Can Someone Teach me the Basics of Commercial Property?

[Glenn]

I suspect that is more indicative of Nelson's limited commercial environment. Outside of tourism and hospitality who's commercial premises requirements are very industry specific - there just isn't that much going on there. It's also a grossly overpriced city. My 2 top picks for location appropriateness are Auckland and Hamilton, though I don't like the numbers for Auckland - it's also grossly overpriced.

As the biggest fishing fleet in NZ or Australia and the largest mdf plant in the world, plenty of exotic forests, grapes, pip fruit and no railway subsidized like all the leachy cities we swing a bat way above out size. Then take into account the aircraft industry and shipping servicing there is plenty more than a few German back packers.
We suffer from the political bias of successful governments with a lot of our government services being supplied out of Wellington and Canterbury.
Just try to book a flight out of the town in the peak big city commuting times are on.
I have been here since 1971 and the property prices have always been way higher than most of the rest of the country. I am not sure what the percentage of owner occupier to rentals were back then. Probably way less rentals those days. So clearly the landlords have not caused the high prices.

[PTWhatAGreatForum]

I wanted to move there earlier this year (Nelson or Motueka) but there was stuff all available and it was so overpriced...

Plus no I.T. jobs available.

[Glenn]

I wanted to move there earlier this year (Nelson or Motueka) but there was stuff all available and it was so overpriced...

Plus no I.T. jobs available.

Yes we have one of the lowest unemployed rates in the country. I worked for Post Office / Telecom for 27 years. We always had good people dropping grades to get a job here. So we had a good bunch of highly skilled workers. When the axe fell it turned out we had half he staff per customers compared with the likes of Otago, Palmerston North and Canterbury. Those places were and still are fat on Government money. I have no reason to believe it was any different for other occupations like roading, health and what ever.
I might add though section development costs are double what they are in flat towns like Hamilton, Palmy and Canterbury. Hill sections cost heaps more to develop.
More people want the flat sections so their cost reflects the costs of development of the hill stuff.

Ps of course our landlords are the best in the country so tenants just flock here.

[Davo36]

Oh, you're an expert on commercial property as well MichaelNZ. I'll have to add that to the list of things you're an expert in like all things electrical/electronic and the morals of residential property investment. You'd be a really fun guy to have a coffee with, I'm sure you could teach people all sorts of things we don't yet know that we don't know.

DaveW, can you expand a bit on how you found that investment? I thought Wayne's second paragraph was about right.

Maccachic, do you have any examples of earthquake prone buildings being fixed cheaply? I'd be interested to hear how this can be done.

[PTWhatAGreatForum]

Oh, you're an expert on commercial property as well MichaelNZ. I'll have to add that to the list of things you're an expert in like all things electrical/electronic and the morals of residential property investment. You'd be a really fun guy to have a coffee with, I'm sure you could teach people all sorts of things we don't yet know that we don't know.

hahahaha Davo36. Clearly you can't tell the difference between advice and opinion. This is a online discussion forum. By all means ask me for professional advice on certain technical stuff. But I only offer opinion on commercial property. There's my disclaimer to clarify things for you.

[genius]

when would you guys recommend the shift from residential to commercial. I'm 25, own a few residential properties in Auckland and am thinking about diversifying my portfolio a little bit. Getting into shares etc slowly and am also looking at commercial property investment in Auckland. I will read the book "Commercial real estate investor's guide : making money as a commercial property investor in New Zealand " book
Would also like to know when you guys made the switch. Thanks.

[PTWhatAGreatForum]

when would you guys recommend the shift from residential to commercial. I'm 25, own a few residential properties in Auckland and am thinking about diversifying my portfolio a little bit. Getting into shares etc slowly

Shares:

[lewyh]

With all the issues you mention about commercial, I feel now that it's probably a bad idea for me to get into this.

Seems like the best way is to set up as a company like PFI that companies can approach to build for them and lease back with long term agreements (>5 years). The target customer being those who don't have the capital to put down a massive deposit and pay back the lot in the short timeframe required by banks.

But then that would involve setting up company relationships and advertising... Seems easier just to buy some PFI shares and not get as good return, but have it all managed for you.

[PTWhatAGreatForum]

Commercial property = so many ways to come unstuck.

Both as a landlord or a tenant.

[DaveW]

Yes stay away from commercial... less competition for us investors

[Davo36]

Lol, yeah, I agree, commercial is a minefiled man!

[Beano]

Great time to be in commercial property while interest rates are low and net yield are still reasonable

[Beano]

I made the switch when i got to 4 residentials
Never looked back (income wise)
Perhaps i would have done better only buying only auckland residential ...hard to say as residential you make so little where as commercial you make so much

[DaveW]

That doesn't make sense. You say you make more in commercial but then you said perhaps better residential.

[snobilo]

I believe he is talking about cash flow, commercial has good cash flow residential has the capital gain.