5 Perks of Owning Commercial Properties

Whether it is for investment or your own business, there are benefits in getting yourself a commercial property here in Australia, following up on our last post, where we spoke about financing a commercial property here.

Here are five benefits/advantages of buying commercial property.

1. Income Potential

The income potential of commercial properties is significantly higher at 6 to 10% compared to 3 to 5% for residential. As the tenants for commercial properties are businesses, they are expected to be able to afford the higher rent.

2. Longer lease terms

Suppose a business is doing well, and your property is in a good location. In that case, it will be guaranteed rental income for many years. When a tenant is found, the lease terms for a commercial property are generally five years or more, with a minimum of three years.

3. Tenants pay ongoing maintenance costs

Commercial properties can be positively geared due to lower maintenance and higher yield. Residential properties require the landlord to fix any maintenance issues; commercial properties need the tenant to pay for all ongoing maintenance costs, council/water rates and any renovation.

4. Tax Benefits

As the commercial property ages, the building’s assets and structure are subject to wear and tear. The Australian Tax Office will allow commercial property owners to claim depreciation as tax deductions if the property is used to generate income.

5. Inflation Proof

Most leases are adjusted according to the consumer price index, increasing your rental income. Thus inflation proves your rental income.

Suppose you are interested in financing a commercial property. Speak to us for a free consultation below.