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Why commercial property is the perfect retirement investment

12 August, 2017
Categories: Commercial, Investments

You’ve worked hard all your life. You’ve been responsible. You’ve saved; you’ve invested. Maybe you’ve played the stock market and done well. Perhaps you’ve accrued some residential properties along the way and then, finally, it’s time to retire.

When you imagine your retirement, you’re probably thinking of your favourite pastimes and long-held dreams — whether that’s traveling the world, lowering your golf handicap, dropping a line off the end of a boat or spending time with the grandkids. Whatever it is you daydream about, chances are it involves a lot of relaxing, fun, and rewarding experiences.

What you don’t imagine is spending your time poring over share prices every day, worried the value of your retirement nest egg is about to slide, or dealing with calls from angry tenants and incompetent property managers.

No, your retirement is your time. And it should be as stress-and hassle-free as possible. That’s why investing with a sophisticated commercial property syndicator could be the perfect retirement investment.

Commercial property is a stable retirement investment

Property, by its nature, is a lot more stable than many other forms of investment. If you’ve invested in property before, that won’t come as any surprise. But you might not know there is more to property than buying and renting out the house on the corner.

Enter, commercial property.

The great advantage of commercial property is the rents are higher, the leases are longer and the tenants (if chosen well) are a lot more secure than Mr and Mrs Smith. Ultimately this means commercial properties are higher yielding, the asset is more stable and the investment is more secure.

Why choose a syndicator

Some of the benefits of investing with a professional syndicator are:

  • Access to brilliant assets which you otherwise would not have had expsoure to
  • Fantastic economies of scale when it comes to getting the best finance, sourcing the best property manager and employing the best leasing agent
  • All the expertise you might need is already provided, with your syndicator already having deep professional relationships with accountants, lawyers, tax advisors, mortgage brokers, and so on
  • You’re tapping into a syndicator’s years of professional property experience.

But, ultimately, the main benefit is how much time you save. And isn’t this the most valuable benefit of all?

The real problem, then, is picking the right syndicator. And wouldn’t it be wonderful if the syndicator was ‘on the line’ with you all the way through all of the bumps and to enjoy all the benefits? This is often the best way to ensure transparency and it’s why Properties and Pathways takes a minimum 25 per cent stake in every investment.

With all this considered, it really can be a “set and forget” investment.

How secure is investing in a commercial property syndicate?

To be allowed to operate as a professional syndicator, and in order to raise money from investors, syndicates have to be licensed with the Australian Securities and Investments Commission. Those licences are expensive, they have to be maintained through a series of regular compliance checks, and they’re difficult to obtain, too.

Syndicators must meet regular auditing requirements, continued professional learning milestones as well as quarterly compliance reviews completed by independent external professionals. This is all to ensure each investor’s funds are managed with professionalism and integrity is maintained throughout.

There are tax advantages for soon-to-be retirees, too

Apart from all the reasons outlined above, there are also significant tax advantages to investing in Australian commercial property.

We know from our experience that many investors use their Self-Managed Superannuation Funds as an effective investment vehicle to capitalise on the attractive tax breaks. A large percentage of repeat investors with Properties and Pathways are near retirement age and are consistently using their SMSF to ensure utmost tax efficiency and to secure their retirement income into the future.

For all these reasons, investing in commercial property through a syndicate is a popular retirement investment option.

If you’d like to talk to someone about safely investing your income to ensure your retirement is secure, contact Properties and Pathways.

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