Investing in commercial property is more complex than buying houses or apartments.

It can bring substantial returns, but can also result in significant losses if you make the wrong decisions.

When choosing a property type, it’s best to select a well-located, typical version that appeals to a wide range of buyers.

The possibilities include office spaces in the CBD, retail investments in popular shopping centres, and factories and warehouses in areas that are strong and easily accessed.

If you are looking for a property to invest in, choose one with a great location, strong tenants’ demand, and good physical condition instead of just focusing on yields.

The following tips can help you pick the right commercial property for your first investment.

However, before getting started, you should consult your bank or a finance broker to understand your financial commitments.

Are you ready to venture into real estate property investment?

Please take note that the locations provided in this article are general examples based on prevailing market conditions and are subject to change over time.

Retail investments

Strip shops are traditionally preferred by first-time investors.

Most often, this is just a retail store, but sometimes there is an office or a residence above.

It is also possible to get strata retail for a cheaper price since the land is generally not included.

Assets like these can still be purchased for under $1 million, and sometimes even less, with yields under 4%.”

Where can I find retail investment properties?

Locate a space that has main-road exposure and easy traffic access from all directions.

It is important to have good parking that is easily visible and accessible from the road.

You should also consider malls that have strong anchor tenants with low vacancy rates, such as supermarkets.

Get in touch with the centre’s management. How do they plan to boost business?

A well-established tenant with a long lease term and strong covenants are likely to renew at option.

Additionally, consider the zoning and potential future development of the property, as well as its permitted uses.

If you are considering investing in a certain area, you should also check for competition and vacancies.

It is more likely that future vacancies will occur if there is a lot of vacant space nearby.

Most of Melbourne’s retail strips are located in the eastern suburbs, but that doesn’t necessarily mean they’re the best buying areas.

You should also take a look at the inner north and inner west.

Due to its location and security, the Brisbane CBD is the best place to invest in Queensland.

Since strata retail units are limited in the city, investors are usually expected to pay a higher price, resulting in a higher yield.

A location near public transport and staff amenity, which in general attracts strong tenant demand, is a good alternative if options in the Brisbane CBD are not available.

It is recommended to visit Newstead, South Brisbane and Fortitude Valley.

Investing in offices

As a first-time investor, strata-titled offices are sometimes a wise investment because they often command a lower price, which means most buyers are first-time investors, super funds and passive investors.

A freehold property typically provides higher rental yields, but requires less maintenance than a leasehold property.

In most cases, it’s best to purchase a property with a strong covenant that’s encumbered by a lease. For residential properties, consider factors such as location, condition, and statutory expenses that drive value.

How do I find the best office investment?

An excellent investment opportunity exists within the Melbourne CBD and city fringe strata offices.

Due to Melbourne’s rapid population growth, strata offices within the CBD grid are in short supply and in high demand.

In light of this, the fundamentals of this asset class continue to support strong and continuing growth.

South Melbourne, Collingwood, and Abbotsford are three good suburbs for strata and freehold office investments.

It is recommended that office investments be made in Brisbane city, with a long-term lease in place, as well as commercial opportunities within a five-kilometre radius.

Public transportation, proximity to shops, and location are also important factors.

It is vital to keep the office lease as long as parking is available on-site. Beware of isolated locations as they tend to be harder to lease.

Other considerations include air conditioning, natural lighting, and security.

Investing in industries

It is becoming increasingly popular to purchase industrial strata units within new complexes due to their affordability – typically they are priced between $500,000 and $800,000.

In addition to being able to exchange early on in the piece, buying off the plan allows you to lease the units while they are being built.

Additionally, you may be able to capitalize on some capital growth from the start to the end.

Rental growth has also been high for smaller industrial units, resulting in good yields that might be better than putting money in the bank.

What are the best industrial investments?

If your investment becomes vacant, you will have a good chance of securing a tenant if it is located in an infill area or established precinct near local amenities such as transport and road links, infrastructure projects, residential areas (people prefer to work near home), business parks and shopping centres.

Furthermore, properties with full-height roller-door access and good heavy vehicle accessibility are important considerations, in addition to the amount of vacancy in the surrounding area.