fees;

• Commercial Leases typically include provision for automatic annual rental increases;

• Land holding costs (outgoings) such as rates and taxes are typically paid by the tenant;

• Debt funding allows you greater control over your level of risk versus return;

Commercial is less emotional, there are typically fewer tenancy problems and lower tenant turnover. Thinking of investing in commercial properties? Contact us today and let us know how we can help you.

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Manny Galanos

Written by Manny Galanos

Manny is a fully Licensed Estate Agent and Auctioneer with a Bachelor of Economics from Monash University. He is also an Associate of the Australian Property Institute.

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