re: Property - andrewk4

  1. 229 Posts.
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    Tomorrow I settle on my 2nd commercial property with an option on the third. The first returns 11.5% nett and the second will be around 11% next rent review but is well tennanted and located.

    I agree with the comments on yield before capital gain. It's all about finding wholesale lending rates, and maximising the spread. I'm currently shorting the US, and getting an effective rate of arround 5.25% on one of my loans - but of course this could double (or disappear) depending on currency movements.

    In commercial property, it's all about location, sqr footage, and amenities. You're not into this bs trip about views, the colour of carpets, or the neighbour's dog. And of course you're deailing with pragmatic business people who realise there's got to be some fat in it for everyone.

    As for leases typically being in the 5x5 category - that may be the case with prime commercial, but with 2nd grade industrial (my chosen vehicle) you're more likely to be looking at a 3x3.

    This will have been my most candid post to HC yet. I'd like to thank all the many sage posters who have helped me form my views on investing over the past few years. Although my share portfolio is about even, the knowledge gained has been invaluable.

    (and my best investment to date in terms of capital gain has been turning $120 into $1,470 on the TAB since the beginning of the Super 12. - it will paying for my next Fiji surf trip! The key to beating the TAB? It's the same advice as to those in the sharemarket - don't play to win, play not to lose.)

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