Commercial property can be a fantastic investment alternative to simple residential housing; this is because commercial properties are valued differently from houses and flats in the UK. With this difference in mind, not only can savvy investors rent a property to pay off their bills and mortgage, they can also sometimes make a large amount of profit!
It’s important that we stress that we’re going to be covering more local commercial properties, not large corporate properties such as skyscrapers and airports. This is because these types of corporate properties are often too expensive and complex to buy for individuals, often requiring legal experts in managing private equity funds to give corporate bodies advice on how to proceed. Below, we’re going to explore 3 things that make local commercial properties valuable.
The property area is essentially the area where your prospective commercial property inhabits relative to other similar properties. Simply put, it is how valuable the location of the property is itself. A large and fairly newly-built supermarket property located in the inner city where there are relatively few supermarkets will have a higher value than an older one in a quieter part of town.
It’s easy to see why a factor like this would matter to a commercial property’s value, being in a better location puts a company closer to its employees, customers, and suppliers. In many ways this is even more valuable than what the building is made of and how old it is as convenience is often the most important thing for B2C companies. You can find out a lot more about this factor and its effect on commercial property value by looking at commercial market surveys – http://www.rics.org/uk/knowledge/market-analysis/rics-uk-commercial-market-survey/
Property Rental Income
Another important aspect when it comes to local commercial properties how much rent can be appropriately expected from business tenants for use of the property. Of course, this rent amount will depend on influence from all other factors, including, but not limited to; market property area, age and state of the building, condition of plumbing and electricity, and cost of upkeep. These are important issues to be aware of before committing to investing in your chosen commercial property.
There are companies out there who exist solely to inspect and judge all of these qualities we’ve previously mentioned and provide a report so you can make a better judgement on whether to invest or not. It’s up to you whether to take advantage of these or not, however, consider that this short-term cost might mean longer-term benefit if it means you make the right decision whether to invest or not.
Property Commercial Market Value
This is probably the aspect of commercial property value that you would first think of when thinking about investing. In short, this is your prospective property you’re thinking of buying compared to other similar properties in the area. If there are a high volume of similar properties, especially newer and larger ones, this may have a negative effect on the property you’re looking to secure. This is simple and straightforward supply and demand at work.
A great way to get over this hurdle is to seek new commercial property developments as these are usually well-researched in order to be built in places that aren’t already oversaturated. This means their value likely won’t be affected by the availability of other similar properties, they’ll also likely be at their highest ever value due to them being brand new. You can find new opportunities at property development sites likes these – https://www.buyassociation.co.uk/investments/
Invest in a Local Commercial Property Today
When it comes to any kind of real estate, be it at a local or corporate level, there are many different factors you need to consider to come to the right decision. We hope that this quick overview will help you make the right decision when it comes to your next property investment.