Maximising the benefits from commercial property
Recent changes in tax regulations around residential properties, and in particular Buy to Let properties, has resulted in increased interest from investors considering commercial properties as an alternative.
We’re often asked to advise on how to ensure a positive return on these investments so we thought we’d lay out a few key areas to consider.
- Seek to ensure that the majority of the property costs are paid by the tenant, things such as property management fees, legal fees and surveyor’s fees where appropriate. Also ensure that when properties are vacant empty Business Rates concessions belong to the Landlord. All of these will reduce the cost of ownership.
- Maximise the available space. Consider corners, walls, roofs, nooks and crannies, and use them to maximise the potential to increase the revenue. It is possible to sometimes increase revenue through things such as advertising hoardings or siting cash machines and mobile phone masts in the building, all of which can produce additional rent. Also consider whether re-designing the car park can provide the building with more spaces and thus potentially increase the revenue.
- Think outside the box, could you actually create additional space? Homeowners will often convert basements or lofts to increase floor space. These same rules can apply to commercial properties too. There’s even the possibility sometimes in providing another floor.
- Would a change of use generate an increased income?
- Take care of the basics, make sure that future rent reviews are noted and not missed.