What Is Commercial Property: Everything You Need to Know

There's a lot of buzz in the property world about commercial property

But what is commercial property?

In this article, we are going to be covering the key points you need to know to get started in commercial property.

So let’s jump straight in!

What Is Commercial Property?

Before we get started, it’s important to understand a common question that people ask, which is “what is commercial property and how does it work?”

In simple terms:

Commercial property is real estate that is used for business activities.

It usually refers to buildings that house businesses.

But it can also refer to land used to generate a profit, as well as large residential rental properties.

Some examples of it include:

  • Shopping centres 
  • Supermarkets
  • Office spaces

Check out this FREE 4 part development video series! Kam Dovedi talks about Permitted Development rights, shows you inside some of his property projects and MUCH MORE! 

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How Does It Work in London?

Now that we’ve answered the first question, it’s just as important to know what commercial property is in your own property investing area.

At Premier Property, we have 4 key investment areas and one of them is London.

This is why we are covering this right now.

Even though you may not be investing in London, the same rules will apply to all cities in England.

Selecting the right property in London, in the right area, with the right facilities, is vital to the success of any business.

Your office space and location will underpin your company culture.

And the capital’s property market is booming.

There are sites of all shapes and sizes available...

From traditional office space and shop fronts to warehouse and fast-emerging co-working space.

What You Need To Consider When Starting You Are Starting Out

Moving onto your practical steps…

It’s extremely important to do your research and be prepared when starting out. 

Doing this will ensure that you are reminding yourself what steps you need to take to get started in it.

Invest time in finding out about lots of different strategies.

There are so many different ways you can start investing. 

Some invest from property funds and JV’s, so see what’s out there for you that can really help you take your commercial property developing to the next level!

Watch this video to see me show you around my new property development with my business partner and we talk about our plans of what to do to the property! It might give you some tips for your own commercial property project…

Also remember to contact local independent commercial agents

You may know that there are residential sales agents and sometimes they have a different department dealing with local commercial deals.

Ask your contacts for the names of their colleagues and an introduction. This will get you in touch with people who can help you get started.

What is Commercial Property - The Advantages

1. It can be a solid investment

Commercial property has traditionally been seen as a good investment.

The initial cost of the building, and of refurbishing it ready for tenants, will probably be much higher than a residential buy-to-let property.

But, the overall returns are likely to be much higher too

And because you’ll be dealing with a company rather than individual tenants, many common issues associated with renting out residential property won’t apply.

This type of property investment offers more security, relative to the returns, than the stock market or residential property, as income is guaranteed at a set level for a certain period of time.

2. Commercial Property Comes with A Long Lease

The typical London office lease is between 10 and 15 years, or approximately eight years elsewhere in the UK.

This is much longer than a buy-to-let landlord might expect for a residential property, which generally have leases of six months to a year.

Also, while residential leases have statutory protections in place for tenants, commercial leases are contractual.

Commercial property landlords have more protection under the law if the tenant fails to pay rent on time, or if they break any other contractual obligations.

What is Commercial Property - The Disadvantages

1. Not having the correct and current information

If you don’t know what you’re doing, then you will end up having a bigger loss.

So it’s extremely important to get the right knowledge so that you can move forward and get started in a safe and secure way.

To ensure that you do this, feel free to join Kam Dovedi, the founder of Premier Property, and development expert, Kingsley Hughes in the Commercial Property, PD and Development 2 Part Workshop. Click here to register your place now ==>

2. Bigger Initial Investment

Direct investment is not usually a valuable option for the smaller private investor due to the high values associated with this type of property asset.

You should also expect some large capital expenses as repairs to a commercial building are likely to be costly.

3. Considering Property Management Costs

While some of the maintenance of your commercial property may fall to the tenants under your lease agreement, you will need to be prepared to handle at least some of the maintenance issues yourself.

You will need to hire trades people to undertake maintenance and repairs, often at short notice.

If you want to be hands-off, you will need to hire a property management company.

Ensure that you have factored in these costs when deciding whether commercial property is a good investment for you.


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