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Please read these guidelines to assist you in completing the search form.
We can only provide properties according to your specifications. The wider you set these the more we will send
you so if you can narrow your search criteria down the information will be more
manageable.
Type of Property required
Here you need to consider what your
investment objectives are. Are you more comfortable with shops, offices or
industrial? Do you wish to buy straightforwardly for the investment yield and
any long term capital growth that may occur (remember that property values can
go down as well as up). Or are you interested in improving a property or
possibly redeveloping it?
Some properties are mixed use. Typically what the
property world describes as “Shops & Uppers” which are retail on the ground
floor and residential above. You need to asses whether you are happy with a
long term commercial lease which will require little ongoing management and
what may be a buy to let above that requires regular ongoing management. You
also need to recognise that lenders view mixed use differently and you cannot
put residential property into a SIPP.
Location
You can buy property without viewing it although this is not to be recommended and for a fee we can attend
the premises and provide you with a report and photographs.
You will, as you
would with residential investments, need to take account of the local market in
commercial property as well as the national trends. As with all property
location is everything and prime high street sites in sought after towns are
expensive whilst property maybe just 100 yards away may be worth much less.
Maximum Value
This is the most you wish to invest. Remember you will need to
pay fees to lawyers, surveyors and ourselves. Lenders will normally only fund a
maximum of 75% of commercial property and sometimes less depending on the risk
and return. An example is:
| Purchase price |
£500,000 |
| Stamp Duty |
£20,000 |
| Acquisition fee |
£5,000 |
| Survey |
£1,250 |
| Legal fee |
£2,500 |
| VAT of the above |
£1,531 |
| Total Investment |
£530,281 |
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| Mortgage at 70% of purchase price |
£350,000 |
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| Funding required from purchaser |
£180,281 |
Who are you investing for?
We will not send you properties with residential parts if you are investing with a SIPP (or on
behalf of a company pension fund).
What is your reason for investing?
The capital values of commercial property are driven by the yield. In other words
the rent that can be obtained on the property. If you are investing for income
you would be looking for a higher yield but remember as with all investments
the higher the apparent return the higher the risk is likely to be.
Development Opportunity
Remember if you go for development opportunity you will need
capital for the development itself. In addition development often requires
planning permission and you may need professional help with this.
Quality
The final thing you need to consider is the quality of the investment. If you buy a
freehold whose tenant is a high street bank or maybe an office with a
government department the tenant would be considered to be of the highest
quality (or in the jargon of the property world to have an excellent covenant).
To most people this means you are likely to get the rent paid on time and for
the duration of the lease. Any repairs at the end of the lease will be done
properly. For these tenants don’t expect a high yield. The other end of the
scale may be a small off license let on a short lease in a parade where there
are 3 other similar shops.
Timing & Speed
Property is not normally a particularly speedy process as anyone who has bought a house or flat will be
aware. The exceptions to this are auctions. You will normally only get 2 or at
best 3 weeks to get all the legal details and view the property before buying.
When you buy at auction you will be required to put 10% down on the fall of the
hammer and the balance in 4 weeks. This means you must have finance arranged
and solicitors set up.
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