Commercial property

As investment advisors will tell you, diversification is a sound principle for reducing risks in your investment portfolio. Owning commercial and residential property is one option.

Commercial property generally includes office space, business parks, individual retail stores, supermarkets, shopping centres, warehouses, industrial estates, hotels, cinemas or any other type of land or structure developed for business use.

It can be a great way to diversify your residential portfolio, build wealth and save tax, however it also requires in-depth research to understand the risks and returns.

While the basic principals are the same as residential investments, there are important differences.

You’ll generally receive much higher income as a commercial landlord, but costs are much higher as well. Usually the owner has full responsibility for the cost of outgoings such as building maintenance, lifts, air-conditioning, insurance and more. There is also the vacancy risk to consider. If tenants move out the owner is left covering the high outgoings.

As always, a thorough understanding of the issues involved is needed before investing. If commercial property investment makes sense for you, Property Results can help you find the right property to meet your objectives.