Residential property | Commercial property | |
Effective cash yield | 2-4% pa | Around 5-7% pa |
Property types | Houses, apartments, flats and townhouses | Office, retail, industrial, healthcare, hotels and storage facilities |
Leases | Short term (typically 1 year) | Long term (typically 5+ years) |
Rental reviews | Upon lease renewal, determined by local market conditions | Most lease contracts have locked-in rent reviews linked to fixed rates or CPI |
Tenants | Individuals | Businesses, ASX-listed companies, government bodies |
Legal protection | Various States' Residential Tenancy Act favours the tenant | Generally, the legislation is balanced between landlords and tenants |
Property costs | Costs are largely borne by the landlord | Majority of costs are borne by the tenant |
Source: APN Property Group - 'The little book of Big Property: An essential guide for commerical property investing'