Ever considered commercial property?

By Nina Cuturic

Ever considered investing in property, but you’re not quite sure where to start?

If so, then the idea of investing in commercial property may seem completely out of reach, especially if you’re scared about all the unknowns?

Scott O’Neill from Rethink Investing busts some of the myths about commercial property investing with Your Mortgage managing editor, Sarah Megginson, and reveals that it’s actually far more accessible and affordable than you may think.

Not just for the wealthy

It’s often believed that commercial investing is only for those who are quite wealthy to begin with.

This is perhaps because commercial investing used to be an investment that required a decent deposit of 30% to 40% deposit to get started, which limited commercial investing to only those with access to a lot of funds.

However, this is myth in the current lending landscape, according to O’Neill – and the idea that you need a high deposit to invest in this asset class could preventing you from building wealth.

Another big myth about commercial investing?

“That you can’t get capital growth quickly out of commercial investments,” O’Neill says.

“Some of the fastest growing deals I’ve ever seen have been in commercial. I even had a property myself around the Newcastle area that was a little warehouse. In one year, it grew 26%.”

The property grew in value that quickly because interest rates were dropping, he explains.

“We negotiated a slightly better lease, and basically the market wanted to pay more than what I paid for. But, residential properties didn’t grow that quickly in that area,” he says.

You can “almost guarantee” a better cash flow and yield from a commercial property than what you would receive with a residential investment, he adds, so with strong growth prospects in the mix, it can offer the best of both worlds.

Watch our full interview above, outlining other big myths that could be standing in your way of reaping the potential profits on offer when investing in commercial property.

 

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