{"id":444,"date":"2019-07-01T03:35:16","date_gmt":"2019-07-01T03:35:16","guid":{"rendered":"https:\/\/nestegginvestments.co.nz\/?p=444"},"modified":"2020-11-17T03:42:20","modified_gmt":"2020-11-17T03:42:20","slug":"property-investment-residential-or-commercial","status":"publish","type":"post","link":"https:\/\/nestegginvestments.co.nz\/index.php\/2019\/07\/01\/property-investment-residential-or-commercial\/","title":{"rendered":"Property investment: residential or commercial?"},"content":{"rendered":"\n<p><span style=\"font-family: Calibri;\"><span style=\"font-size: medium;\"><span style=\"color: #000000;\"><img loading=\"lazy\" decoding=\"async\" class=\"size-medium wp-image-446 aligncenter\" src=\"https:\/\/nestegginvestments.co.nz\/wp-content\/uploads\/2019\/07\/residential-v-commercial-300x148.png\" alt=\"\" width=\"300\" height=\"148\" srcset=\"https:\/\/nestegginvestments.co.nz\/wp-content\/uploads\/2019\/07\/residential-v-commercial-300x148.png 300w, https:\/\/nestegginvestments.co.nz\/wp-content\/uploads\/2019\/07\/residential-v-commercial-600x297.png 600w, https:\/\/nestegginvestments.co.nz\/wp-content\/uploads\/2019\/07\/residential-v-commercial.png 602w\" sizes=\"auto, (max-width: 300px) 100vw, 300px\" \/><\/span><\/span><\/span><\/p>\n<p><span style=\"font-family: Calibri;\"><span style=\"font-size: medium;\"><span style=\"color: #000000;\">There is no doubt that New Zealanders love residential property as an investment.\u00a0 The reasons why are easy to note: property is a tangible, easily understood investment \u2013 you can see it, touch it, manage it yourself (if you choose).\u00a0 It generates cash via rent, offers some tax advantages, and generally speaking capital gains have been stellar over the last 20 years, although the market has been flat at best in Auckland for the last 3 years. \u00a0<\/span><\/span><\/span><\/p>\n<p><span style=\"color: #000000; font-family: Calibri; font-size: medium;\">Partly this love of property also dates back to the NZ share market surge and subsequent world-worst crash in the late 1980s.\u00a0 Many people over 50 today were burnt badly, and have avoided shares ever since. <\/span><\/p>\n<p><span style=\"font-family: Calibri;\"><span style=\"font-size: medium;\"><span style=\"color: #000000;\">But for investors looking for exposure to property, commercial property may be a better option \u2013 particularly by investing in listed commercial property companies that each own a significant portfolio of commercial properties.\u00a0 In New Zealand, this is through companies such as Kiwi Property Group, Goodman Property Trust, Precinct Properties, Stride Group, etc.\u00a0 <\/span><\/span><\/span><\/p>\n<p><span style=\"color: #000000; font-family: Calibri; font-size: medium;\">The advantages of listed commercial property compared with residential property are:<\/span><\/p>\n<ul>\n<li><span style=\"color: #000000;\"><span style=\"font-family: Calibri; font-size: medium;\">Part ownership.\u00a0 Rather than buying an entire residential property, investors can enjoy part ownership by buying shares in the listed property company.<\/span><\/span><\/li>\n<li><span style=\"color: #000000;\"><span style=\"font-family: Calibri; font-size: medium;\">Liquidity.\u00a0 Similar to above, investors can sell some or all of their listed commercial property investment on the NZ share market.\u00a0 Much quicker and easier than selling a house.<\/span><\/span><\/li>\n<li><span style=\"color: #000000;\"><span style=\"font-size: medium;\">Y<\/span><span style=\"font-family: Calibri; font-size: medium;\">ield.\u00a0 Commercial property typically generates a higher income yield (rental income as a percentage of purchase price) than residential property.\u00a0 In a market like Auckland, where residential yields can be below 3%, the difference can be significant \u2013 commercial property yields above 6% are common.<\/span><\/span><\/li>\n<li><span style=\"color: #000000;\"><span style=\"font-family: Calibri; font-size: medium;\">Costs.\u00a0 Costs are usually lower for commercial property v residential property.\u00a0 This includes the cost of property management.<\/span><\/span><\/li>\n<li><span style=\"color: #000000;\"><span style=\"font-family: Calibri; font-size: medium;\">Diversification.\u00a0 Listed commercial property companies own a number of properties, often in different geographical areas and sometimes across different segments of the commercial property market \u2013 industrial, office and retail.<\/span><\/span><\/li>\n<\/ul>\n<p><span style=\"color: #000000; font-family: Calibri; font-size: medium;\">Overall, property of any description is an excellent growth investment which has the added advantage of generating strong cash flows.\u00a0 It often performs well when equity markets are in retreat or when interest rates are low, and helps to reduce overall portfolio volatility.\u00a0 But investors should consider commercial property as an alternative to residential property due to its easier accessibility and superior liquidity. <\/span><\/p>\n<p><span style=\"color: #000000; font-family: Calibri; font-size: medium;\">\u00a0<\/span><\/p>\n<p><span style=\"color: #000000; font-family: Calibri; font-size: medium;\">Dean Edwards<\/span><\/p>\n<p><span style=\"color: #000000; font-family: Calibri; font-size: medium;\">\u00a0<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>There is no doubt that New Zealanders love residential property as an investment.\u00a0 The reasons why are easy to note: property is a tangible, easily understood investment \u2013 you can see it, touch it, manage it yourself (if you choose).\u00a0&hellip; <\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-444","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"aioseo_notices":[],"post_mailing_queue_ids":[],"_links":{"self":[{"href":"https:\/\/nestegginvestments.co.nz\/index.php\/wp-json\/wp\/v2\/posts\/444","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/nestegginvestments.co.nz\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/nestegginvestments.co.nz\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/nestegginvestments.co.nz\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/nestegginvestments.co.nz\/index.php\/wp-json\/wp\/v2\/comments?post=444"}],"version-history":[{"count":2,"href":"https:\/\/nestegginvestments.co.nz\/index.php\/wp-json\/wp\/v2\/posts\/444\/revisions"}],"predecessor-version":[{"id":447,"href":"https:\/\/nestegginvestments.co.nz\/index.php\/wp-json\/wp\/v2\/posts\/444\/revisions\/447"}],"wp:attachment":[{"href":"https:\/\/nestegginvestments.co.nz\/index.php\/wp-json\/wp\/v2\/media?parent=444"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/nestegginvestments.co.nz\/index.php\/wp-json\/wp\/v2\/categories?post=444"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/nestegginvestments.co.nz\/index.php\/wp-json\/wp\/v2\/tags?post=444"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}