"Tim Watts" wrote in message
...
On Saturday 18 January 2014 12:42 Nightjar wrote in uk.d-i-y:


In case you think my rate of return is unrealistically high, a cousin
of mine has just bought a couple of buildings rented to a garage and a
tyre fitting business for £140,000 and his rental income from those is
£17,000 pa, or 12.14% return on capital.

I was going to ask - I thought 5% was more the norm? Is yours domestic
property?

No he rents commercial property

I've told him before he is extremely lucky to have a "single" commercial
property that give him this RoR.

As a "base-load" investment for "normal" people, commercial property is
generally recognised as a do not touch with a barge pole option.

Randomly choosing a commercial property to "buy to rent" could as easily see
you getting a 25 year return of 0% income and a loss on capital invested,
instead of the "luck" that Colin has had (though ISTR he rents the property
that he owns, to a company that he owns, so he has no risk of the tenant
doing a flit - this is not something that 99% of owner can rely upon).

Of course, you can get professional advice that will stop you buying such a
"dog" property, but such advice isn't cheap and generally isn't available to
people with less than 7 figures to invest.

And even with access to advice, the really good property will still be going
to those better connected than you. In many cases commercial property
really does only become available to normal people to buy, because no other
mug will!

tim