Vendor contracting his tenant into a mandatory savings plan. This strategy overcomes one of the main disadvantages of vendor financing and installment contracts, as the sale of the property does not take place until the option is actually exercised by the tenant and funds are exchanged...
Rent to Buy or Lease Purchasing Contracts Rent to buy or lease purchasing is contracting to rent a property at an agreed price with a premium paid over and above the normal rental which is called an ‘option fee’. This ‘option fee’ is accumulated over a...
Vendor Financing and Installment Contracts Vendor financing is when the property is physically sold to the purchaser at the time of settlement of the property, even though (at that time) only a small amount of money has actually changed hands. Additional to the sale and purchase...
Wrapping Wrapping comes in a number of forms. The strategy has originated in America and been adapted to suit Australian laws and culture. Wrapping is also known as: Vendor financing and installment Rent to buy or lease Lease option Technically, this type of purchasing is a little different...
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...
Percentage Split on Commercial Property When you look at commercial property and you are looking at buying a piece of commercial property that is a cash positive, look at the percentage split. Your percentage split basically is the cap rate or the yield that you are getting...
Commercial and Industrial Commercial or industrial investing is seen as the investment for the hardened investor and not something for a beginner. While in the most part I agree with the philosophy, the principles for investing in commercial or industrial property are the same as investing...
Break-Even Vacancy Factor When a property has a number of different tenants, your risk of having a vacant property is greatly reduced. You can work out what your breakeven point vacancy factor is. For example, if you buy a block of six units for $450,000 and each...
Higher Yield – Lower Risk When a property has multiple tenants and therefore multiple income sources, the return from the property is usually higher than having a single tenant dwelling. The cost of purchasing the property is usually not proportionately higher and the outgoings to maintain...
Multiple Incomes - Commercial In the commercial market, examples of multiple income stream properties would be a number of warehouses or strip complexes (that’s a row of shops, not a strip club!) rented out to different tenants. Shopping centres, office complexes and storage sheds are also examples...