How to make more out of commercial property, even if banks put interest rates up yet again..

WHAT OTHERS HAVE SAID 

Michael

"Excellent course content. "Everything is easy when you have the knowledge" and this course filled in the last 10-20% of the missing details. Provided me with the confidence to proceed and purchase a strata industrial in SE Qld with 8.25% p.a. net yield with 3 x 3 year lease. The course was paid for many times over with this content"

Liviu

"The Course very easy to understand and follow. It has real world examples that helps you understand things fast and apply them in real situations. Examples were recent from commercial dealings done in the past year and that gives you confidence that what you are learning is valid and not a “get rich” fake thing. Once I finished the course I can say I went out and found deals that were in line with what the course talked about. Over all very very happy with the investment I did in this course"

Brett

Absolutely brilliant - James is very thorough in detailing the ins and outs of all things related to commercial property. After going through the course, I had the confidence and know-how to pull the trigger on my first deal, which is currently producing a net rent of $140,000 p.a! A terrific resource for anyone wanting to get into the commercial space without prior experience.

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About James Dawson

James Dawson is an active investor and puts what he teaches into practise in his own portfolio. Since he began his career more than 40 years ago, high-cash-flow producing commercial property has been his primary emphasis. He established the Commercial Investing Academy and serves as its chief trainer. The academy has more than one thousand students who are learning his commercial investment abilities, strategies, and techniques for accumulating wealth.

James has been a resident of Byron Bay for more than three decades and counts surfing, design, and home improvement among his other interests. James, who has a passion for travel, takes several months out of each year to experience a variety of locations and ways of living.

Frequently Asked Questions

Isn't commercial property more risky than residential?

No, commercial real estate is not inherently riskier than residential real estate. Each form of property has its own set of dangers and possible rewards.

Commercial properties, for example, often have longer lease periods and higher potential rental revenue, but they are also more subject to vacancy rates.

Residential properties, on the other hand, often have shorter leases and lesser rental revenue possibilities, but they may also be more robust to market volatility.

Furthermore, a property’s unique location, condition, and market circumstances can all play a role in determining its amount of risk. Finally, depending on the exact property and the investor’s plan, the degree of risk might vary substantially.

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Doesn't commercial property investment cost a lot more than residential?

No, commercial property investing does not have to be significantly more expensive than residential property ownership.

Some of our students have purchased commercial investment properties for a little as $220,000 including all costs of acquiring them.

The cost of investing in commercial real estate should be assessed on an individual basis, taking into consideration the unique property, location, and market circumstances. It’s also worth mentioning that commercial properties may appreciate faster than residential houses.

Finally, the cost of investing in commercial real estate should be balanced against the possible advantages and the investor’s particular financial circumstances.

Are commercial investment properties harder to improve on?

If you know what to do, it is quite feasible to increase the long-term value of a business property. Unlike residential buildings, where it is all about increasing a property’s liveability, commercial properties let the numbers speak for themselves.

Because a commercial property’s value is mostly determined by its rental revenue, locating buildings that are under-rented might lead to quick equity gains.

A 500-square-metre house renting for $100,000 per year, for example, is valued at $200/m2. If the market rent is $240/m2, the property is 20% under-rented.

In that situation, if you have a strategy and the resources to raise the rent to market rate, your revenue will be 20% greater. And, providing you acquired it at the correct yield from the start, this may enhance the value of the commercial property by 20%.

Another way to boost value is to strata title or subdivide the property. This increases value since smaller pieces may be sold or rented at a greater per-square-metre charge.

A 1000-square-metre warehouse, for example, may rent for $100/m2. However, five 200-square-metre warehouses may possibly rent for $130/m2. Essentially, you are reversing the “economies of scale,” and your worth might grow by 30% as a result of the increased rent per square metre. Other value-adds include renovation, lease extension, rezoning, and development.

When you buy a high-quality commercial asset, complete your due research, and implement a sound positively geared plan, your commercial investment will far outperform anything you’ve ever known in the residential environment.

Do commercial investment properties have lower capital growth?

Nothing could be further from the truth. Over a 10-year period, the value of commercial assets has doubled or even tripled. The issue is, how can you increase your chances of purchasing a property that will outperform others in terms of growth?

As in the residential market, a favourable location, scarcity factor, infrastructure upgrades, population expansion, tighter vacancy rates, renovations, or reducing borrowing rates are all elements that might contribute to capital growth.

Guess what drives commercial property growth. Everything said above! Because, like the residential market, the business market responds to economic gains.

The one significant distinction is that commercial property’s growth is more closely linked to its rental revenue. As a result, raising or enhancing lease quality will have a greater overall influence on commercial asset value.

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