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Shop and apartment

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  • Shop and apartment


    Haven't been around in a while so Howdy! Here to have a read through the Commercial posts and also ask for some general commercial investment advice.

    Looking at first commercial, small shop (max 30 people) in the main street of a small town with apartment upstairs.

    I am just after some general advice on what to look for, what questions to ask and what to avoid when looking at commercial property and commercial lending.

    Any advice GREATLY appreciated!


  • #2
    Be careful with small towns. If you buy a property in a city, you'll always have a buyer.

    Some are all right. Some you can get your fingers burnt. One warning sign is a single person/company owning a lot of real estate in the town. These sort can be real dreamers and BS artists. Spend some time in the area and do your own research. Get a feel for the place.


    • #3
      Ask yourself. If it is vacant how hard will it be to lease? If the answer is anything other than easy don't buy it.

      Unlikely to get much capital gain in most small towns so need to buy for good rent return 10% nett or better.

      Bank commercial lending 60% to of valuation and interest rates about 1% above residential.


      • #4
        GreenTreeFrog, factors to take into account:

        1) Seismic strength.
        2) Lease length, tenant strength.
        3) Total rent after expenses and so yield.
        4) Land size - could you extend the building later?
        5) Parking - is there enough?
        6) Is the flat consented?
        7) GST: A big issue but a) You can only claim GST back on the commercial part of the building, this applies to the purchase cost, maintenance expenses, rates etc.
        State of repair of the place. Roof any good or nearly stuffed? And other bits?

        Just some of the stuff I'd be thinking about.
        Squadly dinky do!


        • #5
          Thank you that is all excellent advice.

          How much do building inspections (standard IEP and more extensive DEE report) on commercial property cost?

          I am waiting to hear back from an Engineering company.




          • #6
            Some really useful tips and suggestions here in this thread. Thanks to all contributors because I myself have been trying to do some research on what are the best ways to help me derive with a decision before buying a property for sale Phuket. I am new in this form of transaction, therefore I was advised to do some homework before making any further progress. I guess now I am more confident to proceed further.