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Information about the differences between residential and commercial property investment, and what to look for when buying property.
Potential property checklist
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Property investment
Contact us
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Contact us for more investment info |
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email |
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Westpac branches |
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phone 0800 177 277
(Monday to Friday,
8am to 8.30pm;
Saturday
9am to 3pm) |
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| The right commercial building needs to be in a good location that is attractive to businesses. |
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| Features to look for |
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a secure, well-lit area near main roads |
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good parking and similar buildings around it |
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the building should be in good condition with modern facilities. |
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| Another priority is finding a building that has a long-term lease with an established business. In many ways, the quality of the tenant is more important than the building itself—you are really investing in the success of the tenant’s business. |
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| Before investing in residential property for renting, consider the type of tenant you want to attract—a family’s needs will differ from those of a professional couple or students. This can make a big difference to the type of property and area you should invest in. |
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| Some features to look for |
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property in a good, safe area with facilities such as transport and shops nearby |
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a 2-3 bedroom place in good condition with modern kitchen, bathroom and laundry facilities |
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parking, fencing, decks, and outdoor areas all add appeal |
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make sure it’s sunny, sheltered and in a residential zone. |
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| If you’re looking at an apartment, check for |
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noise |
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smells |
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safety features |
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| Old converted buildings can cause problems such as higher maintenance costs. In all cases, you should get a building inspection. |
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| Before investing in residential property you should |
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think like a tenant, and ask yourself ‘Would I live here if I were renting?’ |
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get the necessary expert inspections to make sure there are no hidden defects. |
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| > download checklist: how does that property rate? (PDF 66kB) |
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| The minimum investment amounts are higher for commercial property. Most first-time investors start with residential property because it's easier to enter the market. |
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| Lower entry costs ie. $100,000 - $200,000+ |
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Higher entry costs ie. $250,000 - $500,000+ |
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| You can generally borrow most of the money – up to 90% for 30 years |
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You need good equity – maximum loan of 60-70% * |
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| Lower expected returns – but less risk |
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Higher expected returns – but more risk |
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| Less affected by economic conditions |
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Strongly affected by economic conditions |
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| Tenants may change frequently |
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Leases are usually long-term |
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| Landlord pays costs and repairs |
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Tenants generally decorate and pay outgoings |
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* Commercial loans normally also have higher interest rates.
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