It’s a fairly well-known fact at this point that property is one of the best choices for anyone looking to make an investment. Real estate has been shown to be one of the most reliable and lucrative investments options available. But the majority of real-estate that people invest in is private property with individual tenants. This is a fantastic entry point for a lot of landlords. Residential properties will often require less of investment and are often much easier to manage overall. This means that if property investment is simply a side project for you rather than a full blown career, residential properties are a fantastic way to get started. But what about if you wanted to move on to something more ambitious? If that’s the case, a lot of landlords are have found themselves moving into the realm of commercial property. This means properties like offices, retail spaces, and warehouses. While commercial properties are often better regarding straightforward income, they also come with a lot of responsibility. Here are a few things that you should definitely consider if you’re thinking about becoming a commercial landlord.
Are you ready for the next step?
This is an incredibly important point and one that many landlords ignore at their peril. One of the biggest reasons that a lot of landlords fail when they move into commercial property is that they weren’t really ready to take that next step. Don’t just assume that, because you’ve had success with a residential buy-to-let property, you’re definitely ready to move onto commercial properties. You will likely have to spend a lot more time and money dealing with the legalities and regulations that come with commercial property investment. Unlike residential property, it’s much harder to be a commercial landlord on the side. Ask yourself if you’re in a position to start committing much more of your time to your investments before you think about moving on to commercial properties.
Can you afford it?
One of the major draws of commercial properties is that they often result in higher levels of income than residential ones. It’s hardly surprising that people are tempted by that, but you have to remember that this comes at a, very literal, price. Commercial properties are often much more expensive, and you need to make sure that you speak to some commercial appraisers before you put down any money, just so that you can be sure you’re not going to end up paying an unreasonable price.
Can you commit to the lease?
Commercial properties often work on much more long-term leases than the standard six months that applies to most residential properties. This means that you’ve got to be willing to commit to a long-term lease which is something that you might not be used to. This means that something like five, ten, even fifteen-year leases wouldn’t be completely unusual. One the upside, this does mean there will be a lot less management required since the lease won’t be changing nearly as often.