Building a Warehouse as an Investment
Buying or building commercial property as an investment can be a great strategy, particularly for those looking for a consistent stream of income.
In the article below, we look at the return of investment of commercial and industrial properties and then take a look at how you can start investing.
One of the strengths of commercial properties as investments is their high rental return. While residential properties return only 3.4% of their overall value per year, industrial properties return about 8.1% of their total value yearly.
That’s a huge difference in a reliable stream of income.
So what’s the catch? There are a few. Let’s go through them:
Rental Income Risks
As always, a greater return indicates a greater risk. In regards to industrial properties & buildings, the high rental return relies on finding a reliable renter.
Residential properties are generally filled by tenants extremely quickly, but it can take months to find an appropriate tenant for a warehouse or factory space.
In any town or city, more space is allocated to residential building than industrial building. Finding a property to build on can be more difficult, and the council will likely hold you to tighter regulations before giving you building approval.
However, there is some goods news here. If you’re working with a trusted and experienced builder, they will understand regulations like the back of their hand. A quick phone call will give you an idea of what you can and cannot do. In these situations, your builder is your most important contact.
More good news: fewer people are building industrial properties than residential properties. This means you can often get industrial land for a better price, particularly if you choose your location strategically.
More Specific Needs
When building an industrial property, you’ll need to consider a number of requirements a tenant is likely to have:
- Access to highways.
- Space for heavy machinery.
- Appropriately large access points.
- Access to industrial utilities.
The location of your building is often extremely important, because location often provides value to the business operating out of it.
You need to make business as easy as possible to conduct from your space, so you will ideally find a place close to suppliers and other important networks.
Industrial properties tend to increase in value slower and steadier than residential properties.
Whilst residential properties have greater potential for capital growth, they also have a greater risk of going backwards.
How Much Does It Cost to Build An Industrial Building?
The average cost to build an industrial building is $166,065 AUD for the engineering, fabrication and installation of the building.
Site preparation, civil works, utilities etc are all additional costs.
For large factories over $400m2, the price can range from $100,000 – $400,000.
Rental return of residential vs. industrial properties: Property Observer)
The 10 Best Horse Films Ever Made
1.The Black Stallion.
This classic, epic film follow a shipwrecked man and a wild stallion that he befriends and eventually races when the two are rescued.
Based on a child’s novel of the same name, most of the scenes were filmed using a champion Arabian named Cass Ole.
A story about a cowboy distance rider racing his mustang against purebred Arabian horses.
Although there has been some controversy about how factual the finer points of the plot are, the film is nevertheless a classic Hollywood action film about a man who has a real bond with his horse.
3. War Horse.
Directed by Steven Spielberg and adapted from a novel, War Horse follows the story of a young man who finds, tames and befriends a horse until they are unwillingly parted. The story then follows the horse as it travels through the war, meeting and leaving an impression on everyone it meets.
The film is long, though, at 2 and a half hours, so that’s something to keep in mind before your commit yourself. The story was also told through a stage play that was well received.
This film centres on the actual racehorse named Seasbiscuit, an undersized thoroughbred that was never expected to have any success in racing.
The story captured the heart of the world during the Great Depression, when stories of underdog success were something the people needed. Decades later, the story remains inspiring, and has become one of the most famous equestrian films ever created.
5. The Horse Whisperer
Directed by and starring the ultimate Hollywood star Robert Redford, this is another timeless classic.
Redford plays the part of a horse trainer with an uncanny ability to understand horses. He is called in to help a teenager (played by Scarlett Johansson) and her horse get back to riding fitness after they suffer a tragic accident.
An animated film starring Matt Damon as a wild mustang, the story is all about a horse that cannot be contained. Although defying the human’s attempts to break him, Spirit is still willing to develop a close friendship with the humans he cares about most.
7. The Silver Brumby.
Filmed in Victoria, Australia and starring Russel Crowe, the film tells the story of Australia’s wild brumbies. When released overseas, the film was renamed The Silver Stallion, as it was believed international audiences wouldn’t recognise the term ‘brumby.’
8. Wild Hearts Can’t Be Broken.
A film unlike any other on the list, the story follows a woman who rider diving horses; horse that run up large platforms and jump off them into water. Diving horses were a popular attraction in the 1930s.
The film is based on a memoir by the rider depicted in the film. She lost her eyesight after a riding injury, but continued to ride while blind.
A Disney film about the life and experiences of the thoroughbred racehorse Secretariat. The film’s cast is largely made up of unknown actors and actresses, but the film was very successful on its release.
Based on the classic children’s novel My Friend Flicka, the story had been transformed into a film in 1943, and also into a 39 episode television series in the fifties.
The story has always resonated with young readers and viewers and is one of the original, classic equestrian stories.
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