Regardless of whether you’re an experienced property hand or a novice, the key to maximising the return on your commercial property investments depends on following the same essential ground rules.  

Below we outline what these are and how to go about employing them to achieve the best returns.   

Understanding the benefits of Commercial Property Investment.

Commercial properties such as office buildings, retail spaces and industrial facilities can offer unique advantages that set them apart from residential properties. These include stable income streams, diversification to manage risk, healthy appreciation, and tax benefits.

Though before committing yourself to an investment, you need to know where to invest, and in what type of commercial property, to produce a higher return on investment.

Here’s where thorough market research is vital to help you determine the health of the market, the demand for commercial properties, the overall economic outlook and growth potential of the business area you’re looking to invest in. 

Financial Analysis and Due Diligence

Critical to the consideration of a commercial property investment is comprehensive financial analysis and due diligence. Only these can provide you with a realistic evaluation of the property’s financial performance, rental income, running expenses and capital appreciation potential.

This will require a thorough property inspection to identify any possible maintenance problems that could affect its value or deter tenants. 

Get the location right

The location of a commercial property affects its value in various ways, not only when it comes to its future financial growth potential but for attracting the right tenants.

Factors such as access to good transportation, local amenities and long-term area development plans all add up to higher returns.

Know your lease agreements

Knowing the detailed terms of your lease, rental rates and duration is central to the success of your investment, and can help you decide potential rewards/risks of a property.

Long term stable lease agreements can ensure you have a steady cash flow; shorter leases may allow for rental rates to be adjusted based on market conditions.

Choose the best tenant

For obvious reasons it’s essential to choose reliable and creditworthy tenants who are committed to long-term leases, and just as important to maintain good tenant-landlord relations.

Building a good relationship with your tenants can help avoid legal headaches and may even benefit your annual revenue.

Proactive property management

The benefits of effective, full time property management that oversees the day to day operation of your commercial property portfolio can be crucial to maintaining the value of your investment.

By implementing effective budgeting and financial strategies to ensure buildings are operating efficiently, an experienced and qualified property management firm will understand the importance of proactive communication that fosters long-term and positive relationships to help improve tenant retention.

How Louis Taylor can help

Acting on behalf of a wide range of private, corporate and trust clients, our team provide a fully comprehensive day-to-day, end-to-end management service for properties ranging from single buildings to complex multi-let properties. 

For information on our Commercial Property Management services, please contact Claire Kerr, Graham Hulse and Ian Cotterill, or call 01782 260222.