Commercial property investment can be overwhelming, especially for first time investors who may be new to this sector. There are seemingly hundreds of articles, different strategies and conflicting advice that can all lead to perpetuating myths; not to mention a whole lot of confusion. Here, we clear up the common commercial property investment misconceptions so that your investment can be stress free.
You need to invest millions
As with all investments, there is a vast scale of investment options available to you. Whilst it is true, that some options will be of the multi-million pound variety, there are still plenty of of opportunities for those looking to spend less than £1m, making commercial property investment accessible to all levels of investors, including those who are smaller or just starting out. Take this Greggs bakery in Leeds for example. We acquired this property for a first-time investor from Yorkshire who wanted to start out with something small, secure and local. For only ca. £175,000 we sourced this off-market ground and first floor shop whole building. The property is let on a 5 year lease to Greggs (in occupation for over 15 years) for a tidy 6.5% yield, proof that solid deals can, and do exist for all budgets.
It’s not “safe” to invest
In reality, all types of investments carry some degree of risk. And, in our post-Brexit environment, with a general sentiment of unrest and political uncertainty, now more than ever clients are wanting to play it safe with their money. However, within this tough climate we are seeing a renewed interest in bricks and mortar investment, with a key strategic adjustment: clients’ focus has now shifted towards yield and income, rather than capital gains. This is where blue chip commercial property investment can be a wise choice for your money. Leased to long-term blue chip clients like supermarkets which tend to remain stable during economic instability, these properties are renowned for yielding solid returns for many years, providing the owner with a regular, stable income for years to come.
It’s difficult to manage
There’s a common misconception that management complexity increases with property size, and therefore commercial property will need far more hands-on management. As a commercial property landlord in the UK, you are responsible for the health and safety of the site, general maintenance, and perhaps most importantly it’s the landlord's responsibility to take out a high quality insurance policy and handle any claims made.
However, just like with residential property, this process can be made far smoother and stress free when outsourced to a reliable and trustworthy property management agent who specialises in commercial property. In addition to rent collection, insurance arrangement, inspections, dealing with tenant enquiries and overseeing rent reviews, the highly experienced Prideview team can also provide services such as lease consultancy, refinancing, valuations and planning applications, making your investment as stress free as possible.
With over 30 years experience the team at Prideview Properties are industry leaders in commercial property investment. If you’re ready to take the next step in your investment, view our current portfolio of Investment Property For Sale. Or, if you’d simply like some some honest, quality advice on property investment or have any questions regarding your investment requirements, contact us on +44 (0)208 954 0878 and our highly experienced team will happily assist. We look forward to working with you.