• Andre Dirckze

Residential vs commercial property - what is the better investment?

Updated: May 29, 2018

Adding images and videos to your posts is a great way to grab readers’ attention. Writing a text post? You can style it too with bold, italics, quotes & more!

Pros & Cons of Residential Investment

  • Generally lower rental returns (3.6% and slowing across Australia according to CoreLogic, January 2018)

  • Higher potential capital growth and resale value over time

  • Homes are generally more expensive to purchase, so you’ll need a larger deposit to get started

  • You as landlord must pay certain costs and fees such as council rates, water, body corporate, maintenance and repairs which chips away at cashflow

  • Leases usually span 1 year so you could find yourself with vacant property - and out of pocket - for periods of time

Pros & Cons of Commercial Investment

  • Commercial property values are more tied to the health of the overall economy and supply of similar spaces

  • It can often take longer to find tenants, you’ll need some flexibility in your budget to cover this

  • If you choose well, you should receive higher rental returns; sometimes double to nearly triple. Plus, fixed rental increases are built in annually.

  • Commercial property can be cheaper to purchase, so might be good way to jump into investing

  • Tenants pays most costs and fees such as council rates, water, body corporate, maintenance and repairs. Goodbye bills!

  • Tenants can also add value to the property with renovations and upgrades

  • Lease usually span 3-10 years

  • You are more likely to experience poorer resale value/capital growth and the value of the property usually drops if you sell when vacant or close to the end of a lease.

So, should you choose to invest in residential or commercial property? The answer is… probably both! Smart investors keep their options open and decide what is the best fit for their portfolio and stage of life at the time. And, whether you feel like a home or business space is the best buy for you, the smartest investors always minimise risk by undertaking independent research and seeking expert advice.


Interested in chatting to us about your investment portfolio?

Book an appointment with us today, it's free! 

3 views0 comments

The Financial Collective

Wealth Effect Group is an Authorised Representative of Boston  Reed Ltd ABN 89 091 004 885, AFSL 225738

“Andre Dirckze (AR 395157) and Beth Lavelle (AR 1238693) and Deborah French (AR 1271304) and Wealth Effect Group (CAR 424768) are authorized representatives of Boston Reed AFSL 225738 ABN 89 091 004 885”

As part of our continuing commitment to client service, the maintenance of client confidentiality and as required by law, Boston Reed  Limited complies with the Privacy Act 1988.


Wealth Effect Pty Ltd ATF Wealth Effect Unit Trust. ABN: 78 766 858 328  trading as WE Mortgage Solutions as an Authorised Credit Representative of BLSSA Pty Ltd Australian Credit Licence Number 391237,  Authorised Credit Representative :480612.

Privacy Statement

Any advice in this website is of a general nature only and all case studies are for illustrative purposes only. Please seek advice tailored to your own personal circumstances before acting on this information.  |   Level 1, 102/103 175b Stephen Street, Yarraville, VIC 3013

  • Facebook Basic Black
  • Black Instagram Icon