7. “Commercial property is riskier than residential property”
This is a broad generalisation which should not be a guiding principal for investors. A well located retail showroom with a long lease and annualised rental increase could be a very sound investment. While the property may not see an increase in value during a downturn, the long term lease will help to ensure reasonable returns during this period.
Conversely, the marketers of a new residential unit development in an inner city area may claim to offer a risk free investment. However a large amount of units may be in development in the area and could quickly lead to an oversupply. Commercial and residential properties should be evaluated on their own merits.
