3 Common Mistakes That Destroy Commercial Investors

Want a clearer commercial-property plan before you buy? Book a free strategy session with Helen’s team: https://link.unikorn.com.au/widget/bookings/calendar-strategy-call  In this episode of the Commercial Property Investor, Helen breaks down the three traps residential investors most often fall into when they move into commercial property. She explains why gross residential yield and net commercial yield are not the same thing, how hidden purchase and finance costs can turn a cash-flow play into a cash-flow problem, and why chasing a high regional yield can leave you exposed to long vacancies. Helen dives into: ◼️ Why residential and commercial returns must be assessed differently ◼️ How commercial-property yields are calculated on net rent after outgoings ◼️ Why a 4% to 5% commercial yield can still mean you have paid too much ◼️ How benchmarking the tenant, location, and comparable properties protects your purchase ◼️ Why investors move into commercial property for cash flow, then accidentally stay negative ◼️ The costs that need to be included before you decide a property is cash-flow positive ◼️ Why your deposit, equity, commercial loan, and purchase costs must be modelled together ◼️ How an 8% purchase-cost allowance can affect your real break-even yield ◼️ Why cash for transaction costs creates a safer commercial-property position ◼️ How overleveraging can push investors into riskier regional assets ◼️ Why regional commercial vacancy risk is different from residential vacancy risk ◼️ How a three-month metro vacancy can become nine to twelve months in a smaller market ◼️ Why a high yield is not enough if the replacement-tenant demand is weak ◼️ How to assess vacancy risk, tenant depth, and cash buffers before buying ◼️ The three commercial-property traps new investors need to avoid 00:00:00 The three commercial-property traps new investors miss 00:00:30 Trap one: confusing residential returns with commercial yields 00:01:02 Net rent, outgoings, and what a commercial yield really means 00:01:44 Why a lower-yielding commercial property can be an overpay 00:02:15 How to benchmark the tenant, property, and location 00:02:38 Trap two: the cash-flow and leverage problem 00:03:16 The true cost of equity, deposits, interest, and purchase costs 00:04:07 Why your break-even yield matters before you buy 00:04:54 How to avoid funding a commercial purchase at 108% leverage 00:05:35 Trap three: chasing high regional yields 00:06:14 Why commercial vacancy risk is different in regional markets 00:07:03 The danger of long vacancies and limited tenant demand 00:07:52 How to choose a safer yield and build the right cash buffer 00:08:38 The final due-diligence checklist before buying commercial Follow for more insights and updates: Website: https://helentarrant.com/  Buyer’s Agency: https://unikorn.com.au/  LinkedIn: https://www.linkedin.com/in/helentarrant/  Instagram: https://www.instagram.com/helentarrantofficial/  Facebook: https://www.facebook.com/helentarrantcommercialproperty TikTok: https://www.tiktok.com/@helentarrantofficial