Case Study – How To Create Passive Income Through Commercial Property Investing

Case Study – How To Create Passive Income Through Commercial Property Investing

Commercial property investing is like residential property investing’s big brother.

Many investors start out in residential property because ifs safe and familiar, while a smaller percentage of investors focus solely on commercial real estate.

In todays blog we take a look at Rosco’s journey from a carpenter in New Zealand to a self made businessman, developer and commercial property investor.

When did you buy your first home?

I built my first property on my weekends and after work at age 22. It was a 3 bedroom, 1 bathroom home in New Zealand.

When did you buy your first investment?

I bought my second property, which was my first investment when I was 25.

When did you make the jump into commercial property?

I bought my first industrial building at age 33 in New Zealand.

What other projects have you completed?

I have done a number of spec homes through my building company.

I have also developed a number of commercial properties and have tracks of land in New Zealand which I will develop further over the next 5 – 10 years.

What do you get up to outside of commercial property investing?

I run G.J. Gardner Homes Victoria and Tasmania along with the number one G.J. Gardner Homes franchise in New Zealand.

I also love off road running, training, snow boarding and spending time with my family.

Why did you make the shift from residential to commercial property?

I, like many investors, find residential property to be labour and time intensive. I think I got to a point where I was sick of dealing with residential tenants with short term contracts.

I was looking for investments, with high cash flow, which lead me into the world of commercial property investing.

Commercial properties give you the opportunity to:

  1. Negotiate longer term leases (5 years +).
  2. Access higher returns.
  3. Manufacture capital gains.
  4. Create a passive income stream.
  5. Set and forget.

What advice do you have for residential investors looking to make the transition into commercial property investing?

  1. Look for multi-tenanted commercial buildings. This way if your cash flow dries up from one tenant you still have cash flow from others.
  2. Move beyond your comfort zone and dont write off commercial opportunities because they seem foreign.
  3. Locking away a longer term commercial lease increases the value of your property.
  4. Make sure you set up for regular rent reviews however a good trick is to have a CPI increase on the years where there is no rent review.

What advice do you have for residential investors looking to stay in the residential property market?

  1. Remember the value of your property is in the land. Always be looking to increase your land to building ratio.

What would you do differently if you could start over again?

  1. I would take the time to find the right opportunities before I buy.
  2. I would buy commercial property closer to major cities.
  3. I would look for areas with significant infrastructure investment and unique features.

Whats your next step?

Im looking to continue to:

  1. Build residential spec homes.
  2. Pay down my loans.
  3. Develop the commercial property sites that I have acquired.

For more like this read:

30 minutes with Murray Kahler a self made millionaire, developer and investor.

6 massive tips from 31 year old property investor and developer Chris Moscher.

How did a 30 year old Newcastle Knights cheerleader buy 3 properties before she was 30?

If you have a property investment story you would like to share please get in contact with us via the comments below.

Ben Everingham

About

Ben founded Pumped On Property after building a multi-million dollar property portfolio over a 5 year period. His mission is to show you how to replace your income through property investing so you can do what you love…full time.