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🎧 Real deals, real strategies, real results. Learn how to find, fund, and operate profitable property plays from someone who’s actually done it.
Hosted by Andrew Wright, principal of Professionals Southport and a commercial investor who rebuilt after losing a ~$15M portfolio during the GFC, this podcast gives you a straight-talking look at what it really takes to build wealth through property.
Each episode delivers practical frameworks, real deal breakdowns, and honest conversations with high-performing investors and operators across residential and commercial.
But it’s bigger than the episodes. The goal is to build a community of like-minded investors who share stories, swap insights, help each other grow and maybe even do deals together.
🔗 Join the community & learn more - leave your email at: www.andrewwrightproperty.com.au
📍 Connect with Andrew: hello@andrewwrightproperty.com.au
I gave away nearly $2 million in rent to my landlord before buying my business premises.
Why do you think so many business owners never consider buying their own premises?
It actually perplexes me why most business owners don't. The best decision I ever made in my lifetime from an investment point of view was a decision to buy my own office premises.
Why not upgrade yourself from a tenant to a landlord?
And be your own tenant. Be your own
tenant. You might be happy to pay eight grand a month rent, but are you happy to lose a million dollars- Over ... in rent over the next 10 years? And that's where I say the maths is ugly, because that's what happened to me twice.
Yeah. Eliminate the vacancy risk, and the exciting thing about this, which we'll cover shortly, is
Hi, I'm Andrew Wright, principal of Professional Southport, and this is the Andrew Wright Property Podcast. I've built a multimillion-dollar property portfolio, delivering a seven-figure annual rental income, and led my real estate team through thousands of sale and lease transactions. In each episode, I share real deals and strategies that will help you find, fund, and operate profitable property deals.
The aim of this show is to provide education and build a community of like-minded investors who can collaborate, share insights, and help each other in each other's journeys. You can make excuses or you can make money, but you can't do both. So come and join us
Hello, and welcome back to the Andrew Wright Property Podcast. Now, today we're talking about one of my favorite wealth creation topics for business owners. It's called The Business Owner's 9-Step Guide to Buying Your Own Premises. Now, most business owners spend decades building somebody else's wealth by paying them rent.
But as Andrew will tell you today, many business owners could own the building they operate from without drastically changing their monthly cashflow. Andrew's done exactly that, not once, but twice. Today, he's gonna walk us through the exact nine-step process he followed using his own commercial property purchases as real-life examples.
Andrew, welcome back to the studio.
Mr. Sniffles, how are you?
Yes, I'm okay. I'm okay. I'm getting through. Just. Just. But, uh, you've been away. You've, uh, had a little bit of a break- Oh, yeah ... in the, in the Philippines.
Yeah, I go away every, uh, 10, 10 to 12 weeks for a 10- Yep. How
was it? Good?
Yeah. Awesome, mate. Yep.
Just went to a little beautiful island called Bohol and sat there on the beach and, um, had a beautiful time, thank you.
Lovely. Lovely. Fantastic. All right. Let's get down to it Why do you think so many business owners never consider buying their own premises? 'Cause it's not something most think of. They go and look and find somewhere to rent
Mm.
Answer to that, it actually perplexes me why most business owners don't. And as a real estate agent and an owner of a franchise, if you like, in the professionals group, it blows me away every year when I go away to conferences to know that even two-thirds of bosses of real estate agencies don't own their own premises.
Only one in three are the numbers Wow And I just don't get it. I honestly don't get it. So the best decision I ever made in my lifetime from an investment point of view was a decision to buy my own office premises, which we're gonna go through today, and that's the start of my journey, really, into commercial property
Okay
Mm
Because it, it, it is.
I mean, people always think about buying their own home- Mm ... so they don't have to rent.
Mm.
But it's so true that, that the same mindset isn't there for business owners, is it? It's, "Let's go and find that place that suits for me to rent," and it just goes straight in as the expense
Yeah, well, even I'm guilty of it, Adam, and I gave away nearly $2 million in rent to landlords when I could have had my own premises.
So we'll go through those numbers today Um,
imagine that, what that could be doing to your, your already impressive portfolio now Yeah,
exactly
All right. So today we're following your nine-step process, your nine-step plan. So step number one, well, the question is, should you buy your own premises? Should every business owner buy their own premises?
I think eventually the answer to that question is yes, but I would say people that are self-employed probably shouldn't go and buy their own premises, particularly in the first two or three years of setting up a business. So, um, with the strike rate of businesses going broke, uh, in this country and others, you really need to develop your cash flows and security in your business before you make a decision to buy.
And- Most of the time when you buy an office premises, you're gonna be getting a full doc loan, and you're gonna need two or three years of financials anyway before you can get your finance approved. So someone starting out at, all gung-ho and, uh, starting out a new business that might be super optimistic wanting to buy a premises, probably should not consider buying their own premises until they've got two or three years of solid financials behind them.
Yep. You wanna know that you've got a solid business to start with. I mean, the last thing you wanna be left with is a, is a mortgage, um, if your business goes down the, the tube, uh, depending o- obviously on being able to get new tenants in there, et cetera. But, uh, so other than someone new to business- Yeah
who, who shouldn't, who else shouldn't buy?
Well, I'd also say probably even if you have got a reasonable business, I also probably wouldn't buy your own premises unless you've got a 5 to 10 year outlook of continuing that business. So some people might be building a business to go and flick after five years.
Um, the, the whole benefit of this strategy is you can go home to your partner and say, "Look, I've just bought a business premises. We've got no tenancy risk for the next 10 years."
Mm.
That's the, you know, that's the, the big risk minimization covered with buying commercial property, because you're gonna be your own tenant.
So if you're- Absolutely ... building a business to flick it off in a couple of years' time later, that's another example where you probably wouldn't buy your own premises.
Mm. So having a clear exit strategy- Mm ... knowing what that is-
Yep ...
is a, is a big point to think about before buying
your premises. Or having a number of different exit strategies.
So it might not necessarily be selling. It may well just be that if the premises is in demand in the marketplace and you can just rent it out to someone else, that might be your exit strategy when you retire or sell your business.
Mm. Okay. Now, I've often heard you say that the maths is ugly for tenants.
What do you mean by that?
Best explained through my own example. So the first commercial property that I bought for my own business was a 527 square meter office in Southport. Now, prior to purchasing that, I was paying $130,000 a year rent in level 13 of the corporate center at Bundall, looking over all the water of the Gold Coast and the, the racetrack and all that sort of stuff.
So flashy office, but I paid nearly a million dollars in rent at the corporate center in Bundall before I bought my first office premises, uh, in Southport. So- It's very easy when you're paying $8,000 or $10,000 a month in rent as a business to just keep paying it every month. It's a, it's tax deductible. Uh, the benefit of leasing also is there's a bit of flexibility if you need to expand or change location.
But at the end of the day, if you break it down, I encourage people to think on a, a one-decade view. You might be happy to pay eight grand a month rent, but are you happy to lose a million dollars-
Oh ...
in rent over the next 10 years? And that's where I say the maths is ugly, because that's what happened to me twice.
I spent nearly a million dollars there before I bought my first one, and then when I moved out of my financial planning industry into real estate, I thought I needed a street frontage because that was the That was the business model- At that time, yep ... at that time, was you've got to have a street frontage- Mm
so people know where your real estate office is.
And they'd look at the, the pictures in the windows.
Yeah, you've got to have the- Yep ... signage and the window cards displaying all the properties and all the rest of it. And in between property number one and number two, I also went and paid another million dollars of rent at number 16 Nerang Street because I needed a street frontage before I went and bought my next property.
So on two occasions there, I wasted nearly a million dollars in rent before buying my own business premises. And that's what I say, the maths is ugly as a tenant. And for the majority of people, if you can last the first three years in business and you wanna continue in that business and you have a long-term outlook, why not upgrade yourself from a tenant to a landlord?
And be your own tenant.
Be your own tenant. Yeah. Eliminate the vacancy risk. And the exciting thing about this, which we'll cover shortly, is the monthly cost of owning the property is often exactly the same-
This
is what- ... as the cost of your leasing ... this is what,
already in my head, and I know it's coming, but, but, you know- Yeah
that you can b- you can end up owning this thing and, and paying yourself ef- effectively a million dollars. Um-
Yeah, and over the 10 years, the property might just double in value as well.
Oh.
Yeah.
Jeez. W- what an idea. What an idea. All right, so number one, work out whether it's right for you based on a number of those factors.
Yeah. Number two, speak to a finance broker.
Yeah, you've got to know what your borrowing capacity is. And once again, that discussion with your finance broker or bank will probably, uh, cover the situation we just covered before, who shouldn't buy, and it's those people that have only been in business two or three years that probably won't be able to get the finance for good reason.
Mm-hmm.
So knowing how much you can borrow, as I mentioned, if you're buying a single tenant property, it's almost certainly going to be a full lease doc loan, which is gonna require one or two years of profitable figures-
Yep ...
in your tax returns. However, they will be able to do an add back on y- on your financials of all the rent that you've paid- Sure
because you'll no longer be paying the rent.
So that comes out as
an expense, and that's- That'll be, that'll be going to interest.
Yep. Yep. Understand. Mm. Okay. And look, I do wanna make that point. I mean- Mm ... hopefully everyone who is listening to this podcast does know the value of a finance broker. Um, having spoken to a friend of mine just the other day and offering to give her a, a referral- Mm
to, um, a finance broker. "Oh, no, I've dealt with my bank my, for 20 years. I, I trust my bank manager." Mm. And I, I just, I just shook my head just a little bit and just said, "Well, he's got about four products to choose from. My broker's got about 60." But anyway, um-
No, I agree 100%, Adam. And let me tell you, I, I, I tend to swap banks every three or four years with loans because- Banks will often offer discounted rates for new business
Absolutely
And I've been loyal to one bank for 25 years, and even when I ask for a discount, sometimes they won't.
So they, they're not loyal to you- No, they're not ... you don't need to be loyal to your bank.
They're not. Absolutely. Okay. So what's different in commercial lending compared to, um, you know, buying a home?
Well, LVR is the main issue. So, uh, typically you only need a 5 to 20% deposit to buy a house. But with commercial property, usually it'll be 30 or 40% deposit required.
But for this particular strategy, owner-occupier, there are some banks that will allow you to put in just a 20%- Okay ... cash deposit. So
it can come down for this type of scenario.
It can, but it could also be 100% loan. If you have your own residence, residential security that has enough equity in it- Sure ... you can possibly borrow 100%, which is what I did.
So this does look different to buying for, for, you know, w- we've got a different strategy in mind.
Absolutely.
Okay. Mm-hmm. That's, that's a very interesting point to, to note that probably a lot of people don't think of. Maybe, you know, they've listened to this podcast and, um, you know, heard you speak about- Mm-hmm
you know, deposits and, and what you need, LVR, um, and not r- so never thought of this one where it can be quite different and the deposit could, could potentially be much, much lower. Okay, so number three is get your structure right, and you've talked about this- Yeah ... quite a bit in other, other deals. Talk me through it in, in terms of, in terms of this today.
Yeah, look, it's so important. I mean, even, uh, just as recently as last month with these proposed, uh, budget changes where they're talking about taxing discretionary trusts at 30% now, um, it's more important than ever that you get accountant advice about the right structure to use. Now, going forward, it may well be that company structures are used Rather than trust.
So I d- I don't know how the legislation's gonna pan out, but you need to get your accountant's advice on that. Self-managed super funds also, um, provide an exemption where you can actually purchase a commercial property in your super fund, and you can actually rent that commercial property from your self-managed super fund.
You can't do that with residential property. Yep, I
have heard about that one, yeah.
And, and, and guess what? Two days ago, the Labor government just came out and said they're gonna abolish lending in self-managed super funds for residential property.
For residential.
But they've left the door open for commercial property.
Right. So that strategy- That's still an option ... going forward is still going to be
a good option. So talk to your lawyer, talk to your accountant, t- talk to your financial planner- Yep ... about what structure looks best, whether that is an SMF, you know, one of those self super- A self-managed super fund or company, yeah
yeah,
or a, or a company or whatever, or whatever that is. Yeah. So, um, always important and probably really important to do that before, do it before you go into any deal- Absolutely ... not afterwards. Um- Absolutely. Yep. Fantastic. All right, number four, build your buy box.
Yeah.
What does that mean?
Well, to me, a buy box is your little Excel spreadsheet where you type in all the things you're looking for in a property.
Now, when I say define your niche, you need to look at what area you're looking to buy a property in. If it's for your business, it's probably gonna be in a geographic range within a couple of kilometers of where you're leasing now. So you've got to define the location you want. You've got to define how many square meters does my business need.
So you'll be leasing a property now. You'll know how big your office or your shed or your retail shop is. You've got to allow for future plans and build your buy box on the type of property you wanna buy based on how many square meters you need How much car parking do my staff need? Is there enough car parking for my clients to be there?
Do I need an elevator? Do I need street frontage, or can it be on the second or 10th level of a high-rise building? Uh, you've got to take into all, all those considerations in your buy box as to exactly what your business requires. And to me, my initial thoughts when I was at the corporate center at Bundle is, "Okay, I need to buy somewhere reasonably close to Bundle," because all my referral sources, all the accounting firms that sent me clients and all my clients were at- Were there, yep
within, uh, five kilometers of that distance, and I decided to buy in Southport, uh, when an opportunity came up. It met my buy box. I had plenty of car parks there. I actually bought a property that was bigger than what I needed because my business had grown very quickly over the previous 10 years, and I wanted to buy a little bit extra space to provide the capacity to employ more staff.
Great. Sure. How did your own buy box change between your financial planning business and your, your real estate business?
Well, it, it didn't change apart from the type of property. So my first one was a second level, uh, 527 square meter office on level two of the Pivotal Point building in Southport. The f- when it came to the real estate business, I needed street frontage.
Uh, so that was the big change- Yep ... that I just needed somewhere where there was lots of traffic, somewhere where I could put all these LED window cards out the front that lit up at night- Mm ... and people walking past it, "Oh, have a look at that property," in the window. I couldn't do that from the second- Mm
level of a high-rise building.
And for those avid listeners of this, um, podcast, all of our, a, a lot of the, uh, episodes interlink, and if you do wanna find out what- Mm ... eventually did happen with Nerang Street and, uh- Mm ... h- a little, uh, thing that happened upstairs, go back to- Mm ... I think probably episode two or three, around about there, 'cause that's a very interesting story, that one.
Mm. Um, okay. So know your market Number five, know your market. What do you mean by that?
Well, you've got to be an expert. Uh, and once you do get your buy box, you work out where you're buying, what type of asset you're buying. Is it an industrial shed? Is it an office? Is it a retail premises? I encourage everyone to get excited, go out and start looking at property in that location that you're wanting to buy in that particular asset class.
Know the last five comparable sales down to a T. How much per square meter they paid, how many car parks it had, what was the land value, what was the last tenant in that property paying as a leasing rate per square meter? Know your numbers backwards. Become an expert just in that one little niche.
I love that.
Mm. So that's something, again, I'd never really thought of, and take someone like yourself who's very experienced at this.
Mm.
Get your buy box together, know exactly what you want.
Mm.
Then go and know the last five things that have sold backwards- Yeah ... before you even start looking at what's on the market.
Absolutely.
And then you know exactly where, where you're at- Yeah ... because that's exactly what the agent is looking at when they're trying to sell it, um- Yeah ... and pricing it and, and everything else. So, um- Mm ... I love that. Work backwards. Start with the... Start, don't... It's blow, it blows me away because, uh, it just challenges the mindset of y- of y- of your lay person.
My mindset says, "No, go out and find your, your place, then go check the comparative sales."
Yeah, yeah.
Yeah.
Yeah, no, you gotta know your numbers. I love- Particularly, like, a lot of commercial properties are at the higher end of the, um, you know, people are s- looking to spend some money. You know, we're talking, in my case, the first one was over $2 million a- and the second one was $1.8 million, so you're talking pretty big money.
Mm.
You don't wanna make a mistake on the numbers. Put in the effort, become an expert in your little niche-
Yep ...
and make sure you don't pay too much.
Okay.
From a cash flow point of view, when I was doing my numbers, Adam, it was pretty simple. When I was paying 130 grand a year rent at the corporate center at Bundle-
Yep
at a 6% interest rate, I could borrow over $2 million and still have the same cash flow. Yeah. So why would I put that 130 grand a year into my landlord's pocket-
When- ...
when I could borrow over $2 million and buy my own property?
That's it.
And the other thing it does, which I haven't put down in these steps, is it just makes you as a business owner more committed.
When I moved out of that rental property into my own, I was so proud that it's like moving into your own house. Wow, this is my property. And it gives yourself a sense of, well, I'm committed to my business now. I can't wait to pay this asset off and own it myself. Mm.
Mm.
My wife at the time also got so intimately involved with the architecture because we bought an empty shell of 527.
She worked with the architect to plan all of the fit out, where all the rooms were gonna go. We got- We were so proud of it.
Yep.
Imagine how proud you might be when you buy your first one or $2 million premises to move in.
Yep.
You fit it out exactly the way you want it- Want it ... just like you would in your home if you were building it.
Mm. Mm. I can-
It's fun. It, it's exciting.
Absolutely. Absolutely. Mm. Before we move on to six, which is, is your budget for your fit-out- Mm ... which probably a lot of people, "Oh, God, now I've got to fit this thing out." Mm. But, um, just a question back on your, your buy box and know your market.
Mm.
comfortable would, should you be or could you be about, you know, you set your buy box, you've got all your t- your, I need three car pa- parks, I need X square meterage
Mm.
How comfortable should you be with varying that w- you can't find something that fits perfectly, so you, you drop a car park or you ... How flexible should you be, or should you be rigid on what you're after?
No, you should be rigid. Okay. Look, at the end of the day, this might be a once in a lifetime strategy where you're owning your own business premises.
You may never do it again. It's a big investment, and my only suggestion would be buy a little bit more than you actually need-
Mm-hmm ...
and if need be, implement the commercial house hacking strategy that I mentioned in a previous podcast where even in- Su-
sublet ...
You sublet, and that's exactly what I did in this 527 square meter office I built, I bought.
It was a little bit bigger than I needed because I knew in the future I wanted to expand, so I subdivided 126 square meters off and I got an extra 50 grand a year rent next door. But I always had that there knowing that if my business expanded, I had the space that I needed in the future.
Okay. Number six, budget for fit out.
Now this is a biggie, isn't it? Mm. Um, because you really should go and do all your numbers on your fit out before you make the deal as well, shouldn't you?
Yeah, well, exactly right. So unfortunately, what happens is when you go to buy a property, you see a finance broker and it's okay to get $2 million approved for a loan, but very, very rarely when you purchase a property for your own premises will it be turnkey ready and everything's exactly the way you want it.
Mm. It may well need a change if it's an office. It might be, you might, your business might require a change if it's an open plan, you might need to build little offices in there. If they're all offices and you need a open plan because you're a training provider or something, you may need to knock down the walls and rebuild.
If it's a retail shop, it'll probably need a cosmetic upgrade and even if you go into a very specific place like a, um, let's say a hairdresser's place, if a, if a hairdrel- dresser is selling a property, the fit out might already be there, but it might need, might need to be redone if it's old.
Mm.
If it's a cafe, the grease trap might need replacing.
They're $30,000 hits. So you've gotta have, as well as the purchase price, you've gotta know your numbers and set aside some money for a fit out
Yep. How does someone go about working those out who hasn't done it before? You know, they find the right-looking property, but they, they know they're gonna need some work done.
Mm-hmm. How do they go and get those numbers quoted and done before they go and buy the property?
Well, probably talk to your accountant in the first place, and accountants, uh, deal with all types of businesses, and their other clients may have recently done those types of things. So if you don't have a builder that you can call up and get a rough quote, have a chat to your accountant, and that's where your team comes in handy to get some rough ideas.
But look, you can use ChatGPT right now if you want a rough idea, how much is a grease trap on the Gold Coast in Queensland of a certain size- Yep ... and it'll spit out $30,000. How much does it cost to, uh, repaint, recarpet X amount of square meterage? Um, it'll come up with some pretty rough numbers.
Yep.
You can do that in five minutes at home.
Okay, so how could you afford, and how can you justify spending $500,000 on the fit-out of the first premises you bought?
Uh, yeah, so that, that particular one w- that I bought, it was actually an empty shell. So it was the last two offices remaining in a building that was sold off the plan, and it was- Lots 204 and lots 205, and when I went to inspect it, it was just concrete on the floor, concrete poles, and a concrete ceiling.
So I actually had to build all the walls and the flooring, and we even had to put in all the fire sprinklers and the whole box and dice just to be compliant. So that was all factored in, uh, to the figures when I purchased it. The purchase price at $3,000 a square meter was, uh, 1.6 something million dollars and, uh, I, I knew the numbers that we needed to spend about $500,000 on the fit out to- But-
to make it ready to go.
But it still, the numbers still worked.
Well, uh, at $130,000 a year rent saving, uh, 6% on two million is 120.
Mm.
I mean, I was still better off spending all that money and, uh, putting that, uh, rent towards my own building.
Absolutely. Just, i- a thought has come to me as you, as you've said that.
Have you or do you recommend, uh, when the numbers do stack up, that you can go into this with an interest-only loan?
Look, everyone's circumstances are different. Talk to your accountant about that. I mean, that particular property I paid principal and interest on. In fact, I nearly had the whole thing paid off shortly after I moved out of there to my real estate business.
I, I leased it out to the QHealth, and I was getting approximately 10% gross rental return on that premises, the larger portion to QHealth, and I had 50 grand a year coming in from the smaller office next door to a, a legal practice. I decided to pay principal and interest at that point in time, but recently I've changed my tact and moved all of my loans to interest only, nearly all of them, because I wanna get as much debt as I can, um, and, and, and build a, a big portfolio.
So talk to your advisor on that. I'm not sure that there's a right or wrong answer, but for me, I'm now-- I did do principal and interest on that one-
Mm-hmm ...
but I'm now moving-- I've moved all, nearly all of my loans to interest only- Interest only ... because I actually want more debt.
Yep.
I know that in 20 or 30 years' time, a million dollars is gonna be a lot easier to pay off than it is now.
Absolutely. Absolutely. All right, step seven. Now, if you've listened to other podcasts, you will have heard Andrew talk about this before, but look for value add opportunities.
Yeah.
What sort of things are we looking for?
It depends on the premises. So the first property I bought there was, uh, that office, and it was unfortunately, the one mistake I made was I bought in a body corporate environment in a high-rise tower, and there wasn't a whole lot of value add opportunities.
The second property I bought, at 36 Nerang Street, was a freehold property, and there was plenty of value add there. And it had an upstairs section with three offices that became empty, and I converted that to an eight-bedroom, eight-bathroom boarding house that now generates $135,000 a year in extra cashflow in addition to the, the ground floor rent.
So that was a massive uplift. Every asset class is different, but I made a mistake with my first acquisition for my business premises, buying an office in a high-rise building with body corporate fees where I need body corporate permission to do anything.
Mm.
And it had no land that I owned outright. And that cost me just over $2 million to buy that thing.
It's worth nearly $3 million now, but I bought it in 2005, so over 21 years it's actually been a terrible investment choice compared to had I have bought a $2 million freestanding office in Southport, it would be worth $6 million now. Mm.
Mm.
But it was still the best decision I ever made because it got me into the commercial property market.
Yep.
Okay? And, uh, it made me commit at, at that time to paying down that loan. And over a period of time, um, that's been the launchpad for me to go and not make that same mistake again and buy a whole heap more commercial properties that are freehold. That's the only one- Yeah ... I've ever bought with body corporate- Sure
because of that mistake I made.
Okay. So a big takeaway for me there is freehold is important for value add opportunities because you don't have to, um, get permission from anyone else. As long as you can find what you wanna do-
Yes ...
and it's obviously legal- Yes ... and you can get the right approvals- Yes ... you can go ahead and do it.
You don't have to go to the body corporate, who will probably say no.
Yes. But having said that, there are a lot of listeners that may not have the capacity to buy freehold. They may not be able to borrow $2 million- Mm ... Adam. So if your borrowing capacity is only for half a million dollars, I'd still encourage you to go out and buy a strata little office somewhere of 100 square meters and own the property yourself.
I'd still encourage them to consider doing that.
We did talk about exit strategies earlier for your business and knowing them before you go into actually buying, uh, your own commercial property for your own premises, but step eight is actually plan your exit.
Mm.
Of the property
Yeah
Okay, so talk me through that.
Who's thinking about how they're gonna get out when they're going in?
Yeah, look, so when I say plan your exit, I mean, in many cases it may not be selling. So when I say plan your exit, I mean an exit from this strategy of being the owner-occupier- Gotcha ... of your own commercial premises. So it may well be that in most cases, if you're building a business in a particular premises, there's a lot of goodwill attached with a commercial property, particularly if it's a retail property where might be a cafe and people have been going there 10 or 15 years.
When you sell that business, they're not gonna wanna move it.
Yep.
So it may well be that if you sell your business, you sign a new lease with the new owners of the business that you've built, and your exit strategy is simply to sign a long-term lease with your own business for five years before you retire, and the new owner of your business becomes your tenant.
So it's not necessarily selling, but I've just mentioned that you've got to have a goal in mind. So Another example where someone may not decide to buy their own business premises, for example, is when they have a very, very specialized business. For example, if, if you bought a large abattoir, for example, and the whole industrial property had equipment in there to cut cows- Cows.
Yep ... um, you can't easily go and find another tenant for that property. No. If you sell your business or that closes down, like it's, it's a very- It's specialized, yep ... specialized asset, and it could sit empty for many, many years. Whereas if you're buying a retail premises on a busy road or an office, um, it's gonna be very, very easy to find another tenant.
So you just need to take that into consideration as a business owner. If you decide to buy your own premises, what happens when you move out? Is it gonna be easy for you to lease out and find another tenant?
Yep.
Otherwise, you might be forced to sell it, and that's okay, but you've just got to have a plan.
Just be on, understand where, where you're headed with it all. Mm-hmm. Love it. All right, the final, uh, the final step, step nine, pull the trigger.
Pull the trigger.
Do it.
Do it. It's the best decision I ever made, Adam. We've done all these podcasts about all these-
Yep ...
you know, made a million dollars here, a million dollars there.
It all started- Like- ... because I had the, the courage-
To buy your own ...
to use this strategy-
Mm-hmm ...
to upgrade myself from a tenant to a landlord, stop paying six figures of rent to some other landlord making him rich-
Yep ...
and start contributing that to my own premises where the cash flows were almost identical.
The rent that I was paying covered the interest payments- Yep ... on a $2 million loan twice. Yep. I was able to claim depreciation on those buildings as well, which gave me further tax benefits. Mm. And hopefully every 10 years I own those assets, there's large capital growth in addition to the, to paying off the property.
Yep. Absolutely. Mm. I mean, it's a fantastic strategy, um, Andrew, and it's got me thinking because, um, I love that we're doing this episode- Mm ... because so many times when you've talked about your commercial property deals and, um- And certain things. What I've come across in my mind, again, the, I'm, I try to come at these podcasts from the layperson's point of view- Mm
but, you know, I might have my wa- walk to work every morning, and you see that empty, that empty spot, and it's been empty f- 12, 12 months. Yeah. And then there's two doors down, th- that's now empty. Hang on. I go through the shopping center. There's been eight tenants through that in the last- Wow ... six years. Oh, geez, I wouldn't wanna be a, a commercial, um, a property owner having to deal with this.
This is what, what just being around without the knowledge and, and knowing, but... And look, we've talked about those risks in other, in other podcasts, but- Mm ... the one today, you've, you haven't got that. If you're backing yourself, if you've got a good business- Exactly ... um, you know, this really becomes a no-brainer.
Yeah,
I, and I, I say again, just everything in, in, in investing, it's not all about money. Just think of the pr- the, how proud you will be as a business owner when you go home to your wife and say, "Oh, dear, well, look, I've decided to buy a property. And guess what? We've got no vacancy risk for the next 10 years- Yep
'cause we're gonna be the tenant."
Yep. "
And by the way, in 10 years' time, it might double in value."
Yep.
You can go out, you can fit it out exactly the way you want it. Your landlord can't say, "I want you to move out at the end of this lease because I'm gonna jack the rent up." Yep. You're in full control of your own destiny.
Yep. And it's, there's no more prouder feeling than owning your own commercial premises, just like your own house.
Okay.
It's not just the money.
So can I test my own knowledge on what I've learnt here today- Mm ... by just, um, running you through what I would do now based on the advice of this podcast, and you tell me if I've got it right?
Sure.
Okay. So first of all, I'd work out exactly what I needed, um, for, for my business premises. So build, build my box.
Yep.
Yep. Okay. Work out and get... Then I would go and research the last five sales, comparable sales, and know those numbers backwards.
In the area where you wanna
buy? In, yep. Then, before I even look at properties, I'm gonna go to my accountant and then show him what it looks like if I find a sale that looks like these comparable, what do the numbers then look like compared to the rent I'm paying now?
Yes. And your finance broker.
And then the finance broker. Um, same, yep, and- Same
time, yep ...
yep. And then you're, then you know where you're at, you know what, what you've got, then hit realcommercial.com.au. Is that the-
That, that's exactly right. The only one thing that I think I've forgotten to mention, Adam, is that people listening to the podcast, if they're going down that track It's almost a certainly good idea if you make an offer to buy the place that you're renting right now if it suits your future needs, because you're already there.
Yep.
You don't have the cost of moving out, and if the property that you're leasing now has served you well in the past-
The fit-out ...
and the fit-out's already there-
Yeah ...
and it's not too small for your f- immediate future needs, make an offer to buy the property y- that you're leasing right now. Now, it's probably gonna be off-market.
It's not on the market, but it doesn't matter. Now, I did this. I was leasing 16 Nerang Street. I went to the owner and said, "Look, I'm not gonna renew my lease when it finishes in six months." I love that. "I'm going to buy my own property. I'll give you the first right now. Would you like to sell this building to me?
If not, that's fine. I'll, I'll move out and you're gonna have an empty property, but I'm giving you six months' notice to do the right thing according to my lease. I've got to give you six months' notice so you can find another tenant. Do you wanna sell?" Now, they came back and said, "No, that's fine." But in some cases it may well be that the landlord where you're leasing may, may wanna s- sell their property to you.
You, you don't,
you don't know unless
you ask. You don't know unless you ask.
Do.
Exactly.
Fantastic. Look, I've absolutely loved this episode because, as I said, I think a lot of people give a huge amount of thought- Mm ... to others to rent or buy a house.
Mm.
You know, with a lot of same principles involved. Mm.
Should I be paying rent to someone else or, you know, um, putting it towards, you know, my own equity in my own home? But they don't think about it with their, their business. Mm. And as we've covered today, through those nine steps- Mm ... um, the, the, the benefits are absolutely there, and there's no reason anyone can't, um, can't do this.
Look, look, I say straight down the camera, if you're self-employed, feel free to get excited about owning your own business premises. It's the best thing you'll ever do
Fantastic. Andrew, thanks once again for, uh, for joining me on the Andrew Wright Property Podcast. Look, we've covered the nine-step framework for buying your own commercial premises.
It's there, follow it. It works, and it will ... It- as Andrew said, if you've listened to his other podcasts, he's done extremely well through all sorts of commercial property deals, but this was the one key thing that got the, the whole ball rolling. So if you're a business owner paying rent, this episode should encourage you to at least run the numbers, okay?
You might discover you're already paying enough to own the building instead. Andrew, thanks, mate. Really loved our chat. And do remember, uh, people out there, subscribe and share, and don't miss this. And if you know anyone else interested in, in property, please do let them know about this podcast. You can contact Andrew through his website, www.andrewwrightproperty.com.au.
And just a reminder, this is all about creating a community of property investors who chat, who work things out together, who help each other, who may even collaborate on deals together, and Andrew would love to hear from you if you're one of those. Andrew, see you on the next episode. Thank
you, Adam. I hope your cold gets
better.
Thank you.
Thanks for listening to the Andrew Wright Property Podcast. This is all about building a community of like-minded investors who can share real-life stories, experiences, and collaborate with a view to helping each other. Join us. Get in touch through the link in the show notes. I look forward to you joining me on the next episode.