commercial property

[Russwhitehouse]

As the title says. I already have some residential properties, both students and young pro's, but am considering diversifying into commercial as well. Interested to hear from other folk with experience in the sector, pitfalls, do's and don'ts etc. Most likely area will be in the south west.

[PurpleMoonlight]

It's good if let and tenant paying the rent.

It can be a killer if empty and you have to pay the rates!

[Vocal Minority]

Familiarise yourself with how commercial leases work. They are very different to residential ASTs with a lot more measures in place to protect tenants.

Location is important as, as has been said, Voids can be a killer in terms of costs - business rates, insurance etc - the better located the easier a re-let will be.

What sort of building are you after, what return, what location, what budget? The options can be pretty broad if you have a blank canvas requirement.

[Jockman]

The obvious one...Buy it with your SIPP and rent it out to yourself if possible.

All depends on how you intend using it.

[Russwhitehouse]

I'm keeping my options open with regards to the type of building, but industrial units tickle my fancy. My current portfolio is situated in Plymouth, so it would make sense to keep things in that part of the world, but it is by no means a requirement. Keeping things as simple as possible however, is. Budget is around £200,000.

[mel]

Pros: can be bundled into your pension portfolio, can register and charge VAT which means more work but you can then reclaim the vat on some of your costs (double edged sword), normally full maintaining so no phone calls for "my boilers gone out" at 4 in the morning, if it goes wrong and you're not paid it's much easier to evict and take possession, tenants are normally longer term with leases in years.

Cons: rents haven't gone up that much compared to residential, they hurt like hell when empty, dilapidations can be a nightmare, tenants are normally more "business savvy" (which can go either way), Everything costs more - It's like mentioning the word "wedding" when booking something, the word "commercial" seems to have the same effect.

[Rangeroverover]

I'm not too far from you, we manage about 300 student spaces and some normal resi. My background is in commercial, your problem will be getting into the better deals. Most commercial agents have pet clients they offer the good stuff to first.

Best bet is to offer a finders fee to a hungry commercial agent, have him out looking, if you want a couple of names in your area PM me