As Australia triumphantly strides out of recession, largely unfazed, this means that once again Western Australia stands ready to jump headfirst into another boom. Great news… if you’re big business.
But if you’re like many and wanting to get a foot in the property market, the prospect of an impending boom is probably filling you with dread. After all, it can really mean only one thing: property prices are set to rise.
So how to crack the property market? Well, instead of going for a residential property, why not consider a commercial property. As Karen Brandon from Perth Professionals pointed out, they are usually half as cheap to afford and can be leased securely for up to three or five years.
Brandon caught up with OUTinPerth to discuss this new market move at one of her properties, a small street front commercial space lcated at 4/70 Wittenoom Street, East Perth.
What’s the appeal of buying a commercial property? Just at the moment you can still buy really affordable places for brand new. I mean this particular place is just under $400,000, approximately $399,000. It’s hard enough trying to get a unit in the city for that price. This is brand new as well, so from an investment point of view generally the leases are longer so you can get between 3-5 years even sometimes, for commercial leases. You’re in a high traffic location here as well so it’s just really effective from an investment from a point of view. Also there’s quite a few properties renting around here that are getting maybe $500-550 a week so there’s a huge return on the price you’re paying for it.
So what might suit a property like this? Oh there are a few different ones. Something like a hairdresser would be good in here. You can have offices; you can have consulting rooms for medicals you can have retail use. Mortgage brokers, finance retainers, people like that that would fit quite well in here. Because of the size as well, it would be really good for someone who just wants to get into the city and they’re just starting out and don’t necessarily need a huge space. So someone like your mortgage broker that’s only got a couple of staff and they want to get started and want a high traffic location, it would be good for them. There are quite a lot of people it would be suitable for.
Where else should people be looking? You still would be able to find some other properties around the city: West Perth and East Perth around that price range, there’s only a few but certainly I’d be looking around those areas for a commercial investment because that’s where people want to be. That’s where you’re going to get people driving past. That’s probably the number one for commercial return, especially if you’re wanting to rent it out, is to get something that people can see. You’ve got traffic going past, there’s going to be people coming through them, as opposed to a little office tucked away on the tenth floor. This is going to get people coming to it, so it’s got to be rentable really.
What should people be looking for in a commercial property? Definitely something with a high rental return, so something that’s obviously going to take as much of the mortgage paying out as possible. That’s obviously a big thing, You don’t want to be paying a lot of mortgage costs, as well as a really good location, as always you know location location location, that’s always a big thing. Something that you can get someone in straight away and not have to worry about it.
OIP
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