Why would you want to make a million dollar investment in commercial properties if you can make a less expensive investment? Real estate investors who are ignoring commercial properties for making an investment are actually missing a lot of opportunities, such as higher rental yields than can be earned in comparison to yields from residential properties.
Such opportunities are attractive for people who live off investment income, like retirees. But the problem is that most of the people believe that investing in commercial property is too much of hard work and also very expensive. But the truth is that there are ways to get into the commercial real estate investment without making an expensive investment. Let’s see how that can be done.
#1 Australian Real Estate Investment Trust
One of the easiest ways to invest in commercial property in Australia without having to spend millions is to buy an Australian real estate investment trust, also known as A-REIT, or you can buy a real estate exchange traded fund (ETF) on the ASX. This way you only have to spend $500. But the problem is that the property investments that are listed on the ASX are always affected by the volatility of the share market because they are not direct real estate investments. However, you can get a direct exposure if you invest in unlisted funds. Doing so might not be as easy as it was with A-REITs and you will also have to outlay a larger sum of money, ranging from $10,000 to $50,000.
#2 You Can Co-Invest with the Other Professionals
This is an option available for investors seeking out opportunities for making a passive investment in commercial property. You can seek out other professional investors and groups that have proven track records of sound dealings. This is one of the best ways of investing in commercial property because it gives the investors an ability to reduce the risk because you team up with some of the tested veterans.
#3 Professional Advice
The chairman of Property Investment Professionals of Australia, Ben Kingsley, said commercial property investment is the domain of more sophisticated real estate investors. But he also said that small investors can also still benefit from the same commercial property investing if they really know what they’re doing. It means that small investors also have a chance of investing in commercial property if they seek the counsel of expert professionals. For further details, you can visit stamfordcapital.com.au.
#4 Finding the Right Property
You can always buy a shop or an office directly often at a cost far less than the cost of a private or residential property. For that, you would have to hire an experienced lawyer who’s familiar with commercial real estate investment and commercial property leases.
If you invest in a commercial property through one of these ways, the chances are you will earn great profits. It’s because, with commercial leases, tenants have to make the property fit for their use and for that they have to add value to the property which benefits the landlord financially. Also, with commercial properties, the rental yields are high and the leases are longer.