Why Commercial ?

It seems that you haven’t missed it out.

 

Thanks for posting your experiences.

What sorts of small commercial properties would you suggest a beginner look into ?

Congratulations on your success !

 

Small tradesmen units

 

They're a dime a dozen. When vacancy rates climb, you're at the front of the queue. Small tradies are just as reliable as residential tenants IMHO, i'd much rather a larger tenant who has more at stake.

 

Yes , but this may may be out of reach for a beginner . What about an office in a reasonable location or a smaller warehouse .

What things should I look for in a tradesman unit ? I imagine good truck access and door height and service availability would be at the top of the list ?

 

• Clearance for trucks
• 3 phase power/NBN
• Amenities (own toilet/wash facilities/tearoom)
• Office space about 10-15% of floorspace but preferably on mezzanine level
• Good natural lighting (& LED high bays)
• Good access from street (If it's a unit, you can manoeuvre a long rigid truck or articulated vehicle into the premises
• Depth - long enough to fit a semi & prime mover
• Column free space
• High roof to maximise storage/racking

 

• Reasonable strata levies
• External signage opportunities
• Close to lift/entry
• Natural light/windows
• Fibre access or NBN FTTP
• Shared toilets but own tea room/access to water/drainage

 

Thanks for posting .

 

What do you think about this property? They claim that it's a 7.8% Net return.
112-118 Musgrave Street, Berserker, QLD 4701 - Retail for sale - Lease.com.au

 

@ousinit said: ↑
What things should I look for in a tradesman unit ?

How many tradies could afford [or need] the above? ...

 

Not a one woman/man band (those inclusions are for units >150m2) anything much smaller could work out of a double garage at home without incurring the overhead.

Once you start employing (or sub-contracting/deemed employees), these things become a requirement.

 

Did you buy the property ?

 

cpi rental increases. yuck!

 

Yeah why still commercial now with yield getting so tight these days?
Attended a Box Hill retail shop auction last week and it sold for 3.5% yield!!!
Where can you still find 10% yield or whatever the magic number may be to make your servicing
unimpacted for the next deal?

 

Bullamakanka. Regional area, owner occupied/lease-back, high risk, selling for land value only, severely dilapidated/functionally obsolescent buildings.

Once you redevelop, your capital value will increase and your net return will drop.

 

Hi Beano, I've been reading your posts, thanks for sharing your experiences. I'm in the commercial property industry but have no CIPs yet, but have 11 RIPs and wondering when I should buy a CIP. I'd really like to do some analysis on the numbers for CIPs. I wondered if you could share this spreadsheet? Would probably benefit a lot of members to see one based on realistic assumptions (ie buying a property with 3-5yr lease at 65% LVR, needing to reduce to 40-50% by end of lease, 3.25-3.5% increases, 3-6 months vacancy, leasing fee plus some incentive and capital works upon lease expiry). A lot of people get blinded by high net returns but it's good to see the total return over say 10 years).

Thanks!

 

Pm me and I send you a couple of industrial properties my mate brought.
They yield from 11.5 to 18pc net he is working towards 21pc.
Just bear in mind I do not walk the talk on the buying but I still have every commercial I have brought while still mismanaging & making mistakes (however i seldom make the same mistake I just invent & find new mistakes or items to mismanage )
I have been focusing on something different ie lessors interest but they do not come up very often .
They are out there but just that people do not often sell and I only have a lifetime to buy them.

 

Hi Beano

Are you much into retail properties (C1Z) at all or mostly industrial?
What's your view & opinion on the Victoria retail segment for next 5 yrs??
Is food & beverage tenant the more preferred type to go with?

Thanks,;
FXD

 

I am mainly in industrial very little retail ($300k pa rental from retail).
I am not too familiar with the Vic market.
Have you talked with any Valuers or researcher in the Victoria area ?

 

Various commercial sales
Yield 8.58pc Daycare centre , 8.09pc NAB branch , Caltex service station 8.33pc
courier mail Friday 9th August