refurbishing commercial premises...
Discussion
Been thinking about getting into commercil property - rather than all eggs in the residential property basket. As with residential property, I assume there is a fair degree of run down, underutilised commercial property that could be bought, refurbished to provide better or more commercial space and thus increase rental yield or turn a capital gain on resale. Any PH'ers got experience of this? I expect major downside would be undertaking works while a tennant is in situ trying to run a business. The only alternative is to buy & refurb empty units I suppose.
You'll get better rent yields on commercial over resi - 8%+ is not untypical, depending on location. However, the capital gain tends to be less. Because CGT changes to 18% across the board (but indexation is also abolished) it wouldn't surprise me if a fair bit of commercial property comes on the market after April.
[quote=johnfm]As with residential property, I assume there is a fair degree of run down, underutilised commercial property that could be bought, refurbished to provide better or more commercial space and thus increase rental yield or turn a capital gain on resale. [quote]
Not unless you are prepared to go and look for it in bandit country there isn't.
Not unless you are prepared to go and look for it in bandit country there isn't.
We specialise in all aspects of commercial refurbishment/fit-out work - if you have any specific questions then let me know 
One thing to consider is the fact that most commercial leases will stipulate for dilapidation works to be undertaken so that the building is returned to the condition it was in at the commencement of the tenancy.
One thing to consider is the fact that most commercial leases will stipulate for dilapidation works to be undertaken so that the building is returned to the condition it was in at the commencement of the tenancy.
Edited by PhilLL on Tuesday 4th March 15:00
Many comm prop premises are let on fully repairing and insuring leases so the tenant is responsible for keeping the premises in whatever state the lease requires. It depends on the type of the premises though.
For instance a unit in a shopping centre or an office in a mixed block is likely to be an "internal only" demise with the fabric of the building being kept in repair by the landlord or a managing agent - the cost of repairs would be reclaimed through the service charge.
A stand alone warehouse or similar is likely to be FRI so the tenant would be responsible for the works and the landlord may not have any rights to carry out works unless the tenant has defaulted.
In the first scenario as Landlord you could carry out works and try to recharge through service charge but you might find yourself very unpopular and with empty units! You may not be able to carry out improvements under the service charge anyway and may be limited in the works you can carry out if they are likely to disturb the tenants.
I think what you are proposing has a number of problems and you'd need to ensure you have a good understanding of landlord and tenant legislation.
BTW - the comm prop indicators have gone down significantly over the last few months - I can't remember what I read (probably estates gazette) but I wouldn't assume that it's the cash cow that it was a little while ago.
For instance a unit in a shopping centre or an office in a mixed block is likely to be an "internal only" demise with the fabric of the building being kept in repair by the landlord or a managing agent - the cost of repairs would be reclaimed through the service charge.
A stand alone warehouse or similar is likely to be FRI so the tenant would be responsible for the works and the landlord may not have any rights to carry out works unless the tenant has defaulted.
In the first scenario as Landlord you could carry out works and try to recharge through service charge but you might find yourself very unpopular and with empty units! You may not be able to carry out improvements under the service charge anyway and may be limited in the works you can carry out if they are likely to disturb the tenants.
I think what you are proposing has a number of problems and you'd need to ensure you have a good understanding of landlord and tenant legislation.
BTW - the comm prop indicators have gone down significantly over the last few months - I can't remember what I read (probably estates gazette) but I wouldn't assume that it's the cash cow that it was a little while ago.
Look - I'm not being funny but if a commercial unit is standing empty it's probably for a very good reason.
Just be careful is my advice.
I see shed loads of s
t commercial units (offices, warehouses etc) every week.
My advice is to buy a unit with some existing income that is only part let and then add value by letting the rest of the space or refurbing the building and upping the rents at rent review time.
Just be careful is my advice.
I see shed loads of s
t commercial units (offices, warehouses etc) every week. My advice is to buy a unit with some existing income that is only part let and then add value by letting the rest of the space or refurbing the building and upping the rents at rent review time.
Oi_Oi_Savaloy said:
Look - I'm not being funny but if a commercial unit is standing empty it's probably for a very good reason.
Just be careful is my advice.
I see shed loads of st commercial units (offices, warehouses etc) every week.
My advice is to buy a unit with some existing income that is only part let and then add value by letting the rest of the space or refurbing the building and upping the rents at rent review time.
This is exactly the strategy I was thinking. I agree that empty units (or unsold houses) are often empty for a reason. Just starting to look at this, so won't be jumping head long into anything just yet.Just be careful is my advice.
I see shed loads of s
t commercial units (offices, warehouses etc) every week. My advice is to buy a unit with some existing income that is only part let and then add value by letting the rest of the space or refurbing the building and upping the rents at rent review time.
I didn't mean to sound so pessimistic John, sorry!
There are undoubtedly, in my opinion, opportunities out there at the moment but just be cautious when offered something by an Estate Agent or commercial agent that you do not have an existing relationship with . If it was that good a deal they would have offered it to their mates long ago (and in fact probably have done). If it's not been snapped up then there's bound to be something wrong with it.
If you are looking for commercial property I'd start buying the Estates Gazette (out every saturday) and Property Week (to a lesser extent). The EG has plenty of adverts and news on Auctions (of more interest to you probably) for Resi and commercial units. Also, interestingly for your help with values and stuff is that it all publishes results of these auctions too.
If you want to run something by me (or want to ask something in more detail) please feel free to pm me. Happy to take a phone call and offer as much advice as I can help with.
That goes for everyone on here actually!
There are undoubtedly, in my opinion, opportunities out there at the moment but just be cautious when offered something by an Estate Agent or commercial agent that you do not have an existing relationship with . If it was that good a deal they would have offered it to their mates long ago (and in fact probably have done). If it's not been snapped up then there's bound to be something wrong with it.
If you are looking for commercial property I'd start buying the Estates Gazette (out every saturday) and Property Week (to a lesser extent). The EG has plenty of adverts and news on Auctions (of more interest to you probably) for Resi and commercial units. Also, interestingly for your help with values and stuff is that it all publishes results of these auctions too.
If you want to run something by me (or want to ask something in more detail) please feel free to pm me. Happy to take a phone call and offer as much advice as I can help with.
That goes for everyone on here actually!
Oi_Oi_Savaloy said:
I didn't mean to sound so pessimistic John, sorry!
There are undoubtedly, in my opinion, opportunities out there at the moment but just be cautious when offered something by an Estate Agent or commercial agent that you do not have an existing relationship with . If it was that good a deal they would have offered it to their mates long ago (and in fact probably have done). If it's not been snapped up then there's bound to be something wrong with it.
If you are looking for commercial property I'd start buying the Estates Gazette (out every saturday) and Property Week (to a lesser extent). The EG has plenty of adverts and news on Auctions (of more interest to you probably) for Resi and commercial units. Also, interestingly for your help with values and stuff is that it all publishes results of these auctions too.
If you want to run something by me (or want to ask something in more detail) please feel free to pm me. Happy to take a phone call and offer as much advice as I can help with.
That goes for everyone on here actually!
A very good offer. There are undoubtedly, in my opinion, opportunities out there at the moment but just be cautious when offered something by an Estate Agent or commercial agent that you do not have an existing relationship with . If it was that good a deal they would have offered it to their mates long ago (and in fact probably have done). If it's not been snapped up then there's bound to be something wrong with it.
If you are looking for commercial property I'd start buying the Estates Gazette (out every saturday) and Property Week (to a lesser extent). The EG has plenty of adverts and news on Auctions (of more interest to you probably) for Resi and commercial units. Also, interestingly for your help with values and stuff is that it all publishes results of these auctions too.
If you want to run something by me (or want to ask something in more detail) please feel free to pm me. Happy to take a phone call and offer as much advice as I can help with.
That goes for everyone on here actually!
The other thing to consider with commercial property is that you will have to put in a lot more money than you are used to with residential investments. Where as you can get a way with a 10-15% deposit for a BTL, you will be looking at more only 70-80% LTV on a lot of commercial properties, especially if they do not have existing tenants.
Feel free to PM me to talk finances or property investment further.
Feel free to PM me to talk finances or property investment further.
Gassing Station | Business | Top of Page | What's New | My Stuff