Commercial property also known as income property or investment property refers to immovable property that is generally are purchased with the motive to generate income or profit through rental incomes or capital gains by setting up commercial spaces.
Commercial spaces can be as well be used as larger residential rental properties.
Commercial property in London includes hotels, farmland, medical centers, warehouses, office buildings, retail stores, malls, multifamily housing buildings, and garages.
Table of Contents
How do you know you are buying the right commercial property?
When buying a commercial property, you should know whether you’re buying the right commercial property or not.
You should
- Do proper industry analysis
- Research the location and review the spot of the commercial property for sale in London
- Professional advice is needed
- Take some time out to talk to a property tax expert, etc.
Which is regarded as a better investment? Commercial property or residential property?
Be it a commercial property or residential property, there are a few things that need to be mentioned when you are planning to invest in a property.
Taxation
Tax rules are generally rested less favorable in the case of investors of residential property who have the residence in their own names rather than a commercial property.
Return on investment
The initial costs of purchasing and other investments in commercial property can be much higher than in residential property. However, it is essential to note that the overall returns are also higher.
Pressure
There are many issues relating to renting out a residential property to individual tenants. These issues are not faced by commercial property investors as they deal with companies that are comparatively bigger than individual tenants
Protection under law
Commercial properties that are leased, are usually contractual. This gives more protection to the parties in the eyes of law when compared to the agreements with tenants in the case of residential property.
Responsibilities
The responsibilities for maintaining, repairing, etc. of a commercial property lie on the tenants of the property. However, in the case of residential property, the duty lies on the landlord.
Is the commercial property a good investment UK?
There are certain reasons which make a commercial property a better investment in the UK than residential properties.
Higher investment opportunities
Commercial property London, to earn a regular income, offer better investment opportunities as they offer higher rental rates than residential properties.
Long Lease structure
If you’re looking for commercial property for sale in London, to invest in it, one of the major benefits of it is, the investment market in the UK has a longer lease structure and thus benefits the investors.
Long Lease Period
The average lease period of commercial property in London ranges between 10 to 15 years. The period is much higher when compared to residential property, which is usually for six months to a maximum of a year.
Increase In Value
By simply increasing the rent of a property, the value of the commercial property can be increased. It is essential to review the tenant agreements to check if they’re paying market rent or whether their rent can be increased.
Expenses
The usual expenses Incurred for repairing and insurance of commercial property in London lie on the tenant of the property however in the case of residential property, the duty to maintain lies on the landlord.
More secured source of earning
Investing in commercial properties offers more security as the income of the commercial property investors to be generated from it is guaranteed due to its extended period of time.
All these aforementioned factors make the commercial property a better choice for investment over residential property.
5 Major Benefits of Investing in Commercial Property :
Investing in a commercial property for sale in London comes with lots of benefits. Some benefits are discussed below.
Income Inflow
Income inflow in commercial real estate properties is more when compared to other investment properties such as stocks, bonds, shares, etc. It is also remarkable that the average rental income generated from commercial real estate is approximately 8 to 12% whereas the income generated from residential real estate is 1 to 2%.
Long Lease Tenure
The leasing tenure in the case of commercial property is comparatively high. It ranges from somewhere between 10 to 20 years once leased. This provides the investor, on their investment, a secured source of income.
Excellent Appreciation Value
It has always been observed that commercial properties always offer excellent appreciation value over a long period of time when compared to other assets. Having proper care can improve the desirability of the asset.
Quick equity build-up
Equity is said to be the total amount an investor builds over some time. When one invests in commercial property, he can build up equity quickly in no time. Commercial properties comparatively yield more equity than others.
Security
The investment in a commercial property is comparatively more secured than in residential property. The residential property might or might not have tenants all the time and therefore no secured income is ensured. However, in the case of Commercial Property, a secured income is ensured as there is always some or the other Company available.
What are the best commercial property websites in the UK?
When You search in your respective Web browser about the best commercial properties in London, certain websites appear in front of your eyes. Some of the best websites are:
Morgan Pryce
https://www.morganpryce.co.uk/
- Searching for commercial property for sale in London? Visit Realla
Losberger De Boer
https://www.losbergerdeboer.com/uk/
Innovation Park Medway
https://www.innovationparkmedway.com/
Right move
Estates gazette property link
https://propertylink.estatesgazette.com/
On the market
Prime Location
https://www.primelocation.com/
Zoopla
Knight Frank (UK)
https://www.knightfrank.co.uk/
Martyn Gerrard
https://www.martyngerrard.co.uk/
Savills
Conclusion
We hope that this article was helpful and now your concept and concern about commercial property in London have been cleared to a certain extent.
This article speaks about the benefits of commercial property, the extra benefits you would enjoy over the residential property once invested in commercial property, and finally, if you have decided to invest in commercial property there are certain links provided that a resident of London can use to visit the website which has commercial property for sale London.
