Most property investors start with residential. But for those with an existing portfolio and a desire for stronger yields, commercial property offers a compelling alternative — one that many investors simply don’t know how to approach. Krunal came to Lagos Financial with a portfolio already in motion and a question that many experienced investors eventually ask: “Should my next move be residential or commercial?”
The Challenge
Krunal owned his primary residence (valued at approximately $1.5 million) and had recently committed to a Sydney apartment purchase due to settle in the coming months. He had $300,000 in available equity but needed to earmark $100,000 of that for the upcoming apartment settlement — leaving $200,000 to work with for his next investment move.
He was weighing up residential versus commercial property investment but didn’t have a clear framework for comparing the two. He needed both strategic guidance and practical loan structuring advice before he could commit to a direction.
Our Strategy
Over six months of detailed discussions, Victor walked Krunal through the mechanics of both asset classes — yields, financing differences, risk profiles, vacancy rates, tenant quality, and long-term growth potential. This wasn’t a quick transaction; it was an education-first approach to help Krunal make a genuinely informed decision.
After a thorough analysis of Krunal’s goals, Victor recommended pursuing commercial property, structured under a trust or company entity. The reasoning: commercial assets typically deliver higher rental yields than residential, tenants are generally responsible for outgoings (reducing the landlord’s net costs), and a corporate structure can optimise tax treatment and protect personal assets.
On the financing side, Victor reviewed Krunal’s existing loan on his primary residence — a $300,000 renovation loan at 5.5% on principal and interest terms. Krunal hadn’t fully accounted for the total cost of this setup. Victor outlined how switching to interest-only repayments on the investment-related portion could improve cash flow and explored refinancing options to reduce the overall cost of his debt. A comprehensive borrowing power analysis was prepared, mapping out funding worksheets, cash flow estimates, and equity allocation across all of Krunal’s existing and planned loans.
To help with due diligence on the commercial side, Victor connected Krunal with experienced commercial buyer’s agents who specialise in helping first-time commercial investors identify and assess suitable properties — an often-overlooked but critical part of entering this asset class successfully.
The Outcome
Krunal now has a clear and structured pathway for building a commercial property portfolio. His equity is strategically allocated — $100,000 set aside for the apartment settlement, $200,000 available for the commercial purchase — and his existing loan structure has been reviewed and optimised to improve cash flow without undermining his borrowing capacity. He has the professional support network (broker, buyer’s agent, and financial analyst) needed to assess commercial deals with confidence.
Krunal shared this review of his experience:
“The services of Victor are impeccable, and his knowledge of both residential and commercial properties is professional-grade. I started conversations with him six months before even deciding to start my investment journey. I was confused between residential and commercial, and he was more than helpful in guiding me on the path to take and the different ways to structure investments. I trust Victor with all my past and future loans.”
Key Takeaways
- Commercial property offers higher yields, but requires different financing. Commercial loans typically require a larger deposit (often 30–35%) and are assessed differently by lenders. Understanding your borrowing power in this context before you search is essential.
- Structure matters before you buy. Whether to purchase through a trust, company, or personal name affects your tax position, asset protection, and future borrowing capacity. Getting this right at the start is far easier than restructuring later.
- Allocate equity deliberately. With multiple commitments in the pipeline, mapping out exactly how much equity is reserved for each purchase ensures you don’t overcommit — and don’t leave money sitting idle that could be working harder.
Could This Strategy Work for You?
Every client’s situation is different. Lagos Financial works with 60+ lenders to structure the right solution for your goals. Book a free strategy session to discuss your options.
About the Author
Victor Lagos is a licensed mortgage broker (ACL 546774) and founder of Lagos Financial, with close to 20 years of finance industry experience since beginning his career at Bluestone Mortgages in 2006. A member of the Finance Brokers Association of Australia (FBAA) since 2015 and the Australian Financial Complaints Authority (AFCA — 98399), Victor helps Australians build wealth through tailored home loan and property investment strategies, working with 60+ lenders nationwide. Last reviewed: March 2026.
Victor Lagos
Founder & Mortgage Broker, Lagos Financial
Victor Lagos is a licensed mortgage broker and property investment strategist. As founder of Lagos Financial, he helps Australians build wealth through tailored finance solutions, working with 60+ lenders nationwide. He also hosts the Debt to Financial Freedom podcast.
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