Commercial Property

Perth is an excellent area to rent commercial property in because of the exquisite views it has to offer, in addition to its overall atmosphere. When renting any commercial property, a business owner needs a space that offers much more than a good rental rate and a nice interior and exterior design. More practical factors also need to be taken into consideration such as parking, restaurants and transportation. Potential customers need to be able to easily arrive at the building and have a place to park in case they came by car. All of these factors should be in mind before renting a property. Below you will find some of the best areas to rent commercial property in Perth.

The Centre of the Central Business District in Perth

Commercial buildings for rent in the central business district of Perth are an excellent option for leasers. In this area, most buildings will have a view of at least one of the monumental sites that Perth boasts such as Kings Park or Swan River. In this central business area, you will have access to some of the finest shops in Perth at the Hay Street Mall. You can entertain your business partners at some of the finest eating establishments also. Even if it is just a late night at the office, you can order in from one of these local eateries.

This area is also a gateway to various Western Australian destinations such as the Margaret River wine region, Kings Park, Swan Bell Tower, Rottnest Island and the Aquarium of Western Australia which can be accessed by the ferry. This ferry can be a 5 minute walk from the centre of the central business district. There are also various taxis roaming the streets, the airport is 15 minutes away, there are free inner city buses and a 5 minute walk can take you right to the Perth train station and bus port. When you need an office that offers ample transportation services, the business district definitely offers these services. Also, it is beneficial to have your business in the area as many people will pass by every day, increasing your business exposure just by being in this location.

On the Border

For businesses that are looking to move away from the city, you may be interested in the west side border of the central Business District. The buildings may have a view of the Parliament house and will be a 5 minute or so walk to Kings Park. Parking and driving in this area is much less congested, making the access easy. Plus, if you, your employees or your customers are driving to the office, parking is cheaper and much easier to find. There is also the Central Area Transit or the CAT that passes through this area which is an excellent form of transportation to this area.

There are many factors that go into renting a commercial building in the Perth area. Make sure that your building covers its bases with a building with great views, safety, transportation and parking.

Once you take over your commercial investment property or apartment building, or if you have one currently, one of the things you should be aiming for is reducing expenses. Because remember, it’s all about that net operating income and getting that net operating income as high as we possibly can. The first thing that most people think about to grow that net income is to increase rents, which is understandable. Another route you may want to take is the reduction of your expenses. Are there any of your expenses that if you work on them, that could be reduced? That should be a question that should be on your mind right away and something that you should be working on consistently. Let’s talk about a few areas where you could reduce your expenses.

1: Property taxes.
2: Insurance.
3: Utility costs.
4: Common area maintenance (see section on the Rule of 7% CAM to
do this)
5: Management.
6: Garbage hauling or waste removable.
7: Repair and maintenance costs.

These are the main areas where you can find some opportunity. Look at this list of expenses. Think of ways you can reduce the expenses. Because many times, it’s far easier to reduce the expenses than to raise income in many cases. For example, let’s look at property taxes. Let’s say the property you own is currently assessed by the tax assessor for $400,000, but you know that your property value is say, $350,000. Yeah, it’s nice to have an assessment of $400,000 and it kind of makes you feel good; however, it is assessed $50,000 higher than what the property is actually worth. What do you do? You protest the assessment and you get it lowered to $350,000. What will this do for you? Well, think of it this way, depending on how much property taxes you pay, it could save you thousands of dollars.

Let’s get to the math of it. Let’s say that for every $1,000 you pay in property taxes, it costs you $.40, so in other words, for every $1,000 of assessed value, you’re paying $.40 in property taxes. In our example here, we’re paying $50,000 more in property taxes than we need to be. $50,000 times $.40 is $2,000. So, we’re paying an extra $2,000 in property taxes per year, or $167 per month. Now, it doesn’t sound like very much, does it? Even if you can improve your cash flow by $2,000 that probably isn’t a huge chunk.

Multifamily properties, use terms like “Class A, B, or C Class Property”. Like any professional language there is terminology you can learn. These terms, are used to help you to understand a property’s assets and expedite decision making when referring to asset property classes.

Let us take a look at what these terms mean for you as an investor:
Class A: Class A properties are new, upscale apartment buildings. Average rents are high, and they are generally located in desirable geographic areas. Class A properties have the highest valuations often referred to as per door and the lowest market cap rates. Their main attraction appreciation as it relates to their area position. Class B: Class B properties can be ten to fifteen years old. They are generally well maintained and have middle class tenants. Cap rates will be higher than Class A but lower than Class C properties. However, they are valued primarily as appreciation assets, rather than cash flow, vehicles. Class C: Class C properties generally have blue-collar and low to moderate income tenants. The buildings tend to be thirty to forty years old, and the rents are below market. Class C buildings are very attractive