For those who are ready to step into the Australian property market, they must have considered buying homes, apartments, and even holiday homes.
Perhaps Australian property investors have never considered factories or sheet metal workshops as potential investment properties, but experts say they do deserve consideration. Industrial properties are usually divided into: factories, studios, storage facilities, or commercial properties in the industrial sector-completely different from shops or office buildings.
David Lamb, owner of MLV Real Estate in Perth, said Australians are beginning to recognize the benefits of investing in industrial property.
Normally, industrial property has a much higher rate of return on investment than housing, says Lamb.
"the return on residential investment is about 3-5%, while industrial property is about 7-10%, but should be vigilant because high returns are also accompanied by high risks. Industrial properties are likely to have more risks in terms of location, building quality, and choice of tenants. At the same time, industrial property may not appreciate as fast as housing. " He said。
Industrial properties have a better prospect of renting than homes, with rent adjustments every 12 months, Lamb said. Another huge advantage is that the lessee pays all property management fees.
The biggest advantage of industrial properties is that tenants tend to sign longer leases, said Andrew O'Connell, the national marketing director of JLL's industrial real estate division.
Tenants tend to sign longer leases.
"Rental homes, every 12 months, need to find new tenants. However, for most industrial properties, leases usually last a minimum of three years, sometimes five years. " He said。
What are the disadvantages of industrial property?
In addition to the higher risks, experts say, industrial property lags behind housing in terms of asset appreciation; industrial property is far less popular than residential property in terms of demand!
O'Connell added that the risks posed by some industrial properties are linked to their operations-for example, companies that store or use chemicals in large quantities can cause environmental pollution.
Lillie Cawthorn, a shareholder in industrial real estate agency Bawdens and author of The Money Factory, an investment advice book, said she was moving from housing to industrial property 15 years ago.
"at first, I rented a house, and a lot of tenants would not cherish your property. But in industrial property, this is not going to happen-the lessee takes care of the property, because it's their way of making a living. " She said.
Starting with low-cost properties, Cawthorn spent A $275000 in 2002 on a small strata-owned plant.
She likes the "once and for all" investment characteristics of industrial real estate.
"I had the right person to manage it. I don't need to think about it until I get the bank statement every month. I don't need to run around and mow the lawn or worry about the kids swinging on the chandelier. " She said.
Cawthorn also likes the long-term investment attributes of industrial property.
"it's like a marriage. They want to run it all their lives, and I hope they can take it all the time. " She said,
Five recommendations from Australian property experts:
Find appropriate agents to obtain professional advice on industrial real estate;
Conduct detailed due diligence to understand existing and potential risks;
Don't act recklessly. The goods are compared to three. Make full use of the time, fully understand the market;
Don't buy buildings that are built specifically for a particular area. Because if the current tenant moves away, it is difficult to re-rent;
Get the right legal advice. Ensure that the lease agreement is fully improved.
