May 30, 2024


Mad about real estate

The 5 Key Upsides of Commercial Property Investing

Since 2008, the market crash has led to more and more commercial properties becoming vacant due to repossessions, as well as a huge drop in the value of commercial property. So if you have the funds available, now is the time to invest when prices are low and set to increase over the next few years, meaning your investment return will increase with it.

Even though the commercial property sector has been hit hard, there are still many reasons why investing in commercial property is a good idea, and we look at some of them in this article.

Tenants look after the properties: Residential tenants are often guilty of not taking good care of a property. Landlords often have to spend money on redecoration or cleaning between tenancies. However, as businesses want to make a good impression, they often take excellent care of their commercial property. Having poorly maintained premises can have a very negative effect on a company.

The tenant is also responsible for much of the upkeep of a commercial property. Unlike in a residential let, where the landlord’s over all responsibilities include interior repairs and wear and tear, gas and electrical safety and decoration, the tenant of a commercial property has to take on many of these responsibilities.

Also, unlike with residential contracts, tenants often have much of the responsibility for maintenance and cleaning on their own shoulders, and so they are less likely to leave the property in a state of disrepair, as they would have to foot the bill if they did.

Commercial Mortgages Are Available To Assist Purchases: Buy to let residential mortgages are now more and more difficult to come by since the market crash, and thus it is very difficult now to get a buy to let property for business purposes on a residential property. Since many landlords defaulted on loans, lenders are reluctant.

Commercial mortgages are still very much available, and so long as you have the right funding to put down a deposit it is much easier than a buy to let. There are also still many lenders who are offering commercial mortgage contracts compared with fewer offering buy to lets.

You can buy using a commercial mortgage: Trying to borrow the money you need to buy a residential ‘buy to let’ property has become increasingly tough over recent years. Many lenders have withdrawn from the buy to let market and those who remain require higher deposits and more extensive proof of earnings.

Those that were considering the residential buy to let market may well be better off looking at commercial lets instead. With commercial lending looking to increase over the next one to two years this could be the prime opportunity to switch your asset base to a more profitable market.

As commercial property prices begin to recover, investors are steadily going returning to the commercial sector. So, with commercial mortgages available and business property offering many capital growth and income opportunities, is it time for you to consider commercial property as an investment?