1. Possible Higher yields
Residential property normally yields 3 -5 %
In commercial property we can see yields over 6% up to 12%
2. Long term leases (set and forget)
This means income streams can be more stable.
It is not uncommon to see tenants sign leases for 3 years, with some longer leases going 10 and 15 years
3. Smaller Deposits
This is not what you would normally expect, however small commercial properties in metro areas can be bought for less than $200,000. Compare this to the minimum residential prices
4. Tenants during business hours
Most businesses are run during office hours so it would rare to get a call from a property manager on a weekend
5. You get an asset which is tangible (you can touch it)
When you buy a commercial property, it has a replacement value. It is a building.
6. The tenants pays the outgoings
With may leases the tenant pays all the outgoings.
7. Direct Investment Control
With shares you have an investment controlled by someone else. With property you have a direct investment which you control.
8. Leverage
The property can be financed to create higher returns. In some cases it can go to 80% of purchase price.
9. Public eye
Most tenants are running businesses and so it is important to have a good public image which includes their work place
10. Low Interest rates
With interest rates very low, some tenants are paying more rent than the loan repayments, so the properties can be positive
Commercial Warehouse "Your door to Wealth"