Are you considering a Commercial Property Investment?

Understanding a commercial property investment.

Do you ever wonder what's involved with commercial property or how it differs from a residential investment? There are many different variables and things to consider when deciding to enter the market.

Commercial property is certainly an investment worthy of consideration. However, it is not for everyone. There is a requirement for equity in the range of 20-30% of the value of the property, which is significantly higher than a residential investment and this can be a barrier for some.

The advantage of a commercial property is the greater cashflow. Borrowings at the moment are low, however, returns for commercial investments are around 6%. This means the investments are positively geared and offer a good return. The astute investor will know that the higher return is a reflection of risk: the higher the capitalisation rate the greater the risk. The risk is not for everyone especially if you are close to your retirement and want to minimise your risk.

If you are considering a commercial property investment in Western Australia, our Sales Agents would be happy to answer any questions that you may have and can guide you through the process.

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