Why is there a stock shortage for industrial Property under $1,000,000?
Any one “in the know” understands industrial real estate rental returns yield up to three times more than residential property rental returns. Those investors will also have found purchasing an industrial investment property around the half million dollar mark, almost impossible.
The reason is that small industrial property prices had remained stagnant since the GFC - until mid last year when we saw prices steadily rising. Attending onsite inspections or auctions with my apprentices showed this price rise tendency accelerated towards the end of 2016. WHY?
Firstly, money continues to be cheap to borrow. Secondly, overseas investors snapped up properties until the government clamped down on overseas investors last year. Thirdly, very little new stock has been built in the past ten years because returns on investment have been too low to entice property developers.
But the main reason, is that small to medium enterprises have found it a better tax option to own their own premises and rent back to themselves, rather than to pay rent to someone else.
Prices have risen in excess of 35% in the past 12 months, even more for the smaller properties that used to be under $500,000
However, rents are now on the rise. This means old leases that are expiring and being rolled over for a new term, will be significantly higher - because the value of the property is now significantly higher.
So be quick! As an investor looking to earn great returns for future retirement income, now is the time to buy. Come to my next workshop to learn every thing you need to know about this little known, low volatility opportunity to boost your income.