Commercial properties such as warehouses, offices, and shops can provide an excellent return on investment should you decide to buy one.
Developing a commercial property portfolio is becoming a popular choice among those looking for new ways to invest, but what should you look out for when making such an investment?
Below are some are some of the most important issues to consider before starting or adding to a commercial property portfolio.
Research the Market
Like any other type of business or investment, the first step when looking to invest in commercial property is to research the marketplace and make some decisions about the type of property you want to invest in and its location.
Those who are new to the commercial property scene may best be advised to seek the advice of experts like GVA who specialize in the sector and offer consultation to companies and individuals alike.
Consulting professionals who are involved in the sector daily will make it easier for you to identify opportunities for potential lucrative investments, for example, in an area that is about to secure investment in its infrastructure.
A detailed analysis of how you are going finance a commercial property investment is paramount if you are to make a profit going forward and it isn’t just a case of assessing how much capital you have or how much money you will need to borrow.
To calculate exactly the kind of return on investment you can expect means factoring in things such as potential tax allowances. Capital tax allowances and self-interested personal pensions (SIPP) are among the topics that should be discussed with an accountant in order to build a clear picture of the fiscal landscape ahead of you.
Go it Alone or Invest in a Fund
If you are sure that you want to purchase a commercial property as an individual or a company, then be aware of the responsibilities that come along with the venture.
Collecting payments, the general upkeep of the property and administrative jobs are all things that are easy to underestimate in terms of the time, money and energy required to carry them out.
One alternative is instead of going it alone, you could invest in a fund and this will mean that you will not be expected to carry out all the managerial and administrative tasks, instead, you just look at how and when to invest.
As with any type of investment, the commercial property sector is not a guaranteed route to riches, but a sensible and measured approach can turn out to be very rewarding.