Converting Commercial Into Residential – What?


Part of owning an investment property is working out how to get the best returns in any given market conditions.


Sometimes that means actually converting a commercial property into a residential property. So how can you take advantage of this trend?


In the words of one of the world’s most successful commercial real estate developers, Donald Trump; “If you’re thinking already, you might as well think big.”


At least that’s one his more quotable quotes. (There are plenty of others I’d never repeat at the moment – lol)


It goes without saying that once you’ve completed the purchase of a property, the goal should be to attempt to boost its value as well as maximise the revenue it delivers as an investment.


One way to make this happen is to develop the commercial premises into a residential property and either sell or lease the converted accommodation.


The other day I wrote an article about the huge cashflow that can be attained by going down the short term and holiday accommodation path.


It came to my attention after that, that there are plenty of old, run down commercial properties around my area (and by extension, many other areas) which could be better utilised by converting them into nice boutique accommodation.


The most obvious and publicised examples comes from the telly.


Channel Nine’s The Block has run with this concept on more than one occasion, producing excellent financial results for both the network and the contestants.


In 2014, Dux House in the Melbourne suburb of Albert Park – whose previous incarnations had been as a cinema, a church and office space – was transformed into four glamorous residential apartments through innovative renovations. This ‘commercial to residential’ renovation formula was also applied to an office block in inner-eastern Prahran in the next series.


Up here in Byron there’s a number of older shop buildings that would make great small apartments ripe for the short term accommodation strategy.


Finding the right property


Converting commercial buildings into residential developments can be an attractive prospect, but there are a few things to consider before you have a crack.


Firstly, it’s got to be the right commercial property.


As an investor, look for the usual attributes – a great location, access to all the desirable amenities including public transport, cafes, schools and arterial roads.

make sure you do your research and get the help of local agents who may know the area better than you.




For any commercial premises you have earmarked, the next step is to find out if there are planning or zoning constraints, which will affect whether a building can be re-used, demolished or redeveloped.


As with any development ideas you need to chat to the council.


The fun part


Commercial properties, including offices, shops and warehouses, all have the potential to be transformed into contemporary living spaces.


They may offer character and features that newer buildings can’t, making them attractive commercial investments. The cost of converting and renovating can vary hugely, so it pays to do the research and try to source information from comparable conversions.


If there are no comparable, then you need to get a bunch of quotes and try to nail them down on price.


Finding, converting and making money from a ‘commercial to residential’ project is not only possible, it’s exciting.


It can bring out the character of a building and create something extraordinary.