Commercial property is a broad term that refers to many different buildings. The easiest way to think of it is any property where business is carried out. Typically, this relates to offices, retail units, restaurants, and so on. You could include warehouses here, though that usually falls under the industrial property banner.
Investing in commercial property can be profitable as it’s a great way to start a buy-to-let empire. However, you’ll commonly encounter a few issues or hidden worries when looking at property to purchase. As such, you should never invest in a commercial property unless you know about these three things:
Unlike residential property, a commercial property needs to follow strict safety regulations to be deemed safe for people to work in. Some investors make the mistake of rushing into a purchase and ending up with an office that fails all health & safety checks. Now, you have to spend even more money getting things in order before you can rent out your office to willing businesses.
Thus, you should always spend time conducting the necessary tests before buying a commercial property. This includes things like fire suppression inspections, electrical inspections, safety hazard checks, and so on. When you know the state of the property’s safety, you can invest with more confidence.
What happens if you want to extend your commercial property? You may wish to add an extra floor to the building or extend it out either side. You could even wish to build a new and improved parking area outside of it. All of these things will require planning permission, which could be denied!
If a commercial property is built somewhere with strict planning regulations, it may be against the law to extend it in any way. Therefore, you’ve invested in something that you can never really change. So, always check with the local council to see if there are any strict regulations in place, or if you’re good to go.
This sounds like a random thing to worry about, but it’s a huge feature of commercial properties. Many of these buildings are built close to busy areas with lots of noise every day. Not only that, but the people that stay in the properties are going to be working hard on their business operations. As such, you need to invest in a building that’s as soundproof as possible. If people can hear everything outside or from the office next door, it will be a horrible place to work.
Why does this matter? Well, if you’re working in the building, you’ll find it hard to concentrate. If you’re renting it out to other businesses, nobody will want to pay for a noisy office! In turn, you end up investing in soundproofing the building, which can be costly. It saves money if you know the building is already soundproofed from the onset.
When you choose the right property, a commercial real estate investment can be a wise way to spend your money. These three things are big concerns, but don’t forget about all of the more obvious worries when investing in real estate.