7 tips for investing in Commercial Property.

Commerical Buildings

 

Commercial property investment can be rewarding but also comes with major risks, we want to share our own knowledge so anyone can have the skills and tools to tackle commercial property.

 

  1. Know your Location.

  2. Research Environmental Factors.

  3. Have the financial capital to invest.

  4. Think about the type of property you want.

  5. Have the right team behind you.

  6. Research the Market

  7. Plan for the long term.

 

Know Your Location.

Location is a major factor when investing in commercial property, the difference in investment between an office in the Scottish islands to Central London would be huge, so when planning to invest in commercial property take into account the location of where you’d like to invest, you could go down the road of investing heavily in a populated city and have high rent yields or invest into a developing area and then make a long term profit on the investment, there are so many different strategies for finding the perfect location for your property it’s important to plan carefully and to not rush investing into an area that wouldn’t offer a strong return.

‘’ Rental Yield is the return a property investor is likely to achieve on a property through rent’’

Research Environmental Factors.

When buying a commercial property great care must be taken into considering the buildings environmental factors this includes the day-to-day maintenance and if the buildings need improvements or refurbishments.

 It’s equally important to think about the property’s surrounding area as a property with a river close by could be an environmental hazard unless correctly protected. Environmental issues can also greatly affect the cost of insurance as well, as an insurance company or bank would be asking for a premium quote if a building has a higher risk rate.

 

Have the financial capital to invest.

When setting out into the world of commercial real estate, the most important element of any successful property business is having the capital to invest, if you’re coming into the market armed with the capital to invest long term then you will more than likely be more successful, though there are other ways in which you can find the capital to  invest, this can be from equity loans to having private investors, there are always ways which you can generate capital to invest in commercial property.

 

Think about the type of property you want to invest in.

There are a number of property types you can invest in when it comes to commercial property including, office, industrial, retail, medical and leisure, so take great care in finding the right industry to suit you as industrial units usually offer a lower rent per Sq Ft than an office building,  while the retail market is currently struggling and medical focused properties come with more regulation.  So, it’s important when creating a strategy to carefully understand each industry of the property sector, what are their positives and negatives and where are the opportunities for growth.

 

Having the right team behind you.

Investing and owning commercial property is a major commitment and requires a lot of man hours so the business can be successful, this means at every turn of the business you need the right people, including the investment team, lawyers, surveyors, and property management. In order for the business to work and to have a long-term return on your investments, you need the right people helping and supporting at every moment.

 

Research the market.

Once you have the financial capital and the right team behind you it’s time to research the market you want to invest in, this is important as investing at the wrong time can lead to a loss on your investment. When researching your chosen market there is a number of scenarios for which you must plan for, you must look at the market parameters which include your competitors, the amount of investment in that sector, what yield it could bring you and the long-term potential growth. You can tackle this in many ways, either hiring a consultancy firm to research the market for you or look for a local commercial agent who works in the area, who has knowledge of that market.

 

Plan for the long term.

If you’re expecting a quick return on a commercial investment think again, when investing in commercial property it must be a long-term commitment if you want to get a high return on your investment, therefore most commercial investors have portfolios of buildings, so they have a steady cash flow each month.

 

 

If you’re looking for any commercial space from an office to an industrial unit check out our available property page and find a property in over 100 locations nationwide. 

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