Commercial property, sell or let?.........
Discussion
I have a commercial/industrial building on an established industrial estate which I bought 20yrs ago to use for my business.
After many years use my business has declined/changed to the point where I no longer require an industrial premises and for the last 2 years I have been working from home.
I currently have a rent-paying tenant in said premises who has been there for 5 years (I had them renting part of the building whilst I was still using it).
In evaluating my investments it seems that whilst the property value has increased significantly since the last valuation, I am unable to charge more rent due to the 'going rate' being what it is, this is resulting in a much lower value/rental yield than I would like.
From what I am seeing/hearing it seems that UK commercial property values may have reached a high point in a 'cycle' so I'm thinking that now might be a good time to sell rather than continue letting.
Any commercial property types got any ideas, advice.
After many years use my business has declined/changed to the point where I no longer require an industrial premises and for the last 2 years I have been working from home.
I currently have a rent-paying tenant in said premises who has been there for 5 years (I had them renting part of the building whilst I was still using it).
In evaluating my investments it seems that whilst the property value has increased significantly since the last valuation, I am unable to charge more rent due to the 'going rate' being what it is, this is resulting in a much lower value/rental yield than I would like.
From what I am seeing/hearing it seems that UK commercial property values may have reached a high point in a 'cycle' so I'm thinking that now might be a good time to sell rather than continue letting.
Any commercial property types got any ideas, advice.
A simple way to work out basic figures (well I do) is how much do you get in your pocket now with the property and tenant -v- if you sold up and put it into a high interest account how much you would get each month then.
The capital to income values have declined but I think capital is remaining static for a bit./slow increase.
So its a gamble on more capital increase and a steady x income or perhaps a higher income with no capital increase.
We are in the reverse of you. Bought a commercial freehold shop 2 yrs ago with flats above and will move in to the shop in a few years time. Im not really interested in the capital growth as I looked at the income -v- capital at the time of buying. fixing it. The sums were good.
If the capital increases then great thats a big bonus for when I retire.
The capital to income values have declined but I think capital is remaining static for a bit./slow increase.
So its a gamble on more capital increase and a steady x income or perhaps a higher income with no capital increase.
We are in the reverse of you. Bought a commercial freehold shop 2 yrs ago with flats above and will move in to the shop in a few years time. Im not really interested in the capital growth as I looked at the income -v- capital at the time of buying. fixing it. The sums were good.
If the capital increases then great thats a big bonus for when I retire.
superlightr said:
A simple way to work out basic figures (well I do) is how much do you get in your pocket now with the property and tenant -v- if you sold up and put it into a high interest account how much you would get each month then.
Well a simple calculation (if it is really worth what the valuation says) is that the yield is about 5.25% of value so yes I could get more in a high interest account but I was thinking about future property value, I realise that's an unknown but it has done well in the last 20 years.Incidentally when I last had it valued for rental purposes the yield was around 10% but now I'm only able to charge the same rent due to market forces, yet the property has supposedly doubled in value? - makes me think that letting is not the best way forward.
Anyone got a crystal ball?
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