06 Nov 2017

Multiple Stream Income Commercial Property

One of my clients only purchases small shopping centres. After many years of investing experience, he’s come to the conclusion that small shopping centres present the least risk, the least hassle and the highest yielding investment for him.

Of course, as with any kind of commercial purchasing, it is usually the tenants who are responsible for the outgoings on the buildings and this substantially reduces the overheads for the investor.

Outgoings include costs associated with maintaining and operating the property like rates, body corporate, operational maintenance and general presentation of the property grounds via landscaping and lawn mowing.

Commercial property also has the added advantage of long leases, with either Director’s Guarantees or Tenancy Guarantees to back up the payment of rent for the term of the lease contract.

In most cases, lease agreements also have built-in rent increases which can be linked to inflation or CPI (Consumer Price Index), or have a fixed percentage increase per annum.

Commercial properties with a good, strong yield are more prevalent in larger towns and cities where the growth rate is usually better than in regional areas.

Commercial investing allows you to be more creative as a landlord and with the building itself.

We always recommend that you seek professional advice as this blog is for general information only