---
title: Should you invest in residential or commercial property?
description: We often get asked is residential property a better or worse investment than commercial property, but the answer is neither.
image: https://www.altusfinancial.com.au/hubfs/Page_Banners/resi.jpg
---

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# [Division 296 tax: what high-balance super members need to do now](https://www.altusfinancial.com.au/blog/division-296-tax-what-high-balance-super-members-need-to-do-now)

From 1 July 2026, Division 296 will introduce additional tax on superannuation balances above $3 million. For many Australians, this will be a marginal change. For high-balance super members, it’s something more significant — a shift that could reshape how sup.....

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## [Should you invest in residential or commercial property?](https://www.altusfinancial.com.au/blog/should-you-invest-in-residential-or-commercial-property)

###### Rod Dickinson

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We often get asked is residential property a better or worse investment than commercial property, but the answer is neither.

Both asset classes can be great investment options, but it all depends on what you are aiming to achieve. This is because they are different types of investments with different characteristics that will help you achieve different objectives.

## Things to consider

- Income stream – what is the likely net income after costs to be paid?
- Value of the property – are you getting a bargain or paying too much?
- Locations & infrastructure – is the property close to schools, shopping centres and public transport?
- Capital growth potential.
- Initial costs.
- Ongoing costs.

## Pro’s

| ### Residential | ### Commercial |
| --- | --- |
| - Can provide significant capital growth over  time - Can have less day to day price volatility than  more liquid assets - Can have significant tax advantages - Is quite well understood by the general community - Can be packaged up relatively simply with  borrowings from banks - Likely to be held longer term by most investors so can work through investment  “cycles” | - Can pay significant levels of income - Can be relatively low repairs and maintenance costs compared with residential, which can be passed on to tenants. - Is often used as an alternative to leasing for business owners - Can lock in long-term leases for security of income.       |

### Con's

| ### Residential | ### Commercial |
| --- | --- |
| - Can have significant maintenance costs - Can be liquid - Can have high transaction costs such as stamp duty, legals and agents fees - Can be subject to land tax. - Dealing with tenants and vacancies can be frustrating | - May tend to have lower capital growth if income  stream is higher - Depending upon location, there could be uncomfortable time periods where the property may not be leased.     |

### Remember to …

If it’s an investment, don’t overpay, it is financial death (as the outcome was to make money) as opposed to a home where you buy the property when you can afford it.

Structuring the ownership is crucial to the long term viability of the investment. Should it be bought in personal names, a trust structure or superannuation? How much borrowing is effective in maximising the return on investment? What impact does ownership have on asset protection strategies and estate planning. These are some of the questions your adviser can assist you with.

Property may be a great investment but make sure the time is right for you.

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