If you’re looking for a way to supplement your income, you may want to consider investing in a commercial rental property. It’s also a good way to build your wealth, as you get to earn on rental fees and, at the same time, pay your mortgage without any out-of-pocket expenses. However, you also need to take note that rental property investments are not always a sure thing.
Here are some things you need to consider when looking for a commercial real estate for sale.
When looking for a commercial rental property, you need to check the condition of the property as thoroughly as possible. Make sure to check the flooring, roofing, fixtures, and the overall structural integrity of the property. This will help reduce your headaches later on.
Mortgage interest rates
Unless you have a lot of money lying around, you’ll need to borrow money so you can invest in a commercial property. While the cost of borrowing money may seem cheap now, you need to consider the mortgage interest rates. Commercial investment properties generally have higher interest rates than conventional properties because they are considered as “more high risk”. That’s why you need to choose low mortgage payments that won’t eat a significant chunk of your monthly profit. Check Henzells for more details.
A rental property’s location plays a vital role in the success of your investment. So, you need to consider carefully the location of the property you want to invest in. Of course, commercial properties located in the capital are your first choice. But, properties in gentrified or transitioning areas are also an excellent option. In fact, you may even get a higher return on your investment in such areas because you can get a more reasonable mortgage for it.
So, if you find yourself squeezed out of the Sydney market, you still have other viable options. Central Coast, for example, is expected to see significant price growth figures in the coming years. Likewise, the neighborhood where the property is located will dictate what kind of tenants you will attract. So, if you buy a rental property near a school, you’re tenants will mostly be students—and you may find it hard to find tenants when students are on their school vacation.
Another thing to consider when investing in a commercial rental property is the taxes that you need to pay. Property taxes will vary depending on the location of the property. It’s important that you are aware of how much you need to pay, so you know how much you will be losing in profit. While it’s okay to pay for high property taxes in a great neighborhood that attracts long-term tenants, there are also terrible places with high taxes. Another thing to note is that towns in financial distress are more likely to increase taxes far beyond what you can charge in rent. So, you also need to find out if property tax increases are likely to happen in the future.
The team of professional property consultants at Henzells Agency can help you select the perfect property based on your requirements. They can also help you find the best commercial real estate for lease Central Coast has to offer.