The Real Estate Institute of Western Australia is well known for its work and advocacy around the residential property sector, but what isn't as well known is that we also represent agents in the commercial property sector.
Commercial property is big business in WA, especially with the state economy growing so strongly on the back of resources and population growth. Commercial property can be anything from offices, retail space, showrooms, warehouses, factories and specialist locations such as hairdressing salons, veterinary surgeries, li'r stores and more.
Demand for commercial property has rarely been stronger or vacancy rates for commercial leases tighter. The next 12 to 18 months should see continuing interest in this market. This has prompted many investors to turn to commercial property for opportunities in much greater numbers than before, especially now that the residential housing market has softened.
More investors, including 'mum and dad' investors are now looking seriously at commercial property for the first time, and financial planners have a better understanding of this market; offering more sophisticated advice to those looking to borrow money to buy into it.
Premium commercial properties in Perth's CBD are being snapped up so quickly there is little need to advertise them, as waiting lists for clients are already long. Even the more modest 'A', 'B', and 'C' type commercial properties in the city are in hot demand.
Despite the perception, the vast amount of commercial property is not in the city but out in the suburbs. Overwhelmingly, commercial property is to be found in strip shopping, suburban shopping complexes and the industrial areas which surround the city from Malaga, through to Bayswater, Kewdale, Welshpool, Willeton and beyond.
So, what are the particular advantages to investing in commercial property?
For a start, there are often greater returns on your investment. All of the outgoing costs including water, council rates, land tax and any maintenance costs are paid by the tenant, which for many investors offers a greater incentive than investment in residential property.
The other advantage is stronger yields. Many suburban commercial properties are modestly priced, but can yield strong returns with rental income. When you consider all of the outgoing costs are paid for by the tenant, this rent is money straight into your pre-tax pocket.
Commercial properties for sale and a list of REIWA members who sell them can be found on reiwa.com. Commercial agents who are REIWA members find that their association with us gives buyers greater trust and confidence.
If you are thinking of buying commercial property, it's important that you get competent financial advice from your lender and talk to qualified commercial agents about prospects in the market.
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