Keeping Confident
Not a bad Federal Budget all things being considered! The high level of deficit is to some extent academic, as the good old “cash cow”/taxpayer is there to call on.
Governments, Local, State and Federal in effect “run” the best “businesses” in the world as whatever the budget target they simply raise taxes, fees and charges to cover requirements.
As one of the highest taxed countries in the world we as a population are fairly immune to increases, even though we complain at the time, usually though only to each other!
One ray of sunshine in the budget is a continuation of the first home owner’s grant, slightly modified, but still helping to keep a spark in the real estate industry as sales at any level have roll on effects throughout the market.
Although interestingly, I’m in receipt of a property report stating the grant has actually kept investors out of the market as they’ve been unwilling to compete with first home owners.
If this is correct and government and media can keep the economic negativity down, investors hopefully will start to drive the market when the grant period is over.
In a very recent 24 day period I fielded 44 commercial based inquiries, mostly internet sourced, but also some walk ins directly to the office.
This tells me that apart from the fact that our business profile must be visible and effective, people are out there looking and feeling reasonably positive in regard to our country’s economic future.
They also must see real estate (and in this instance commercial based real estate) as a solid and relatively safe investment with benefits to be gained by being responsible for their own income, be it as pure investment income or income derived from their own business based enterprise.
Well positioned commercial property will return between 6% and 7% net to the property owner with tenants paying Council rates and Body Corporate charges.
Unlike residential, commercial tenancies are usually for a minimum of three years with the Body Corporate maintaining the outside of the building and the tenant responsible for fitting out, painting etc. the interior.
There are risks of vacancies but if well positioned the gap, if any, between tenant occupancies should be minimal.
Our economic future is very dependant on confidence levels and I see this recent interest in commercial property as a very positive sign.
Once again, in times of uncertainty owning real estate of any sort gives comfort almost beyond any other form of investment, and now is still a perfect time to buy!
Editor’s note: Apologies to John and to our readers for repeating John’s May column in June.
Montville Real Estate
200 Main St, Montville
Phone 5478 5478
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