New to commercial property, need some advise.
I am looking at a commercial property, offering 5.5% net yield. It is a freehold unit managed by a body corporate. So far, it has never suffer a day of vacancy since day one. The area enjoy high traffic and good in demand. The tenant has just continued with a new tenancy agreement, and has been running the restaurant for good many years. Read the latest Body Corporate meeting minutes and it seems to be all in order except one unit requested reimbursement for a water leak repair and was approved. The existing landlord holds the property since new.
Questions:
I am looking at a commercial property, offering 5.5% net yield. It is a freehold unit managed by a body corporate. So far, it has never suffer a day of vacancy since day one. The area enjoy high traffic and good in demand. The tenant has just continued with a new tenancy agreement, and has been running the restaurant for good many years. Read the latest Body Corporate meeting minutes and it seems to be all in order except one unit requested reimbursement for a water leak repair and was approved. The existing landlord holds the property since new.
Questions:
- Tenant pays all outgoing. Is there any hidden cost I need to be aware of?
- Are all the shops insured by group insurance purchased by Body Corporate as part of the Body Corporate fees? Is there a need to separately buy insurance for my shop unit?
- If half of my rental income from residential rental and another half from commercial, do I need to register GST if the combine income exceed $60,000?
- Being GST registered mean I have to pay GST for commercial property purchase. This GST paid can be reimbursed during IRD filing right? So what is the purpose of paying GST and collecting it back at the end of the day?
- My target is net yield 6% or more but it seems to be challenging to achieve for good commercial properties. Unless I buy leasehold or risky commercial properties. Is 5.5% net yield a norm or acceptable for such commercial property in Auckland?The yearly rent review would have improve the yield over time?
- Any other advise is welcome. Thanks!
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