If you are looking for constant cash flow, then commercial property can be a great investment. Generally, commercial properties, in the hands of a good property manager will give you excellent returns on your investment. In Australia, returns of 4% or 5% on the residential property investments are considered very good. In the commercial property market, investors can always look to very high rates of return on their investments, especially if it is in the hands of a professional manager such as commercial property LJ Hooker Brisbane manages. A good manager always equals a high level of efficiency as well as excellent rates of return on the investments.
With the retail property, you can look at annual rental returns in the region of 7% or 8% and this is the norm. With an excellent property manager, you can get even higher returns on your commercial property investments. The returns are particularly good with the industrial premises where annual rates of rental return of 10% are considered the norm.
There are various factors that will impact the rental return on your commercial property such as the quality of the building as well as its location. If you have a building that is managed by commercial property LJ Hooker Brisbane has, then you can always look forward to excellent returns on your retail property. While a higher annual rental return is a desirable outcome when it comes to commercial property management, there are various other advantages that you can also derive from these kinds of properties.
In the residential property investments, you are likely to grapple with numerous expenses. The property managers or landlord has to meet various costs such as the council rates, the property maintenance rates , insurance, property management fees, repairs on the property amongst many others. It is these many expenses which contribute to the low rates of return for this category of real estate investment. On average, up to 30% of the rental revenues will go towards the expenses of maintaining the property and catering for various other costs.
However, commercial property is not always a rosy investment at all times. Because of the high rates of return, there are also high risks associated with this category of asset. When it comes to the commercial properties, landlords and property managers have to grapple with the issue of risk. Whenever you lose a tenant on a residential property piece, it is likely going to take you a very short time to fill in the vacancy, typically one to two weeks. With commercial or industrial properties, it might take you a month or even years to find a tenant for your premises.
One of the primary reasons why many investors purchase residential properties is for the capital growth. They don’t necessarily do it for the rental return like in the commercial properties. A residential property is generally a great investment if you are looking for capital growth, something you can resell in the future at a higher price. However, commercial properties are typically for the cash flow.
Where should you start?
Look for commercial property LJ Hooker Brisbane service and set yourself on your journey to profitable property investments that will assure you of great yields.