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Same deposit. Two very different borrowing positions. This is the part that catches people out.Say you have $250,000 to ...
21/09/2026

Same deposit. Two very different borrowing positions. This is the part that catches people out.

Say you have $250,000 to deploy.

Residential lending will take you to 80 percent, sometimes 90. That deposit reaches an $800,000 house comfortably, maybe more.

Commercial lending sits at 60 to 70 percent. Shorter terms, higher rates, and often a fifteen year amortisation rather than thirty. The same $250,000 reaches something closer to $700,000, and the repayments are structured harder.

So on capacity alone, residential wins.

Then you look at what each one returns. The house nets you roughly 2.4 percent after everything you pay. The commercial asset, on a net lease with the tenant carrying outgoings, nets closer to 6.4.

That is the actual trade. You can buy more house, or you can buy less commercial that pays you substantially more and grows on contracted increases rather than market sentiment.

Neither answer is universally right. It depends on whether you need capital growth or cash flow, how long you can hold, and how much vacancy risk you can absorb without it hurting.

But you cannot make that decision without running both numbers, and almost nobody does.

20/09/2026

Someone asked me this week what actually happens in one of these sessions, so here it is.

First fifteen minutes is your existing portfolio. What each property rents for, what you paid in rates, water, insurance, strata and land tax last financial year, what the loans cost. Most people have never put those numbers side by side. Watching someone see their real net yield for the first time is usually the most useful part of the hour.

Next twenty minutes is the comparison. Same capital, modelled against a commercial asset. Not a brochure yield. Net, after the outgoings the tenant would carry, with a realistic vacancy allowance built in rather than assumed away.

Then we stress it. Six months vacant, what does that cost you, and how long does the asset need to run cleanly to recover it. If the answer is longer than you can stomach, that is the answer.

Last ten minutes is capacity. What you could realistically fund, given commercial lending sits well below residential LVRs.

You get three to four pages in writing afterwards. It is yours whether you work with me or not.

There is no pitch in it. There is not a slide deck. If the honest conclusion is that you should stay exactly where you are, that is what the document says.

Ten of these are free at the moment. homez.au/commercial-strategy-session

18/09/2026

Commercial property is not one asset class. Treating it as one is how people get hurt.

Industrial has been the strongest of the three for years. Small units, decent covenants, tenants who are hard to relocate because the fitout and the location are tied to how their business runs. Vacancies are shorter because demand is deeper.

Office is a different conversation entirely, and anyone telling you otherwise in 2026 is not paying attention. Secondary stock in secondary locations has structural problems that a good yield on paper does not solve. There are exceptions. Small strata suites with an owner occupier profile can work. Most of it does not.

Retail depends almost entirely on what sits either side of it. Neighbourhood retail anchored by something people visit weekly behaves nothing like a strip of discretionary shops that empties when spending tightens.

When someone says commercial yields are 6 to 8 percent, ask which sector, which location, which tenant and how long the lease runs. Those four answers explain most of the spread.

The number on the ad is the least useful piece of information in the listing.

Which sector are you looking at, and what is drawing you to it?

17/09/2026

When to walk away from a commercial deal. Everyone has an opinion on this.

Most of the answers are about the building. They are missing the real signals.

In practice, the clearest reasons to pass on a commercial deal are almost never about the structure or the condition of the asset. They are about the lease, the vendor, or the numbers under scrutiny.

Walk away when:

The WALE is under 12 months and the vendor has no evidence of renewal discussions underway. You are not buying income certainty. You are buying a re-tenanting project at full price.

The tenant is in a sector under structural pressure. Discretionary retail in a secondary strip. Single-site operators with thin covenant. Secondary office with no flight-to-quality story. The lease can be signed. The tenant cannot always service it.

The personal guarantee is thin relative to the lease obligation. A $300,000 guarantee on a lease worth $1.8 million over its term is not real security.

The vendor is slow to provide lease documentation. The lease is the asset. Delays in sharing it during DD are informative.

The IM yield does not reconcile with what the actual lease says. This happens more often than it should.

None of these are absolute rules. All of them are patterns that show up in deals that look better than they are.

What has made you walk away from a commercial deal?

*This is general information only, not financial or legal advice.*

17/09/2026

WALE is the number residential investors have never had access to, and it is the first thing I look at on any commercial asset.

Weighted average lease expiry. How long, on average, your contracted income runs for, weighted by how much rent each tenant pays.

A four year WALE means you know roughly what you are earning until 2030. A one year WALE means you are about to find out.

Two assets can show you the same yield and be completely different propositions. Seven percent on a five year lease to an established business with a bank guarantee is not the same asset as seven percent on a tenant in holdover who has given notice. The yield is identical. The risk is not remotely comparable.

This is what people mean when they say commercial is about the lease, not the building. You are not really buying a warehouse. You are buying an income stream, and the lease is the only thing that tells you how long it lasts and how likely it is to keep arriving.

In residential you get a rental ledger and a four week bond. In commercial you can read the tenant's financials, check the covenant and hold a bank guarantee worth three to twelve months rent.

Once you have seen that difference it changes what you think you are buying.

16/09/2026

Since the SMSF borrowing rules changed, the question I get most is whether a particular property counts as business real property.

I cannot answer that for your specific asset. That is a legal test and it belongs with your accountant and your lawyer. But here is the general shape of it, because the confusion is costing people time.

Business real property means land and buildings used wholly and exclusively in a business. Wholly and exclusively is doing a lot of work in that sentence.

A warehouse leased to an operating business is usually straightforward. So is a suburban consulting suite, or a workshop.

Where it gets difficult: mixed use premises with a residence upstairs. Vacant land with no current business use. A building that has kept its residential character even though a business operates from it. Properties with a genuine dual purpose.

There is a carve out for primary production land. A homestead does not automatically disqualify the property if the residential area is under two hectares and the predominant use stays primary production.

None of that is advice, and none of it is a ruling on your property. It is the categories, so you know what you are looking at before you spend money finding out.

What is the strangest asset you have seen someone try to argue was business real property?

16/09/2026

EV chargers are now a commercial lease negotiation point.

Good.

Tenants in logistics, fleet management, and manufacturing are increasingly requiring three-phase power and EV charging infrastructure as a condition of leasing. 22kW minimum supply capacity. Enough bays to charge a commercial fleet overnight.

The buildings that do not have this are getting passed over in some markets.

What this means for buyers: power specification is now part of the site assessment. Not just the age of the switchboard. The actual supply capacity and the cost to upgrade it. An industrial building with single-phase supply and a tenant requiring three-phase power is a capex conversation before it is a yield conversation.

Assets that are already power-ready, or have recently upgraded, are attracting tenant quality that was not accessible five years ago. That flows through to covenant strength and rent premium.

It is not yet fully priced in at the sub-$3M end of the market. Which means buyers doing proper site assessments can find the gap before others do.

What specification are you seeing from tenants in your industrial market right now?

*This is general information only, not financial or legal advice.*

16/09/2026

Buying your first commercial property. Here is the sequence that actually works.

Month 0: sort structure before you look at anything. Which entity (personal, trust, SMSF)? Finance pre-approved at commercial LVRs of 60-70%? Brief locked: sector, yield floor, WALE minimum, geography.

Month 1: search. Listed stock first. Agent calls for pre-market. Focus on vacancy rates and cap rate trends by precinct, not just suburb.

Month 2: due diligence. Read the full lease. Check WALE, option dates, make-good obligations, rent reviews, outgoings structure. Lease review from a solicitor. Building inspection. Zoning check. Run the 12-month vacancy scenario.

Month 3: negotiate, exchange, settle. Commercial settlement timelines run longer. Plan for it.

First-time commercial buyers hit the same friction points: finance delays, lease surprises, settlement risk. None are dealbreakers if you plan for them.

*This is general information only, not financial or legal advice.*

What tripped you up on your first commercial deal? Happy to help here.

14/09/2026

Something changed on 10 August that a lot of SMSF trustees have not caught up with.

New borrowing by a super fund over real property is now limited to business real property. If your fund was planning to borrow to buy a house or a unit, that option has closed.

What has not changed, because the misinformation on this is already thick:

Existing arrangements are grandfathered. Refinancing an existing one is still permitted. A fund can still buy residential outright using its own cash. The restriction is on borrowing, not on owning.

And it does not apply to commercial. A fund can still borrow to acquire business real property.

For a business owner who has spent years paying rent to a landlord, that quietly changes the maths on owning their own premises through super.

Two things I am not doing here. I am not telling you to set up an SMSF, and I am not telling you what it means for your tax position. I am not a registered tax agent and I do not hold an AFSL. This is what the legislation says. What it means for you is a conversation with your accountant.

The property side is where I can help. If you are working through whether a commercial asset stacks up, that part I can run with you.

10/09/2026

Make-good. Break clause. Incentive period.

All in the lease. Most buyers never read any of them properly before they sign a contract.

Make-good: at the end of a commercial lease, the tenant is typically required to return the premises to base building condition. On a large tenancy, make-good costs can run $50,000 to $200,000 or more. Who bears that cost, what standard is required, and whether a personal guarantee backs it — confirm in due diligence, not after settlement.

Incentive periods: landlords frequently offer rent-free periods or fitout contributions to attract tenants. These can represent 12-18% of the total lease value and do not appear in the headline yield. A 7% gross yield with a 12-month rent-free in year one is a different investment than it looks on the information memorandum.

Break clauses: some leases give tenants the right to exit before lease expiry. If exercised, you are back to vacancy, re-tenanting costs, and fresh incentives — before the WALE you underwrote has run.

Read the lease. The whole lease.

Save this — these three items come up in every commercial DD we run.

This is general information only, not financial or legal advice.

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