by admin | November 18, 2019 6:48 am
Most investors look at houses and flats to buy as an investment but you could consider commercial property as an alternative investment. However, there are 5 important things you must consider before investing.
What are the current market trends?
Many investors fail with the investment because they bought the property at the wrong time. It is not a good idea to buy when the market has hit its peak and prices are high. A successful investor will look at the trends for both the local and national markets and that includes value, supply, demand, rents, and availability of finance. A property agent can provide advice but carry out your due diligence as much as you can. Research the UK commercial property market
Consider the type of building
What kind of property type are you going to invest in? There might be an industry that you have a particular interest in or have previous experience working in. This might influence what type of building you choose to buy and will keep you motivated and enthusiastic about your investment. How will the building suit business needs? Will the business be in a good location for transportation links such as road, air, rail, and sea? Learn more about commercial premises
Understand the commercial market and industry
An investor has to think of the trends of a particular industry not just the trends of the property market. Many industries have technological changes all the time and your property will need to offer this as part of the complete package to tenants. A business in a specific industry sector may require a distribution centre in a certain location such as near an airport or seaport, or business requires a high-quality office that reflects an organisation of prestige.
Consider the costs and budget
A deposit is required before contracts are exchanged to buy a commercial building. The rest is paid after completion. But other costs must be taken into consideration, so make sure you have the funds to cover them. Other costs include stamp duty, solicitor’s fees, mortgage arrangement fees, and agency fees. You also have to factor in the expenses to factor in the refurbishment and facilities that cater to the industry sector. Not only are there costs associated with the purchase of the property, but there are also ongoing costs too. It is best that you have a budget in advance that will keep the building in operation. Business rates are also a major consideration.
How to finance the property
Commercial property is expensive and can cost a lot more than a residential property. Most investors will use a business loan to complete the deal. The market for commercial mortgages has become wide like the market for traditional buy to let mortgages. Lenders will ask for a lot of information if they are going to lend you large sums of money. Be prepared to have a business plan ready and how you propose to pay back the loan.
Source URL: https://www.alokintrade.com/5-things-you-should-consider-before-buying-a-commercial-property-in-the-uk/
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