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Commercial property investment strategies for Australians nearing retirement
Discover you can supplement your income and gain financial freedom in retirement.
Why is learning commercial property investment strategies important?
Are you heading into retirement and worried that depending solely on your superannuation funds won’t be enough to cover your living expenses? Don’t worry, you’re not alone. With rising living costs being a major concern for many Australians, especially those entering retirement, it is worth exploring other avenues to supplement your income.
One of the most lucrative ways for you to generate passive income over the long term would be to pursue commercial property investing. This avenue has long been considered a lucrative venture, which offers the wonderful opportunities of both capital appreciation and a steady stream of positive cashflow.
What does that mean? Simply put, by investing in commercial properties, you earn more than you spend. As the property owner, you can depend on your renters to fork out maintenance, rent, and tax expenses while enjoying the financial perks of property ownership.
The rental yield you collect from your tenants provides a financial cushion for you. It gives you the comfort and security of easily withdrawing money if you are hit with exorbitant medical expenses, want to save up for your child’s educational expenses, or even fund a relaxing holiday abroad.
So how much do commercial property investors really make? To give an example, recent statistics have shown that commercial property investors in New South Wales reaped the highest rental yields for prime office properties, with a net face rent of $1,323 per square metre.
While all of this may seem tempting, it is just as important that you remain tactful and apply effective strategies in commercial property investment, which can help maximise your earning potential.
Commercial property investment strategies and advice for retirement-bound Australians
1. Look out for commercial property hotspots
The location of a commercial property you invest in matters. Research and identify localities with strong economic fundamentals such as population growth, infrastructure development, and increasing demand for commercial spaces. Consider factors such as proximity to transportation hubs, amenities, and major urban centres. Property hotspots often exhibit consistent rental demand and the potential for capital appreciation.
2. Conduct a cashflow analysis
You should ideally evaluate the income potential and expenses associated with owning commercial property. Factor in rental income, operating costs, property taxes, insurance, maintenance, and vacancies. Ensure that the property generates positive cashflow to cover expenses and provide a steady income stream during retirement. Consider leveraging property management software to assess the property’s financial viability.
3. Diversify your commercial property portfolio
As an investor, you should spread investments across different types of commercial properties, such as retail, office, industrial, and mixed-use developments. Diversification helps mitigate the risks associated with fluctuations in specific sectors or markets. By diversifying, you can capitalise on opportunities in various segments of the commercial property market and reduce the impact of downturns on your overall portfolio.
4. Have a good exit strategy
You should plan ahead for potential scenarios that may require selling or transitioning out of commercial property investments. Establish clear criteria for when to exit, considering factors like market conditions, personal financial goals, and changes in lifestyle. Explore options such as selling the property, refinancing to unlock equity, or transitioning to passive ownership through property management arrangements.
Why work with Unikorn
At Unikorn, we are dedicated to assisting new and experienced commercial property investors in building a profitable, cashflow-positive commercial property portfolio. Our experts will guide you through every step of your investment journey, eliminating confusion and aiding in wealth growth.
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FAQs
Regular maintenance, property improvements, and strategic lease negotiations can enhance property value. Stay informed about market trends and adapt your investment strategy accordingly.
Consult with tax advisors to understand the tax implications related to rental income, capital gains, depreciation, and deductions. Explore tax strategies to maximise savings and minimise liabilities.
Helen Tarrant, a property expert with more than 10 years of experience will show you the ropes to making educated decisions in commercial property investing.
Book a strategy session with us, today! Click here