Scott O'Neill

speaker

1,140 appearances 15 recordings 2 series first heard Jan 2022 last heard 12 May

Scott O'Neill’s voice in public audio — every appearance, attributed to the second.

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Recordings per month over the last 12 months — 1 in all, peaking in May 2026 with 1.

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Aussie Real Estate Podcast · Shifting to Commercial Property · 8 Jun 2022 podcast

When it comes to commercial, it's a different side of the story because, and I'll use some numbers to break this down for you because I think that's the best way to always put things in perspective.

Look at the numbers and say like a $1.5 million purchase.

I'm just going to use a quick case study because this is sort of what we deal with clients every day of the week.

And that case study is a $1.5 million commercial purchase.

Now, assuming the yield is a 6.6% net, your mortgage rate is going to be 3% currently.

That means you're going to clear after mortgage, after all costs, $68,000 positively geared income.

now let's apply those interest hikes so add the 0.75 percent to it that turns that 68 000 income down to a 58 000 income it doesn't sound that bad but this is the key difference with commercial to residential there's a lot of those people like you mentioned craig that have probably leveraged up taken a negatively geared position on a property and now that negatively geared position has got worse so instead of being negative 10 grand they might be negative 15.

It's not an income.

It's a liability.

It's a cost.

That's where you're going to see extra pressure on certain types of assets which have poor cash flow.

Yeah, so I think that's a key message for your listeners.

There is a difference and the key is in the numbers.

Yeah, that's a really good question, Craig.

And I feel like I'm quite well placed to answer this because we get to see people normally about six months before they purchase properties.

So we've got leads coming into the business.

We're discussing goals and what they're planning to do with commercial.

And

Since the rate rises have hit, we've actually seen a slight decline in overall numbers of people reaching out on commercial property, but we've seen an increase in total dollar amount.

So what I mean by that is we've lost some of our more entry-level investors.

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