Revolve Commercial Property Podcast Australia podcast

January 15, 2025 Flood zones, Capital Gains, and Risky Tenants — What You Need To Know Before Buying

How do you weigh the big three in commercial property investing — lease length, returns, and capital gains?

Ruth’s sharp question about property factors gets dissected here, revealing the fine balance between risk and reward. From metro yields to flood-prone pitfalls, this episode packs real-world insights every investor should know.

Whether you're wondering if a longer lease really equals better value, or trying to decode the risk premiums in flood areas, we’ve got you covered.

The episode is tailored for you if:

🏭 You’re an aspiring commercial real estate investor looking to understand risk vs. reward.

🔎 You’re a risk-conscious buyer considering flood-prone or high-risk areas.

🏢 You’re an experienced property owner evaluating new investment opportunities.

📝 You’re a finance enthusiast wanting insights into real estate markets and trends.

🏢 You’re a real estate agent seeking deeper knowledge to advise clients effectively.

Property investing isn’t just about crunching numbers. It’s about knowing which numbers matter most. There’s no one-size-fits-all approach — but there is a strategy that fits your goals.

WHAT YOU'LL DISCOVER IN THIS EPISODE:

The pros and cons of lease length and tenant commitment (00:01)

Why metro properties cost more but carry less risk (02:45)

The balance between high yields and higher risks in smaller markets (05:30)

Capital gain vs. market gain — what’s the difference? (08:15)

Navigating insurance nightmares and tenant hesitations in high-risk areas (12:20)

“If you're looking at a property that is more regional, you're going to get a higher yield, but your risk level is going to be higher.” - Mish Daniel

“The difference between your capital gain and your market gain is that your market gain is going to move at the same rate as what the area is moving at. So in other words, the higher the vacancy, the lower your market rate. And it works exactly the same as residential.” - Mish Daniel

“In residential, if you are in areas where there's high demand, low vacancy, your property is in demand, so it's going to go upright. So exactly the same as commercial. You’re wanting to be finding properties that are in high demand areas where there is very little stock, so there's a lot of demand on where they stop.” - Mish Daniel

“If you're buying a property in a flood prone area, first thing you want to go and look at is the insurance and are you prepared to take that risk. That's the first thing. The second thing is your tenants, the type of tenants that you're going to get into that property. They're probably going to check it out and say, ‘This is a flood zone.’ What is their risk? Are they prepared to go into a flood prone area? Because their insurance is now going to be sky high as well.” - Mish Daniel

#CommercialRealEstate #IndustrialProperties #DueDiligence #TenantRelations #InvestmentStrategy #RealEstateInvesting #PropertyPurchase #LeaseNegotiations

SHOW CREATED BY REVOLVE COMMERCIAL PROPERTY PODCAST

HOSTED BY: Mish Daniel

Ph: +61 401 313 573

Website: ⁠www.revolvecommercial.com.au ⁠

Email: ⁠[email protected] ⁠

YouTube: ⁠@mishdaniel-revolvecommercial⁠

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