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)
How to Keep Schoolyards Safe
There are very high Occupational Health and Safety requirements on school yards, in order to keep both students and teachers safe. There are many things to take into account and ways to maximize the safety of your school yard. Although the risk of injury is never entirely removed, you can make it a lot lower through these ideas listed below.
Hard surfaces under equipment
Having hard surfaces under equipment makes the risk of a child hurting themselves if they fall far higher. Try to implement softer surfaces such as bark or spongy flooring to cushion a fall.
Lack of maintenance
It is obvious that upkeep of any school yard is important. Broken or faulty equipment should be removed and dangers such as pot holes in the grass or slip hazards should also be taken care of to avoid unnecessary injuries.
Supervision is critical during recess and lunch in the school yard. Students should be watched to avoid them from doing anything that could cause themselves or someone else harm. It is difficult to keep an eye on everyone at the same time though, ensure you have enough supervisors to have eyes over the whole of the school yard during these times.
Little nooks and cranies seem to attract children, especially younger ones to see if they can fit in them. This could result in a child being trapped and getting injured. Look over the school yard to make sure there are no places that provide such opportunity.
Pinch points and sharp edges
Playgrounds often have nasty little defects that can cause injuries as such. Pinch points and sharp edges are big Occupational Health and Safety hazards and should be removed if possible.
High platforms without barriers
This should be obvious to make sure high places have barriers to reduce the risks of students falling and hurting themselves. However as kids enjoy climbing they sometimes will get to high places where they aren’t meant to be. This ties in with making sure playground equipment is used properly.
Overcrowded play areas
To many students running and playing in one place at the same time is very dangerous. Someone getting hurt is almost unavoidable when there are too many people running around in a small place. Make sure your supervisors look out for this in the school yard to avoid the extra injuries.
Ball Court Covers
Make sure your ball court covers are as safe as possible by padding all columns properly. Also make sure your ball court cover does not have cross bracing along the sides, as this is sure to cause some serious injuries if any student runs into it or trips on it.