Buying commercial unit
Discussion
I am considering buying my own commercial unit, as I currently rent one, which is cheap, however, I have been in it 4 years now, and it's paying someone else mortgage not mine!
Are commercial units considered good investments?
Recently sold a domestic buy to let as the house needed a fair chunk spending on it, and I wasn't cut out for being a landlord, at least this way I'd be my own landlord!
Are commercial units considered good investments?
Recently sold a domestic buy to let as the house needed a fair chunk spending on it, and I wasn't cut out for being a landlord, at least this way I'd be my own landlord!
Sometimes yes, sometimes no.
Depends on what is in demand in your area over time. Commercial values can go down as well as up. The owner is liable for the business rates if the property is empty.
Having said that, it is benefits your business at the moment then it's probably a good idea for you.
Pension schemes can buy commercial property and let to your business too.
Depends on what is in demand in your area over time. Commercial values can go down as well as up. The owner is liable for the business rates if the property is empty.
Having said that, it is benefits your business at the moment then it's probably a good idea for you.
Pension schemes can buy commercial property and let to your business too.
Can definitely be worth it, values in my area are approx. 10yrs rent costs to purchase.
Depending where you are and the purchase cost, if you get a decent mortgage you won't be paying any more than your rent costs and you'll end up owning the building.
As long as you buy well, it's a no brainer IMHO.
Don't just go with a Solicitor, make sure you get a good local property surveyor to assist with the purchase, they can negotiate price on your behalf as well as deal with any building issues. Their costs will mostly be paid for through their knowledge and actions.
Whereabouts in the country are you looking?
Depending where you are and the purchase cost, if you get a decent mortgage you won't be paying any more than your rent costs and you'll end up owning the building.
As long as you buy well, it's a no brainer IMHO.
Don't just go with a Solicitor, make sure you get a good local property surveyor to assist with the purchase, they can negotiate price on your behalf as well as deal with any building issues. Their costs will mostly be paid for through their knowledge and actions.
Whereabouts in the country are you looking?
All of my friends who have their own business with premises, own the premises in their pensions. So you buy it with tax free money and rent from your company credits your own pension fund tax free. You can borrow 50% more than you have in your SIPP pension too.
So if you have £150k in your pension pot, it can borrow another £150k so you can buy a £300k property ....and dont forget the tax relief on payments into the SIPP.
Sounds like the most tax efficient way to own your own premises and build up an investment for the future.
So if you have £150k in your pension pot, it can borrow another £150k so you can buy a £300k property ....and dont forget the tax relief on payments into the SIPP.
Sounds like the most tax efficient way to own your own premises and build up an investment for the future.
48k said:
Me too, I've been looking for a couple of years. The market is very slow.
Very very rarely do they come up. When they do they seem hugely expensive.Even when we were looking to rent, the rent was phenomenal. We ended up just outside MK on a great farm, paying roughly half of what MK wanted. Madness.
The whole commercial property market is weird, they seem to be valued (mortgage valuation) at around 10x the rental value. It makes their paper value much less than their actual value, hence free hold rarely comes up for sale. It’s like hens teeth round our way. We have brought 2 , we sold the first to buy the second. But we got unbelievably lucky and got a bargain 4000sqr ft air conditioned unit with 2 car parks for £151k , less than half price due to Tesco’s wanting to shift Units they had hoovered up in the good times, planing to demolish and build supermarkets on. If you can find one to buy , I’d say do it , the mortgage is much less than the rent
I did the same thing about 4 years ago. If you're in business for the long term , yes it's a good investment as property always goes up in value and you're renting anyway. Taxes can be a little unpredictable (there is no cap for commercial properties in the US) and you have to deal with the local authorities who provide certificates for usage which is another tax of sort.
That said, if you buy a space big enough for you and someone else to rent. You'll be your own best tenant and you usually don't have to worry about laws that protect tenants in the same way as you would for residential renters (basically, if they stop paying, you change the locks and keep their s
t until they pay you).
That said, if you buy a space big enough for you and someone else to rent. You'll be your own best tenant and you usually don't have to worry about laws that protect tenants in the same way as you would for residential renters (basically, if they stop paying, you change the locks and keep their s
t until they pay you).cheekymeerkat said:
Do banks want hard cash for deposit or do they accept a charge against the directors property as collateral, ie a 100% mortgage?
Feel free to share what deals you obtained in terms of finance!
Sometimes they say they will but expect extra hassle / charges and delays!Feel free to share what deals you obtained in terms of finance!
bogie said:
All of my friends who have their own business with premises, own the premises in their pensions. So you buy it with tax free money and rent from your company credits your own pension fund tax free. You can borrow 50% more than you have in your SIPP pension too.
So if you have £150k in your pension pot, it can borrow another £150k so you can buy a £300k property ....and dont forget the tax relief on payments into the SIPP.
Sounds like the most tax efficient way to own your own premises and build up an investment for the future.
No it can't.So if you have £150k in your pension pot, it can borrow another £150k so you can buy a £300k property ....and dont forget the tax relief on payments into the SIPP.
Sounds like the most tax efficient way to own your own premises and build up an investment for the future.
A SIPP can only borrow up to 50% of its assets immediately before the borrowing takes place. So only £75,000 on a SIPP value of £150,000.
There is massive demand for owner occupied commercial premises, values for industrial have risen higher than others as there has been very little development since the crash whilst a number of older buildings have been converted to residential or sites redeveloped.
Stuff I have been valuing lately has even been getting towards 5% yield for owner occupied stuff as there’s such a shortage.
Stuff I have been valuing lately has even been getting towards 5% yield for owner occupied stuff as there’s such a shortage.
rufmeister said:
48k said:
Me too, I've been looking for a couple of years. The market is very slow.
Very very rarely do they come up. When they do they seem hugely expensive.Even when we were looking to rent, the rent was phenomenal. We ended up just outside MK on a great farm, paying roughly half of what MK wanted. Madness.
Edited by 48k on Sunday 14th April 11:47
Squiddly Diddly said:
bogie said:
All of my friends who have their own business with premises, own the premises in their pensions. So you buy it with tax free money and rent from your company credits your own pension fund tax free. You can borrow 50% more than you have in your SIPP pension too.
So if you have £150k in your pension pot, it can borrow another £150k so you can buy a £300k property ....and dont forget the tax relief on payments into the SIPP.
Sounds like the most tax efficient way to own your own premises and build up an investment for the future.
No it can't.So if you have £150k in your pension pot, it can borrow another £150k so you can buy a £300k property ....and dont forget the tax relief on payments into the SIPP.
Sounds like the most tax efficient way to own your own premises and build up an investment for the future.
A SIPP can only borrow up to 50% of its assets immediately before the borrowing takes place. So only £75,000 on a SIPP value of £150,000.
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