Why Commercial ?

Question, I made a typo I just corrected.

 

I was being sarcastic about Rocky pls dont take it seriously.

one auction result site:
Auctions Live | Home

 

Probably over the last couple of decades 95% of the commercial properties would have been investment class that is worth investing in .

 

what does “investment grade” mean?

Does it mean property suitable for a positive return on your investment?

If so, then CIP is very similar to residential.. you just need to own things that people want. So when a tenant leaves, you have another lined up.

Whoever made that statement of 5% of CIP is worth it is obviously just saying that for the attention

 

Not that I'm aware of. There are categories that you would steer clear of though eg strata retail in shopping centres.

 

Wow. What a great thread. Plenty of great tips, stories, and insights here

I’ve been reading up on CIP lately, as it looks like an area I want to cut my teeth on after spending 10 years on the resi side.

I’ve found a site that I really like. The end game for this site is to use it for personal use. Basically treat it as a man cave for my boys and I. This would be a 15 year horizon.

Thus I would like to rent it out between now and the next 15 years. How is the barrier to entry like, in terms of finance especially? I’ve left my details with the agent to get a memorandum on the property, but so far what I found is the current owner is the occupier as well. I have a feeling he may be retiring so it would be a vacant possession. How do banks finance a commercial property when the WALE is **** given no lease for the interim. I would imagine this would also allow me to negotiate the price down to my advantage - if I can secure the finance

because long term this property will be for personal use, I’m happy to amortise the debt from day one. Do lenders off a long loan term? 15 years I imagine is achievable, but is there longer for commercial?

the property would be around the $700k purchase price, 151sqm for reference. Under $1m so no annual reviews also

 

Get a broker to walk you through the finance options.

Don't forget to allow for GST as an out of your pocket expense on top of the deposit and what the banks will lend.

 

Yeah if no lease then GST is payable.
While a personal use then GST can't be claimed

 

Theoretically, could have it leased to you then buy it as a going concern to avoid having to pay GST.

 

This is interesting.. has anyone else done this?

 

More than likely, cheers.

 

has anyone been looking into office spaces recently? With the boom in industrial cap rates are really squeezing and it's becoming much more difficult to find good value opportunities.

I am considering branching out and would love to know what insights people have of this space right now.

 

If you polish your crystal ball, will we see that smaller office space used as low density hubs will be more attractive (& provides a local escape from WFH) or will larger spaces such as serviced offices replace the traditional headoffice yet provide all of the access (but not reduction of exposure risks).

 

Reality to come?

Firms cut office space as workers go remote: RBA

 

this is an interesting one. anecdotally what i am hearing from my peers in the bigger corporate organisations (melb based) is that there is the shift to flexible arrangements being permanent however those in SMEs, while flexible are not looking to downsize. i know my organisation, a commercial construction company, has about ~15 office staff in our Melbourne office and only 12 seats and we are expanding. the general message has been people need to be on site or in the office with some flexibility but no plans to down size office space at all. could just be an industry thing though, we are pumping!

 

i am wondering whether office space above retail on busy high streets will still be in demand for SMEs like accountants, legal firms, architects, engineers. Think good locations with plenty of amenity.

 

Since your query the industrial property rental have averaged a sixty percent increase while the property have doubled.

 

Anecdotally, not seeing for lease signs popping up everywhere - vacancies are still tight especially in the sub-50m² shop-top & arcade offices above the retail strip.