Should you finance your retirement with commercial property? Is it a viable option? Find out what makes commercial investments great in our latest blog.
Property investment is a popular way for Australians’ to boost their passive income and start preparing for retirement. Most of us invest in residential property because we feel safer with what we may be familiar with and know. But commercial property is just as viable an investment. Here’s why you should consider adding a commercial property to your portfolio when thinking about how to finance your retirement.
What counts as a commercial space?
When we think of commercial properties, many of us imagine factories and industrial spaces. But a commercial property can be any kind of property where the sole purpose is not for private living. This includes; car parks, restaurants, office spaces, medical facilities and even hotels.
Why do people avoid commercial property?
A main reason people avoid investing in commercial property is because they view it as a riskier investment. A lack of understanding of the commercial space can present this issue and it is easily fixed with research. Research is especially important if you’re considering property to finance your retirement.
Investing in commercial property there are some financial considerations such as a larger upfront investment to purchase a commercial property. You need a 30% deposit and loans are typically shorter; lasting from 2-15 years as opposed to 30 years for residential property. These factors don’t objectively make commercial property a bad investment. You just require more financial planning and research to succeed in the market.
Benefits of a commercial property investment
• Longer leases: running from 3-10 years means you’ll have a stable income once a tenant is in place
• Higher returns: larger spaces like offices have a higher potential for rental income
• Fast turnaround: finding an established property with existing tenants means you can save on the setup costs
• Low expenses: most utilities, maintenance and council rates are paid by the tenant in commercial property which means less ongoing costs for the landlord
Location: an important factor for any investment
A great location is essential for every property investment. When it comes to commercial locations, there are a few must-haves on the list. First, easy access – either by public transport or ample car parking for both staff and guests. Second, generous amenities such as restaurants/cafes, supermarkets and retail in the area. Finally, you want to be visible. Being in a high-traffic area by car or foot means incidental advertising for any business that uses the space.
There are many choices to finance your retirement and commercial property is one option for you to explore.
Find your ideal commercial property
With more than 30 years of experience in property development, Norm Carey knows how to develop a perfect commercial investment. Our new project, the Woodvale Medical & Professional Centre, has every ideal feature for a commercial property. There’s high visibility, ample parking, a shopping centre nearby and plenty of public transport in the area.
Enquire today to grow your commercial investment portfolio.