The Negatives on Commercial Property
ECONOMIC CONDITIONS
When the economy is strong there is a generally a strong demand for commercial properties however when there’s an economic downturn, demand for commercial premises usually falls.
TENANT VACANCY
While commercial properties attract long-term leases, it can take longer to find a tenant. It’s not uncommon for commercial properties to have long vacancies, which means you will need to cover all the cost during this period.
SUPPLY
Changes in supply conditions can create potential problems for investors. An increase in new property coming on the market in the same area creates a threat to existing tenancies as tenants may look to upgrade or expand. Strong supply can also reduce potential yields.
INFRASTRUCTURE
While major infrastructure changes in the area can attract commercial investments there, it can also lure tenants away from existing areas and older commercial premises. This could result in your property becoming vacant.
VALUE
The value of commercial properties closely correlates with the lease on the property. If a commercial property becomes vacant, or the lease is about to expire, the value of the property would generally be expected to fall. In contrast, any price falls associated with residential properties are generally less dramatic and usually happen progressively over a longer period of time.
At Premium Lifestyle, the first part of our approach is to better understand your circumstances. Once we have an overall understanding of your financial situation, we will formulate a customized proposal to best meet your needs and goals.
Shaughan and his team are amazing and I refer them to as many of my friends and family as possible. The investment that they helped me with has worked out extremely well, I couldn't be happier with where it is at the moment. I can't say enough good things about the experts Shaughan referred me to - from Mortgage broker, to Property Management, everyone has been amazing. I will be using Shaughan for my next investment. I am more than happy to share more of my experiences with the Premium Lifestyle Group, and would be happy to take calls/emails with more specific questions/feedback.
Hey Shaughan Well we got our cheques from the ATO and have booked a trip to Hawaii for Christmas/New Year. I know this probably isn't in keeping with solid financial practice, but try talking us out of it! The property has been running on auto pilot with the agents you referred us to looking after it splendidly. All I do is update the numbers on a spreadsheet every month and when tax time comes fill in the forms and before you know it.... Aloha! A big thanks for all your energy and help in getting us into this position.
This is just a quick note to thankyou for patience and professionalism in regards to your organising of my financial matters. I am a huge advocate of your system as it has really changed the way I look at my life. I now realise my earning potential and have a positive outlook on my ability to achieve financial freedom. The plan you developed has created enormous relief over the last couple of months and for that i am incredibly grateful. I look forward to our next meeting to discuss further opportunities.
Any information in this website and the links provided are for general information only. It does not take into account your personal financial circumstances, needs and objectives. You should consider seeking specific advice in regards to your personal situation, from relevant licensed professionals, before proceeding with any strategy. Premium Holdings Pty Ltd is a licensed real estate company, specialising in property investment, with associations to independent legal, financial and taxation experts.
