According to property experts, the number of buy-to-let investors now dipping into commercial property has tripled over the past three years. And what with both the recent and upcoming changes in buy-to-let taxes, we thought we’d take a look at why typically residential buy-to-let landlords are now investing more commercial property.
George Walker, commercial auction partner at Allsop, has stated:
We’re getting a lot of investors into our market because of the changes to buy-to-let. Once they have bought one, they can’t believe the simplicity and want to do it again.
<p style="text-align:center;"> <img title="Why Invest in Commercial Property? Infographic" src="https://www.ashburnham-insurance.co.uk/wordpress/media/why-invest-in-commercial-property-infographic.png" alt="Why Invest in Commercial Property? Infographic" /> Infographic by <a title="Ashburnham Insurance Services" href="https://www.ashburnham-insurance.co.uk">Ashburnham Insurance</a></p>
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The Benefits
1) Diversify your portfolio
Spread the risk by investing in different types of commercial property, as different markets will have different periods of “ups and downs”.
2) Multi-let
Benefit from a combination of different commercial tenants in different markets.
3) Longer leases and lower turnover
Commercial leases tend to be longer than residential tenancy agreements, guaranteeing you more stability and long-term occupations.
4) Business-minded tenants
Commercial tenants take on much more of the financial responsibilities, such as property repairs, insurance, maintenance, refurbishments, and business rates. They’re less likely to damage the property as they have more of an interest in maintaining and improving the interior and exterior for the sake of their customers.
5) References and background checks
You can obtain far more detailed background knowledge on the business and its financial stability. You can get a copy of their accounts, or even visit the business in person to get an idea of how it’s doing.
6) Higher rental income
Commercial properties typically have higher rent costs than residential properties.
The popularity of commercial properties for buy-to-let investors:
- 70% – Shops
- 10% – Leisure (e.g. restaurants, cafés, gyms, etc.)
- 10% – Offices and industrial
- 10% – Other
Find out more about our commercial property insurance with Ashburnham!