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Commercial Property Investment Foundations, Ep 290

NZ Everyday Investor

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Commercial Property - What's the Deal?

With commercial property, a lot of it revolves around the lease. So if you've got a weak lease with short-term leases, not under-rented, not favorable rent reviews, then that's a low value commercial property. But if you can strengthen that lease, longer-term, better tenant, better rent reviews, higher rent,. It's all about that lease documentation, and that's how you influence the value of commercial property. The main benefit is that high yield, and also you're creating value from the lease. Because the lease will determine the value of the property - so cap rate means your capitalisation rate has to take into account different risk factors such as vacancy or strength

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