If you have the funds available, building a commercial property portfolio can be a savvy business investment. Despite a recent dip in demand for retail properties that reflects tougher conditions on the high street, demand for other property types – industrial space, for instance – is on the up, according to the latest RICS report.
Whether you’re looking for commercial properties for sale as part of a broader business proposition or want to buy with a view to establishing a rental income stream, you should be able to find something to suit. If you’re buying a business that includes a property acquisition can make it a less risky, more attractive investment: the intrinsic value of property often makes it easier to secure funding at the outset and will provide ongoing opportunities for leveraging finance in the future. Commercial property is one of the best long-term investments, too, as values and rental returns track inflation and can deliver handsome returns over time.
The business of handling your commercial property investment will mostly come down to managing the legal process when initially letting the premises or conducting a rent review and there are plenty of benefits to choosing to invest in commercial property, as opposed to residential. The stamp duty land tax is lower, for a start, and, as commercial property is often purchased already leased and tenanted, an income stream is assured. Lease terms also tend to be longer, offering greater security and enhancing the value of the investment.
Due diligence is essential when looking at a commercial property with a view to buy. It’s important that you take the same methodical approach to buying a commercial property as you would to buying any business. Ensure that the property has been well maintained and ask to examine the seller’s accounts for the last three-to-five years. If you’re buying a tenanted building, check leases carefully.
