New to Property Chat & new to real estate investing, sussing out strata tittle office spaces.

Discussion in 'What to buy' started by some-guy, 29th Oct, 2019.

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  1. some-guy

    some-guy Member

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    Melbourne
    I am very new to property investment, I own the property I live in as well as a couple of ETFS. I was considering taking on a small and cheap strata tiled office as an investment. I'm not specifically aiming to purchase the property's I have listed below. I've just included them as an example of what I'm considering. My questions are:

    Is a 12 or 24 month lease a deal breaker in the commercial real estate investing world?
    Are these types of property's worth while, or should I really just stick to REITS?
    Overall do you think any of the properties I have listed below could present a good investment opportunity?

    1019/1 Queens Rd, Melbourne, VIC 3004 - Office For Sale - realcommercial

    Suite 519, 1 Queens Road, Melbourne, VIC 3004 - Office For Sale - realcommercial

    620/1 Queens Rd, Melbourne, VIC 3004 - Office For Sale - realcommercial

    808/1 Queens Road, Melbourne, VIC 3000 - Office For Sale - realcommercial
     
  2. Scott No Mates

    Scott No Mates Well-Known Member

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    The first red flag, without even clicking on the links, is that there are 4 suites in the same building up for sale. How will this be when it comes to leasing & vacancies?
     
    Brady likes this.
  3. Momentum

    Momentum Well-Known Member

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    Collins St, Melbourne
    If your budget is only 50-100k then you'd be better off sticking it into a REIT and doing without the hassles of ownership.
     
    Jess Peletier likes this.
  4. Jess Peletier

    Jess Peletier Mortgages, Finance & Property Strategy Aust Wide Business Member

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    What's the vacancy rate like for those types of properties?

    What's attracted you to these?

    Commercial INV is a bit more complex than resi, - do you have someone helping you, or are you winging it?
     
  5. some-guy

    some-guy Member

    Joined:
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    Location:
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    At this stage no ones helping me, not sure if I wanted to give investing directly in commercial real estate a go yet. At this point I'm just trying to suss out if it's even worth bothering to look into, at these price points. At the moment I currently have my own apartment with mortgage that I own and live in, I have a high amount of equity in this place.

    I also have some etfs:

    WDIV: Fund Details - ETF Watch
    VHY: Fund Details - ETF Watch
    PLUS: Fund Details - ETF Watch

    The aim is to build long term income, I'm looking at expanding beyond just shares and bonds. I'm at the point where I'm trying to decide if direct commercial property is worth having a closer look at, or do I decide to go for REITS instead.
     
  6. Trainee

    Trainee Well-Known Member

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    To build long term income, maybe you have to build capital first.

    if you have a couple hundred k, income wont do much for you. But build it to a couple mil and then put it into yield products?
     
    Sue Huang and some-guy like this.
  7. some-guy

    some-guy Member

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    All my ETFs are set up to use DRP, I intend to keep on adding to them as well. Once I get the apartment paid off I would go all out in throwing everything at the ETFs, possibly other investments as well. I was looking into purchasing a small office suite, then redirecting all that income into the ETFs. At 28 years old I'm banking on the power of compounding over time .
     
  8. Trainee

    Trainee Well-Known Member

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    The question is should you also consider leverage?
     
  9. some-guy

    some-guy Member

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    That's a good point, I tend to be a wary of leverage. Even though I still invest elsewhere whilst having a mortgage, it is just a single loan. My mortgage isn't that big and I always pay extra.
     
  10. Trainee

    Trainee Well-Known Member

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    Do the sums. But realistically, what happens later if you have a family? You might want a bigger (read more expensive) place. The excess cash might disappear as the kids grow.

    when would be the safest time to use leverage for investing? One can argue when you are young.
     

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