There are three main categories of commercial property; retail, office and industrial. Each of these holds many benefits such as a longer lease structure than residential properties which should provide you with plenty of security for continuing income. Here are some considerations to make before investing in commercial property.

Method of Investment
Buying a property outright is the most direct method of investment but also way out of most people’s price range as commercial properties reach into the millions. Instead investing in a fund which holds physical commercial property in its portfolio is usually the best way. Alternatively there are indirect funds which are exposed to property companies, developers and housebuilders. These funds hopefully make a profit from rental income and capital growth of the property.

Property Value
When investing in a commercial property it is important to think about how its value may improve. A good lease can allow for great rent escalation over its period so it is important this is considered before making a purchase. Other factors can affect the rental value as well, such as the building’s location, amenities and more that can lead to increased growth.

The Building’s Condition
Always undertake a building survey before buying or investing in a commercial property as serious issues can prove costly and in some cases stop a deal from happening. If you own or are an investor in a building when it is empty be sure to keep its appearance well maintained to attract potential renters too. This will also increase the chances of tenant (and therefore income) retention during the time you have renters.

Lease Terms
The lease terms agreed between you, as a commercial property investor, and the tenants who will be using it are an important area. Ensure that all parties agree with the terms and that the agreement is studied carefully. Everything should be factored into the finances, such as who has to look after repairs, when rent reviews will come around and any other aspects. Making such considerations should put you in good stead for investing in commercial property either alone or with others.