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  1. #1

    Default commercial/industrial yield in christchurch

    hi,

    we're considering buying our first commercial property. it is a small unit under 500k, half garage/workshop and half office or showroom. it is a unit title property (with one other.)

    for valuation purposes, should we be looking for a yield of around 6%? presume this is worked out on the gst-excluded rental figures?

    thanks guys
    sam

  2. #2

    Default CHCH yields

    Quote Originally Posted by sam green View Post
    hi,

    we're considering buying our first commercial property. it is a small unit under 500k, half garage/workshop and half office or showroom. it is a unit title property (with one other.)

    for valuation purposes, should we be looking for a yield of around 6%? presume this is worked out on the gst-excluded rental figures?

    thanks guys
    sam
    Hi Sam, for valuation purposes 6% seems abit light around CHCH presently, with plenty of stock available.

  3. #3
    Join Date
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    Default

    Quote Originally Posted by sam green View Post
    hi,

    we're considering buying our first commercial property. it is a small unit under 500k, half garage/workshop and half office or showroom. it is a unit title property (with one other.)

    for valuation purposes, should we be looking for a yield of around 6%? presume this is worked out on the gst-excluded rental figures?

    thanks guys
    sam
    Why would you buy this?

    Bank will require the loan to be repaid over 10-15 years, which will suck all your cash and you will likely have to put in money.

    6% is quite low and doesn't give you any room for upside. The yield depends a lot on the term of the lease and property and could be a lot higher than 6% (ie lower value for the property).


    Why not try to find something where you can add value?

    I would also ideally like multiple tenants to reduce the risk?

    Is there earthquake issues?

    Ross
    More Profit from Property? TEACH ME MORE
    Ross Barnett - Coombe Smith Property Accountants
    Proud to give the best property advice for over 13 years.


 

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