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.
Commercial property offers a great deal of flexibility and benefits*;
- There are a variety of different properties available from shops and warehouses to hotels and offices or plots of land ripe for development.
- 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, your involvement as a landlord can be minimal, offloading the maintenance responsibilities of the building on the tenant.
- Many investors 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 becomes insolvent, 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.
- Another issue to consider is the security of tenure provisions of the Landlord and Tenant Act 1954 which may mean it is expensive, 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.
- Commercial property leasing can be complex, we recommend you seek professional advice from property agents and specialist commercial property lawyers to ensure your investment is properly protected.
Our specialist commercial property service can be tailored to suit you and your property, we’ll guide you through the legal processes as quickly and efficiently as possible leaving you free to sit back and enjoy your income*.
If you have any questions on need legal advice on leasing commercial property, email Cheryl Baxter, head of our commercial property team or call her on 01803 403403. Alternatively, complete a contact form and we will call you back.
*Any investments carry risk and you should seek independent financial advice before proceeding. We do not offer investment advice