6% NET Commercial Buy-Hold Long Term Tenant
BOOM ANOTHER ONE...Purchase #74 by Easy Buyer's Agent. This purchase is for our local investor who was looking to buy commercial property. Purchase: $870,000 a 1000sqm+ service commercial property with long term tenant who has been there for more than 15 years earning $52,000 = 6% NET yield. Read on.
Our buyer engaged us to assist with the due diligence work and negotiation.
This property was interesting because it has been tenanted to a very long term tenant whose business has been going from strength to strength. When we did the due diligence, we identified the property being very straight forward with no future development planned in the area that will affect the property negatively. We also looked at the tenancy agreement and the tenant has just recently signed a 5 year lease until 2026, and further 5-year option. Backed with a strong bank guarantee, our client had the confidence to move forward with the offer.
Easy Buyer's Agent also did a detailed analysis on sales and rental data to ensure the price (especially the rent) was according to market. The last thing you want is for you to have a tenant who has been paying rental way above market only to ask for reduction or event vacant the premise eventually.
Long story short, our client managed to secure this property with a very healthy 6% NET yield (yes, all expenses including Property Management fee is paid for by the tenant). For this type of commercial property, it is indeed very rare to achieve such yield.
Looking to buy property in WA? You know who to call. Residential or commercial, we can certainly help. Don't let the stress of buying property get the better of you. Let's just chat property, consultation is free. Until the next purchase. Peace.