With the recent tax changes for landlords, it’s no surprise that investing in commercial property is becoming an increasingly attractive option for proprietors. However, as with any significant venture, it’s important to weigh up the costs and benefits before choosing to invest in commercial property.
Whether you’re an experienced landlord looking to expand your portfolio, or you’re simply exploring new investment opportunities, investing in commercial property could be your key to a bright and prosperous future in the property market. To learn how, read on and discover five reasons why you should invest in commercial property.
1. Provides a steady stream of income
If you lease your commercial property, you’ll receive rental payments from tenants. You’ll receive these payments for as long as you rent out the property, which can potentially be for a number of decades, depending on the tenant.
This means that you can enjoy the benefits of a long-term, steady stream of income with a reduced level of risk compared to other investments, such as stocks.
2. Spreads risk
Diversification is the key to minimising losses, therefore, investing in commercial property can help you to reduce your risk.
If you invest all of your time and money into residential property, one hit to the market could leave you in a difficult position. Whereas, if you spread your investments across several areas such as annuities, shares and commercial property, you’ll be in a stronger position. If one market crashes, you’ll have the other investments to fall back on.
Depending on the nature of the commercial property, it may also be possible to let it to two or more tenants, further spreading the risk of the property becoming fully vacant.
3. Capital growth
In general, property is considered a sound investment as property values tend to increase over time. Therefore you’re likely to make good returns on your initial investment, in addition to the rental income.
The same is true of commercial property and if you’re proactive in your property management, you can reduce your costs, increase your profits and maximise your returns.
4. Better relationship with your tenant
The relationship between a landlord and tenant of a commercial property will be business to business, and is therefore usually more professional than with a residential tenant. Also, a commercial tenant will usually occupy the property during business hours only, meaning fewer late-night call outs for maintenance issues.
5. You can make changes to your office space
As a commercial property owner, you will ultimately have control over any changes to your office space. This means that you can make as many alterations and modifications as you like while you own the building. It is also often simpler and easier to obtain planning permission for change of use of a commercial building than a residential property.
Commercial property offers significant benefits, however, it’s important to consider whether the benefits outweigh the costs. Abacus Solicitors are experienced in commercial property conveyancing and can help you to make that all important decision. Contact them today to see how they can help you to expand your portfolio.
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