Residential VS Commercial Property Investments in Sydney

Property investment in Sydney has rapidly grown over recent years with no sign of it slowing down. Of course, the demand for properties has increased and that has given way to a new form of buyer – investors. However, which is best to invest in, commercial or residential properties? The following will explore both areas briefly.

Commercial Property Investment Can Offer Better Returns

While residential investments can be extremely profitable, it does seem that commercial investing is a little better. For instance most see investment returns on residential buildings anywhere between three and five percent which is very good, but commercial offers eight percent and sometimes over twelve percent. There are big differences in returns though of course if you don’t know anything about commercial property buying it isn’t for you. Residential investment property is still profitable but commercial brings in more.

Shorter Leases with Residential Buildings

If you aren’t looking for a long-term investment and would rather sell a home within a matter of a year or so to see a return residential may be best. Usually tenant leases can last a month to twelve months which makes it quite easy to find a tenant and sell when you’re ready. However, commercial leases can run considerably longer. Some can find they rent their buildings out anything from three years to ten so there are big differences. Of course if you are looking for a long haul investment then commercial may be suitable; then again property investment in Sydney can be shorter. It depends on what you need and want.

Issues with Tenants

Usually residential investment property comes with shorter tenancies which can be useful if there are problems. If there are problems with a tenant such as they are late paying or are noisy then once their lease is up, usually within a few months, you can let them leave and get better tenants. However, if you have issues with your commercial tenants, you may be stuck with them for years. This isn’t good because it can end up costing you money. Residential investment property in this case would prove to be better when it comes to problems with tenants.

Which Should Be Chosen?

To be honest, both residential and commercial investment properties can be extremely great. Both are versatile and they offer up a lot of potential to most investors. However, before deciding which area you want to get into you have to think about what is best for you. If you have very limited experience with property investment in Sydney you may want to start off with a small investment. Usually commercial properties don’t require large down payments which might work for you. Again, it depends on what is right for you personally. More details here:

Invest Wisely

The investment opportunities in Sydney at the moment are great but every investment may not work for you. There are many options when it comes to investments and you have to be aware of what they offer you. You might like the idea of getting into commercial property investing but it may not be the right avenue. It’s the same with residential investment property; you just have to find an investment you are comfortable with.