Scott O'Neill

So income security was quite good on this one.

Yeah.

So this is something I've witnessed many times over the years.

When commercial investors first come to this space, they are chasing only yields.

They've got that number, whether it's an 8% net return or a 7%.

They've got this magic number in their head, and that's what they want to hit.

I think that's what I fell foul of.

The first year I started investing in it, I just looked for the highest possible yield and I didn't look at quality as much.

I guess if you're comparing a good quality 6% net yield versus a risky 8% net return, there's a lot more risk in the 8%.

And your tenant may not stay there forever paying that high rent.

So to novice investors, it's not only about the yield, it's about getting a good quality return, one that's bankable, that's going to keep getting paid

Yeah, sometimes you need to go into the, you know, I guess a better quality suburb, a longer lease.

All those other factors come into play.

It's not just yield.

It's about the reliance on that yield that comes through.

So big message for first-time investors that you want the best quality return, not only just the highest return.

And the second one, and it's something I've come across lately because I think there's a lot of seminars out there telling people to chase value-add properties.

And this is one of the biggest mistakes I see where people come to commercial properties so fixated on adding value to properties, they buy poor quality property in the first place just to add value.

And for me, it defeats the purpose because if you buy well in commercial property, you're going to get a fantastic return through natural measures, which is just the high rent value versus the purchase price.

These are going to make you very good capital growth figures as well.