Insight Equity Limited

https://www.insightequity.co.nz/new-blog/tchallenges-for-commercial-property-owners-after-cyclone-gabrielle

Top Challenges for Commercial Property Owners after Cyclone Gabrielle — Insight Equity Cyclones can be a catastrophic event that causes significant damage to both residential and commercial properties. In this post, we will discuss some of the biggest issues that commercial property owners may face in the aftermath of Cyclone Gabrielle.

What are six reasons to consider investing in commercial property vs residential property? ⁠
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1. Tenants typically pay for outgoings ⁠
(rates, insurance, management expenses, some maintenance) and often contribute to capital improvements.⁠
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2. Interest Deductability⁠
Interest paid on a commercial property mortgage is considered a business expense and can be deducted from your taxes. Since interest deductability was removed from older residential rentals, returns are now lower in residential property investing.⁠
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3. Longer leases⁠
Tenants typically sign lease agreements that vary from two years to fifteen years (asset dependent) and usually extend for longer periods called rights of renewal. This offers longer term-certain than residential tenant agreements, and can save costs in vacancy over time.⁠
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4. Stronger returns⁠
The rental return on investment for a commercial property can be higher than that of a residential property. Especially when capital improvements enhance the building.⁠
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5. Objective vs Emotive⁠
Commercial property investing is objective and business orientated whereby residential investing can often be emotive when dealing with tenants.⁠
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6. Favourable lease agreements⁠
The ADLS lease agreements typically used in commercial property provides clear obligations to both tenant and landlord, and is considered fair on both parties. The residential tenancies act is tenant-favourable and less attractive to landlords.⁠
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Discover the key to successful commercial asset management with our expert advice!⁠