The income yield from industrial properties is higher than residential properties, at generally 6 to 9 percent compared with 3 to 3.5 per cent

Buying factories, warehouses and workshops might not be as expensive as you think, but it does come with higher risk.

Vacancies are generally for much longer and tenants need to be adequately funded.

Leases are more complex and are for longer terms (usually a minimum of 3 years) and need to written by a solicitor.

Leases are based on net rent-, therefore council rates and maintenance are paid for by the tenant.

Investors will also need to consider GST and rental income, that is linked to inflation, which is currently low.

A lot of small industrial properties can cost between $350,000 & $500 000, which is below the median house price in most capital cities.

One of the advantages of investing in industrial property is that it is in the tenant’s interest to maintain the premises to a high standard- after all it is their place of business.

Lenders can often apply stricter conditions to obtaining finance than they do with residential property investment and you will most likely, need a 30% deposit and in some cases, even 50%.

Location is very important as well and often zoning restrictions, will govern what the building can be used for, so investigate this aspect thoroughly, before making a purchase.

Just like residential investment property, the capital growth potential of industrial property, will depend on size, location and rental yield, suffice to say; just like residential property investment- do your research very carefully before investing.

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