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Why Invest In A Commercial Property?

Posted by Trinder on January 26, 2023

Many Investors talk about the reliability of ‘Bricks and Mortar.’ That is because property is considered an important asset and can be a good way for an ambitious investor to diversify risk in an investment portfolio.

This is because property isn’t typically affected by external factors, for example what is going on in the stock market. So if you have the capital and are looking for a sound investment you can do a lot worse than buying an commercial investment property.

Investing in a commercial property means that if there is a business operating in the property you can charge rent to the owner in the form of a lease to operate in your property. But there are fees to consider when doing this. Firstly you will need building insurance, and there will be maintenance costs, ground and rent charges and letting agency fees if you decide to use a letting agency. The amount of rent you receive after these coasts is your ‘Net Rental Income.’

OK, so you have the capital or funding in place just what kind of commercial property are you going to invest in. There is firstly retail property which consists of a property with a shop or café or other business operating in it. There is office property which is usually made up of a number of business’ operating out of office space. Or there is industrial property which could be a warehouse for example.

Once you have found the right commercial property for you, you can then benefit from the security of a longer lease structure found in the UK compared with Europe or the United States. A lease of 10-15 years is fairly typical. Which means security on your investment which you may not be able to get through other investment opportunities.

There are also things you can do once you have acquired the right property for you. Adding for example living accommodation can mean another rental income stream. Also the more attractive the location the higher rent you can charge. But don’t just take my word for it. Have a look at the fantastic investment properties on the market with Sovereign right on our website. You may find exactly what you are looking for.

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