There is no statutory obligation for landlords to provide gas and electricity certificates to a tenant before granting a lease of commercial premises. However, if the tenant is an employer, they will be responsible for testing portable appliances.
What is the return on commercial property?
For commercial property investors, yields are typically much higher than residential property. Yields from commercial property can be anywhere from 5% to 10%. Meanwhile, residential property is known for yields between about 1% and 3%. The main reason for the difference is found in the lease agreement.
Does commercial real estate appreciation?
Most commercial real estate will appreciate over time provided the property is maintained and the surrounding area does not decline. In proformas most people assume an annual appreciation rate of 2-3%.
Do you have to pay GST when buying a commercial property?
The sale of commercial premises will often attract GST. Whether or not you are required to pay GST on the sale price of the property can make a significant difference to your cash flow. For example, a seller does not need to apply GST if the property is part of a “going concern”.
Who is responsible for commercial EICR?
You must hire a registered electrician to perform the EICR. They will let you know if anything needs changing or improving in order to comply with the Act before the property is let. As the landlord of a commercial property it is your responsibility to arrange periodic inspection and testing of the electrical system.
What is a good rental yield on commercial property?
A good rental yield tends to be upwards of 5% and around 8% is particularly strong.
Why commercial property is a good investment?
Commercial properties yield good rental returns over prolonged periods. Since the residential market is yet to pick up the pace, it will take some time for prices to appreciate. Whereas, in commercial real estate, Grade A office properties have already been yielding high returns.
How do you avoid paying GST on commercial property?
To apply the Going Concern GST exemption, the following conditions must be met:
- Both the purchaser and seller must be GST registered.
- Both parties must agree in writing (usually in the sale contract) to apply the Going Concern exemption.
How long does a commercial EICR last?
For many commercial businesses, an EICR, which used to be called a periodic testing report, will be required at the lowest frequency interval – every 5 Years. However, higher risk environments will require 3 Yearly or even more frequent testing.
How often should a commercial property be electrically tested?
every 5 years
It is recommended that electrical installation condition reports be carried out at least every 5 years for commercial properties. This can either be a 100% inspection every 5 years or a 20% inspection every year.
What is covered in commercial insurance?
Commercial insurance plans are designed to protect small businesses from injury claims, cyberattacks and other liabilities. There are many types of coverages including commercial property, workers’ compensation and general liability insurance.
What is the 50% rule in real estate investing?
The 50% rule says that real estate investors should anticipate that a property’s operating expenses should be roughly 50% of its gross income. This does not include any mortgage payment (if applicable) but includes property taxes, insurance, vacancy losses, repairs, maintenance expenses, and owner-paid utilities.
Can you make a lot of money in commercial real estate?
There is a lot of money to be made in commercial real estate. In many positions in our industry, people can earn from $80,000 to almost $250,000 between salary and bonuses.
Is investment in commercial property good?
Investing in real estate is always capital-intensive, which makes it out of reach of retail investors. “Office properties in the right location and project attract quality corporate tenants and can yield very good rental returns over prolonged periods,” said Anuj Puri, chairman, Anarock Property Consultants.
Can you claim GST on commercial rent?
Renting (as tenant) If you rent a commercial property as your business premises, the rent is deductible. As the renter (tenant), you may be able to claim GST credits for the GST included in the rent if you and the lessor are registered, or required to be registered, for GST.
