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Economy and commercail real estate

Discussion in 'The Pub' at netrider.net.au started by Zbike, Feb 1, 2009.

  1. Im getting ready to try and buy and industrail unit in sydney.

    I however think that i should wait a while like 6 months a year untill this recession thing get going and hits a few bussiness and hopefully pick up somthing cheaper shortly down the track.

    I want to know is it worth waiting as i am after a tiny unit 50-100 sqm im not sure if demand and there fore price on these will go down. Tryin to spend around 50,000 - 100,000 thou (i know it doesnt buy much but there are some avalible)

    2nd whats the market doing atm, what are your predictions for those that work in the field. (commercial real estate)
  2. Money's cheap at the moment.

    As far as Sydney real-estate goes, I think the 'right time' is generally 'as soon as you possibly can'.

    Assuming your negative gearing; if there are existing tenants or you have one lined up - I don't think you're likely to get yourself into too much trouble.
    $100k is not a big loan for a property these days, anyway.

    /not qualified to give you financial advice.
    //not a worker in this or a related field.
    ///suggest you speak to a real-estate agent, mortgage broker and a financial planner.
  3. :shock: A Ktulu opinion with disclaimers? What next??? :LOL:.
  4. yeah nah not negative geared,
    payment are from income of my bussiness which can be uneven so aint that easy for me.
    and its for use not investment.
  5. Why is leasing not a better option?
    What does your accountant say?
  6. Payments from business? Then I'd call it a business asset and would be claiming the interest, which is negative gearing, just doesn't generate any income for you! Can't think exactly what they call that at the minute.

    Oh, any property purchase is an investment..... good luck!
  7. Agree - leasing gives you the option to move up or down in size, depending on how the business is going. And also tough times shol d lead to better options for leasing as well

    But if you're committed to buying something to own and work out of, then go for it, should be a good investment over the long term, but remember commercial property is often vacant for months.
  8. I'd highly recommend you get some good business advice.

    If you're like most business owners, most of your investments tend to be in the business. That's why I would prefer to lease and try and keep some investments outside of the business - spread your risk a little.

    Also, how long is your business going to be exactly the same size that it is now? What do you do if you want to grow your business, and you need bigger presmises?

    Also, if your business needs cash in the future, and your cash is all stuck in that piece of real estate, you're in trouble.

    Leasing gives much more flexibility, with less risk.

    However, I don't know about your situation, and that's why I recommend getting some good advice.

    In SA we have local Business Enterprise Centres - not-for-profit places that exist just to help out small businesses. They can give free advice, point you in the direction of people who know stuff, and so on. It would be worth checking to see if there is something like this existing in your area.

    All the best!
  9. Tend to agree with the leasing part.

    Have two clients who both bought factory units in different areas of Sydney hoping for assets to sell when they retire. Both are now retirement age and both can't seem to sell or even rent the units. Seems theres an over supply in the Sydney area and anyone interested goes for the recent builds in new complexes for similar money.

    Something to think about!
  10. Is your business recession proof??

    If not, then I wouldnt be looking to lease or buy in the next 12 months.

    If it is, then leasing still offers flexibility (to an extent) over buying and if you do buy and your business expands, then you are left with a property you might not be able to rent out or sell.

    In this current economic environment, I would think long and hard about any decision that commits me and then after I have made a decision, I would sit down and re-think the decision.
  11. hmmm mite have to get one of those, its a small business 2 people.

    Don't like the idea of leasing, as i pay the same amount of rent as i would be making repayments (given a low enough purchase price.)

    Im far from retirement, but i do also know business owners that regret buying a property and admiting they should have continued leasing instead, (as bussiness is slow)

    Only downsized most of my customers (due to advertising) are below 25yr old and will probaly hit me hard.
    As far as mine goes i reckon i am at about about 50-70% recession proof,