A Guide to Commercial Property
With increases in Stamp Duty Land Tax for buyers who own more than one residential property, loss of tax relief and more stringent mortgage requirements, more and more investors are turning to commercial property to diversify their investment portfolio.
There are a variety different properties available from shops and warehouses to hotels and offices or plots of land ripe for development. Commercial property offers a great deal of flexibility. Tenants can be individuals, partnerships or companies and all require different leasing arrangements. With your investment property let on a full repairing and insuring lease, the landlord’s involvement can be minimal offloading the maintenance responsibilities of the building on the tenant. Many investors will also take advantage of their Pensions to purchase such a property through a SIPP to make the money work harder and the rewards even greater.
Commercial property often results in higher yields but carries increased risk. The success and profitability of the business tenant is crucial. If the tenant goes bust, you could be left with empty premises that having been altered by the previous tenant are unsuitable for general letting and costly to convert back. It is wise to ensure you have a suitable Rent Deposit or Guarantor to protect your position.
Other issues to consider are the security of tenure provisions of the Landlord and Tenant Act 1954 which may mean it is expensive and difficult or even impossible to evict a tenant should you seek to regain possession of the premises at the end of the term of the lease.
The complex nature of Commercial Property and the issues arising makes it imperative for you to take professional advice from agents and qualified lawyers to ensure your investment is properly protected.
Whatever your commercial property needs, Boyce Hatton LLP offers a bespoke service to suit you and your property, which will seamlessly guide you through the legal minefield as quickly and efficiently as possible leaving you free to sit back and enjoy your income.
Cheryl Smith is Partner in the Commercial Property department at Boyce Hatton LLP. You can contact Cheryl by emailing [email protected] or following her on Linkedin or Twitter @BoyceHatton_CS