Investing in residential properties is quite common as good returns are expected in a short time. There is another reason also. Investment in residential properties requires less capital than investment in commercial properties. The legal requirements of buying commercial properties are also slightly elaborate and complicated. This is the reason why more people are inclined to invest in residential properties that are also easy to sell off. The investment entails servicing of finances for the project and this is arranged by renting out the property. But according to recent market trends in Australia, the returns from rentals of residential properties are lower than the returns from commercial properties.
Lesser Yields
Among all the classified assets, housing is giving the lowest yields. It is time for investors to turn to commercial properties that are now better options for investments. Of course, this applies to those who are inclined to invest in properties only, because better yields are possible from bank deposits and bonds issued by the government. How poor are the yields from investment in housing? Well, the gross figure available is just 2.9 percent and if costs are taken into consideration, it can go down to 1 percent. Yes, it is alarming, but true.
Switch Over to Commercial Properties
Commercial properties are faring better in terms of returns from rentals. It is more than double at 6 percent as compared to returns from residential property rentals. With dwindling returns from rentals, investors in residential properties are now dependent on capital appreciation only. But the housing market is almost saturated in Australia and returns can be deceptive from sale of properties. Returns of more than 5 percent from home sale are hard to expect during the year. Therefore, diverting investments to commercial properties would make good sense at this point of time to reap the benefits of better rental returns.
Decide Right
For property investors, this is the time to take the right decision. You can get guidance from some real estate agents who are experts in analysing and predicting the market. They can tell you the weak spots of investments and show you the way forward. Accept their views and vet it with your experience and knowledge about the market to arrive at the most appropriate decision that can make your invest grow faster. Websites like http://www.industrialzone.com.au/ can provide a lot of useful information that would make it easy for you to decide.
Selecting Real Estate Agent
A reliable real estate agent can give pretty accurate projections about market movements. When selecting a real estate agent, it is essential to check their credentials from published information, on the web and the printed media. But is more important to get some referrals about their capabilities, as these are more reliable feedback from people you can trust.
If you are investing in properties, the real estate company plays the role of your financial advisor too. This is an added advantage of working with a real estate company of repute. They can contribute positively to make your money grow faster.
