Industrial property may lack the perceived glamour of the residential or retail sectors, but according to Your Investment Property magazine, it has an awful lot to offer investors, including long-term tenants and higher yields.

With the current boom throughout the industrial sector, leases are in high demand and an increased number of investors are making the move from the residential market.

"The advantages are fairly dramatic," said Greg Cohen, regional director - industrial investment properties, CB Richard Ellis. "In residential you may have a return of 3%; with industrial your return could be 6-7%."

Long leases of three to five years are also standard, meaning investors are saved the hassle of finding new tenants at six-monthly or yearly intervals, creating a steady cash flow.

Another major benefit of industrial investment is that most outgoings are paid for by the tenant. "With residential, you as the landlord have to pay out your rates and taxes and all your outgoings," said Cohen. "With industrial properties it's a net lease, so the tenant will also pay all of your outgoings - council rates, land tax, water rates, possibly management fees, sometimes there can be other fees. Your return can become a true net return in your pocket. You have much stronger cash flow coming in off your investment and the rent will tick up without much effort."

And while the world of industrial property may seem a very different beast to the more familiar residential market, it's becoming increasingly popular with smaller investors.

"I think that investors are becoming a bit more educated in that regard," said Ashley Buller, manager - industrial sales and leasing, Jones Lang LaSalle. "That's probably because they recognise that it's so difficult now to get a good investment with a reasonable return that they're considering different options. Investors who probably never traditionally looked at industrial are now considering it."

According to Kristen Marsh, managing director of industrial real estate agency Billicorp, price is a key factor, with investors able to gain a foothold in the industrial market for as little as $250,000.

"This would buy an office/warehouse of up to 180/m2 in Sydney's western suburbs," she said. In Alexandria, a new eco-friendly development is currently on the market for $350,000-plus, with buyers expecting to get an office of 80-100/m2 plus storage of 30-50/m2. 

"These price levels compete with the traditional residential property investment market," she said, adding that a key benefit for investors is that industrial property requires less intensive property management.

For the complete story and more, read the latest issue of Your Investment Property magazine on sale now.