Are you new to commercial property?

The residential vs commercial property debate continues with investors with most favouring residential property. Why? Everybody knows about residential property, we all live in a home and we feel we know it better. We read, hear and see it in the media all the time with prices booming, pricing crashing, and as a result it seems the safer or better option. But really, it’s not. Commercial property is simply mis-understood by many.

We’re not saying that residential properties are a bad investment, on the contrary. If you’re just starting out on your property journey, and don’t have a large deposit, then yes – go for a residential property because it’s the easiest way to get on to the property ladder. Buy as many properties as you can comfortably afford in the coming years by leveraging as much as possible.

But there will be a time when you’ll need and want to go to the next level, and that’s were commercial property will be your next path.

The key benefits of commercial property are:

• Higher cash flow returns
• More investment control
• Stability of income for longer periods of time
• Lower long-term risk
• Better tax benefits
• Exposure to different sectors of the economy with different asset types
• More options to add value
• Returns (rents) inline with inflation
• Leverage/financial gearing

The below table gives you a quick snap-shot of the relevant differences of residential and commercial property.