Wagga Wagga Blog

Commercial Real Estate is definitely overlooked in terms of bricks and mortar investment when comparing the percentage of people who invest in Residential Property, compared to Commercial Property.

With the residential market being unsettled for the past few months, after a consecutive 10 interest rate rises in a row from May 2022 to March 2023, some investors are looking at other options and Commercial Real Estate is proving to be a popular investment avenue moving forward in 2023.

Some thought provoking points to mention about Commercial Property Investment are as follows;

- Higher rental yields: The average return on investment yield for residential properties in capital cities across Australia are on average 3.6% Net return on Investment, where the average for Commercial property is anywhere between 5%-10% depending on the property type.

- Longer Leases: Commercial Properties attract longer term leases. In Wagga Wagga we see majority of our Commercial Leases being between 3 & 7 years, not including any additional options for further Lease periods. If you can secure a good quality tenant on a longer-term lease with annual reviews, you would be generating a great return on your investment.

- Negotiable Lease Terms: When leasing out a Commercial property the Lessor (landlord) has greater flexibility when negotiating lease duration with additional option periods as well as flexibility around the lease terms and conditions.

- Portfolio Diversification: Commercial properties can offer a mix of uses, such a retail shop with top shop housing above. This diversifies the tenancy mix with both commercial and residential tenants occupying the same property and thus, reduces risk of vacancies.

I could be slightly bias being a Commercial Real Estate Agent, but I professionally think that with a little research, many more people will see the opportunities that Commercial real estate hold for investment and creating generational wealth for your family.

If you have any questions about Commercial Real estate and investing here in our great city, please contact our team on 6925 8322.

Dylan Wooden

Commercial Real Estate Agent