The property market is booming at the moment, with house prices constantly going through the roof. This is making plenty of landlords a lot of money, especially in desirable areas such as London, but it also means there is a lot of competition. Another area that is seeing a resurgence is the commercial property market.    

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If you’re thinking about making some serious investments then commercial property could be the answer. There are various benefits, such as commercial property having much longer leases than residential ones. Here are a few essential pieces of advice for anyone starting to invest in commercial property.

Buy Local

Investing in commercial property within an area you are familiar with is a lot more likely to lead to success than buying up offices hundreds of miles away. You will be more aware of what areas are desirable for businesses, whether based on surrounding properties, transport links or other factors.

Investing in local commercial property is especially profitable for those who already have a property portfolio in the area. It can help you find tenants easier by knowing businesses and people in the place who will be interested in making use of the properties you invest in.

Choose an Appropriate Investment Method

There are two main ways to invest in commercial property. You can invest directly by buying a property yourself or in a fund which holds physical property in its portfolio, such as GVA Worldwide, or indirectly by investing in funds exposed to property companies, developers or trusts.

For a more hands-on approach buying directly and leasing out the shops, warehouse, office or other commercial space is the best option. If you’re just after a good return on your investment without getting too involved with the property and renters then a more indirect approach will suit you better.

Be Aware of Risks

As with making any kind of investment, there are numerous risks to be aware of. Finding tenants for an empty property is the first challenge and depending on circumstances such as the property’s location and leasing price, this can be difficult. There is a risk no-one will rent the property at first which can damage your finances.

When it comes to selling a commercial property too, getting a buyer may be hard. Even investing in indirect funds can pose risks if they only hold a handful of properties or they are all in the same area. Still, the risk can be worth it if you find tenants for ten or more years.

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