Industrial real estate’s income generating potential can unlock the door to your financial freedom
Do you need an investment strategy that will provide you with consistent income? Industrial real estate consistently exceeds the returns generated by both commercial and residential property. When it comes to providing consistent and stable income, industrial property is an untapped opportunity for many investors, especially women. Here’s our top 5 reasons why industrial property trumps other real estate classes for generating income.
Reason 1: Higher returns, lower volatility over the long-term
As reported in the Australian Financial Review in June 2016, industrial property has provided returns of 8.2% per annum over the past 10 years, with volatility of only 3.7% per annum.
Reason 2: Higher net returns
Industrial property also usually provides more income. In today’s market, industrial property returns are 5.5-7% net (ie after all expenses). In contrast, residential returns are typically only 2-5% gross. For women looking to generate passive income to fund their retirement, investing in industrial property can be a smart choice.
Reason 3: Longer lease periods
Longer lease periods, generally three years or more, with most tenants renewing repeatedly, mean you have certainty about how much money you’ll have coming in.
Reason 4: Lower vacancy rates
Going hand in hand with longer lease periods is lower vacancy rates. As tenants need to stay in the premises to keep their business operational, it is in their interest to negotiate good terms and stay on. A factory or warehouse in a good location with great access and flexible use will be in high demand due to a shortage of new industrial property developments since the GFC in 2008.
Reason 5: Outgoings paid by the tenant
Unlike residential property, in a well-structured industrial lease all outgoings are paid by the tenant – even your legal fees for negotiating the lease can often by paid by the tenant. These costs include rates, taxes, insurance, water, sewage and so forth.
Keen to find out if industrial property is a good addition to your financial portfolio?
Money Factory Investing runs workshops especially for women just like you to find out more about investing in industrial property. We’ll answer all your questions – no matter how big or small – and provide you with a blueprint for how to develop an industrial property investment strategy and how to get the right advice so you can invest with confidence. You’ll leave the seminar with the knowledge of what support you’ll need and the questions you should ask of real estate agents, lawyers, property managers, tenants and more.