10 Reasons Why Investors Prefer Commercial Properties Over Residential

Investors, sick of stock market fluctuations, are looking favourably towards property investment more than ever. While many start their portfolio with a residential purchase, those educating themselves on the upside of commercial are really seeing the advantages. Here are just a few reasons why you should consider investing in a commercial property:

  1. Commercial investments typically offer higher cash flow and are usually positively geared.
  2. Unlike residential, a commercial property is usually valued based on its income capacity.
  3. Potential to pay off the property faster due to higher returns. The additional equity could be used to purchase other property.
  4. Often have longer leases (3 – 5 years) with additional option periods.
  5. Smart property investors are looking for properties that they can add value to such as improving the fit-out,  splitting tenancies, creating share offices, installing billboards, etc.
  6. Investors can obtain depreciation benefits from installing fit-outs.
  7. Tangible investment: an asset that can be seen, touched, unlike stocks.
  8. Outgoings are often paid by the Tenant (Net lease).
  9. Some tenants will modify your property at their own costs; adding value to your property but you have the right to ask them to return the property to the way it was handed over to them.
  10. Compounding rent increases are usually written into the contact.

There are so many more things to consider about property investment, and why a commercial property might be the best choice for your financial portfolio. Want to find out more about property investment? Contact the Modo Property team on (03) 9817 6222 or by email at info@modoproperty.com.au for an obligation-free conversation about your real estate plans.

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