Residential property is more about emotion.
Commercial property is more about the numbers.
When residential properties are bought, they’re usually bought for their appeal or the potential it has that hasn’t yet been realised. The upside of capital growth also helps.
If this wasn’t true, residential property buyers would just buy the first thing they saw.
Commercial property buyers on the other hand, focus mainly on the rental returns.
The yield.
The cash flow it produces.
After all, when it comes to investment properties, cash flow is always king.
If the numbers stack up and finance is approved, investors could actually buy the first commercial property they see.
Because when the numbers stack up, everything else usually falls into line.
Rental yield is also important in commercial property as it’s usually one of the main determining factors when assessing what the property is worth.
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This information is of a general nature only and does not take into account your objectives, financial situation or needs. We are not financial, legal or tax advisers. You should seek appropriate professional advice specific to you before acting on this information.
