Excellent experience start to finish – always very responsive to any queries and the turnaround on the property I was buying was very quick, even in the busy time leading up to stamp duty deadline. Jenny was always very helpful and went above and beyond to close on a short timescale.
Buying commercial property is a huge investment and a first time buyer must prepare and carry out their due diligence as efficiently as possible to enhance their prospects of making a sound investment and maximising rental yield and capital growth. Short term profits can be achieved but are more unlikely; patience is key in securing medium to long term growth.
Early consideration should be given to location and type of property required or desired. It is important to invest your money in an area that is well known to you or that you have researched thoroughly. If you are planning on being an owner occupier your business needs will largely dictate the location. If you are looking to purchase a commercial property to rent to a third party you need to research current achievable rents and current levels of supply and demand.
You need to be sure of the sector you are targeting. Are you looking for offices, warehouses, retail or leisure? You need to tailor your purchase with the target sector in mind.
Get to know local commercial property surveyors and agents. They can provide useful links to sellers and may be able to find a property for you before it goes on the open market. They will also be able to advise on property and rental values. Just be careful that they are acting for you and that there are no conflict of interests with the seller.
It is very important to instruct a solicitor early as they will be able to guide you through the process from making an offer, carrying out due diligence and searches, negotiating the contracts and dealing with completion, HMRC and Land Registry registration requirements. Our blog – Buying Commercial Property the Legal Essentials – provides more details for consideration.
How are you going to fund the purchase – cash reserves, securing a mortgage from a lender or re-mortgaging an existing property? If a mortgage is required you should try and agree a mortgage in principle as early as possible as being in a position to exchange quickly on a purchase may help secure a favourable purchase price. A mortgage broker may be best placed to advise on the mortgages available but for more bespoke facilities you may need to deal directly with a relationship manager at various banks or second tier lenders. We have good links with many lenders.
Consideration should be given to whether you are buying the property in your personal name, a company, a partnership or via your SIPP or SASS. Your solicitor can advise on the differences and in conjunction with your accountant early consideration may be beneficial for future tax planning or may rule in or out different types of funding.
Don’t forget that as well as purchasing a property direct from an owner or via a commercial property agent you may also be able to secure a suitable property at auction. This can be a quick way to secure a property but you must be sure that you have carried out all of your due diligence before the auction date and don’t buy a property that you have not viewed!
Our recent blog on buying a property at auction provides key considerations to be given to auction purchases.
To speak to Richard about buying a commercial property, please click here.