For most people looking to make some money in the property market the obvious place to play in in residential letting. In essence, it is close to home. It is what you know, and it is where you live. But there are lots of people who play in this space and it is quite crowded and competitive. For the slightly braver the focus may turn to commercial property. A little bit of research shows that demand is good, and that rental is higher than they are with residential. The capital outlay is usually more but if the return is better than it starts to make sense quickly. So, if you are thinking about making a play in the commercial space, good luck. Here are a few things that you might want to consider before setting out.
The goal of commercial properties is always to sign long term leases. Realistically it should be three years or longer. The reason for this is that it provides you as the landlord with security, but it also means that if you have to refurbish or make upgrades to space before the tenants move in, that the costs are worth it. Most tenants will want the space laid out and kitted to their specific requirements. To this end, you will need to partner with one of the many commercial fit out companies Brisbane has working its greater metropolitan area. If you are not in Brisbane, then you will find similar companies in all the other major Australia cities. The point here is that you want happy tenants and you want to be able to supply them with something that meets their specific needs.
When letting residential properties, the onus to perform maintenance usually falls on the tenant. With commercial property, especially when there are multiple tenants in the building, that responsibility falls to the landlord, and it can be that there is quite a lot of upkeep that needs to be done. It is probably best to budget for a janitor or a caretaker to look after the facilities – somebody who is there all day, who can make sure that the tenants are behaving properly and that any glitches or issues are fixed quickly. In short, somebody with a bit of initiative, some DIY skills and who you can trust.
All about location
As with residential property, the commercial property also requires that the building is in the right location. Before shelling out and buying something, make sure that you have done your research. What is the demand in the area? Who is moving in and who is moving out? Who are your neighbours? What is parking like? These are major concerns. It is one thing ending up with a residential property that you cannot rent, but the commercial is another ball game altogether. You will always be able to find a solution for the former, the latter can be tricky in times of recession or if the area is deemed undesirable for business purposes.