If you’re searching for a commercial property for sale, you can browse our wide array of listings to find the perfect deal.
If you’re not looking to buy at the moment, you can also search for a commercial property for rent. Commercial property investment is also a popular option for those interested in real estate.
Commercial real estate is a catch-all phrase that refers to a variety of commercial real estate. Commercial real estate, in general, is intended for business usage. Commercial properties can generally be divided as such:
- Offices
- Apartment complexes
- Retail (shopping centres individual shops, etc.)
- Special purpose ( churches, hotels, gyms, etc.)
- Commercial real estate is attractive to investors because they can produce multiple streams of income. The problem with a residential property is tenant vacancy, which can completely halt your income stream. Commercial properties on the other hand can have multiple streams of income from one physical location, which hedges your risk.
- Commercial real estate can also offer higher rates of return and higher total returns, depending on the size of the property.
- Commercial real estate has different types of leases than residential real estate. There are a few commercial real estate leases that put the responsibility of paying property taxes, insurance, and maintenance for the property on the tenants. Potentially high costs can be passed on to the tenant, allowing greater returns for the commercial real estate owner.
Potentially high costs can be passed on to the tenant, allowing greater returns for the commercial real estate owner.
It should be noted that commercial real estate investment is not typically a beginner endeavour. Not only is there a steeper learning curve, but the higher costs for commercial real estate can be off-putting for new investors. Higher property costs equates to higher entry capital. Deposits are larger, bank loans are harder to secure, and potential losses can be higher too.
Retail Investments
Choose a location with good traffic flow from all directions and an excellent view of the street for optimum exposure. It’s critical to have easy access to ample parking that may be seen and accessed from the road.
Shopping centres with permanent traffic sources, such as supermarkets, are also a good idea.
Look for good lease covenants with lengthy terms in place and long-standing tenants that are ready to renew their leases. Zoning, including the potential for future property expansion, is also worth considering.
It’s also a good idea to search for competition and the amount of unemployed people in the region you’re considering. There is an increased chance of future vacancy if there is a lot of vacant space nearby.
Office Investments
Commercial real estate has long been a popular choice for novice investors. Although commercial properties have all of the inherent advantages that the real estate market offers (steady income stream, tax benefits, long-term financial security, etc.), they still offer a certain degree of volatility, which can result in high profits. Commercial properties are more closely tied to the movements of the wider market, which always needs to be monitored by the investor. The local economy can dictate if your property will be profitable, or take losses.
Industrial Investments
Infill regions and established precincts with nearby amenities such as transport and road connections, infrastructure projects, residential communities, business parks, and shopping malls should guarantee that your investment will have a good chance of filling if it becomes vacant.
Another factor to consider is the availability of full-height roller-door access, as well as suitable heavy vehicle accessibility and the amount of vacant area in the region for a comparable product.
Risks
- When looking at a home as an investment, you must first comprehend what it is worth to potential renters. Expecting more than market rate might result in your property remaining vacant for months or even years, which will cost you a lot of money.
- As well, being somewhat flexible about your rental needs will be beneficial to you. It's usually more advantageous to get a high-quality renter right now for 10 percent less than what you would pay in the future.
- Even if your minimum rental agreements are modest, there's a chance your business premises will go empty for weeks, months, or even years if it has unusual characteristics or limitations. Consider that larger commercial buildings will be more challenging to lease.
Even so, make sure you have a buffer to cover costs while you look for a suitable renter. And, to attract that tenant, make sure you invest in a good marketing effort and a local expert commercial property agent. It’s possible that renovating a commercial property will be more expensive than upgrading a home, however the continuing maintenance and upkeep fees are typically lower, depending on the asset’s size and function. When a property is significantly older and the fitout is worn and in need of a substantial renovation or refit, landlords must think about whether it’s worth it.
However, any improvements made by the landlord (non-structural and usually cosmetic in nature) may be required to be repeated by the tenant if a suitable make-good provision is agreed.
There may be more competitors if there are many comparable properties on the market in the same area or large building projects imply that commercial property supply is about to rise.
This may jeopardise the security of your existing tenant, who is being enticed by newer properties or cheaper rents, and make it more difficult to locate a renter that will pay what you require.
- However, any improvements made by the landlord (non-structural and usually cosmetic in nature) may be required to be repeated by the tenant if a suitable make-good provision is agreed.
- There may be more competitors if there are many comparable properties on the market in the same area or large building projects imply that commercial property supply is about to rise.
- This may jeopardise the security of your existing tenant, who is being enticed by newer properties or cheaper rents, and make it more difficult to locate a renter that will pay what you require.