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Many private investors have dipped their toe in the residential buy-to-let market. Some consider putting their money into commercial property as a way of spreading risk across their portfolio. 

Commercial property can often offer a lower cost alternative to residential investment. It can also offer more security, as typical lease lengths are between 5-10 years, much longer than you would get from a residential property, where tenancies of six months or a year are more typical.

Investing your money in commercial property isn’t all plain sailing however; it isn’t just a question of paying over the money and collecting the rent every quarter. Depending on which sector the property is in (retail, office, industrial, etc.) and the quality and location of the building, an investor in a commercial property should anticipate net rental returns of typically between 5 per cent and 10 per cent per annum. 

To maintain this level of return however, your investment has to be actively managed. This isn’t just about making sure the rent is paid on time and ensuring the fabric of the building is well looked after. There is a lot more to holding commercial property than might at first meet the eye. 

Clearly the collection of rent and insurance, and for multi-tenanted commercial properties, service charge, is vitally important. An investor should attempt to create a good relationship with its tenant, and maintain regular contact. Such connections should help the investor landlord identify at an early stage signs that a business tenant is not performing so well and who might be at risk of at best: paying rent late, or at worst: not at all.

Our Offices

Alnwick

Russell House
Greenwell Rd
Northumberland
NE66 1HB

Land Agency
01665 606 800

Hexham

Priestpopple
Hexham
Northumberland
NE46 1PS

Estate Agency
01434 608 980

Land Agency
01434 609 000

Newcastle

Shakespeare House
18 Shakespeare St
Newcastle Upon Tyne
NE1 6AQ

Commercial
0191 261 0300

Northallerton

80-81 High St
Northallerton
North Yorkshire
DL7 8EG

Estate Agency
01609 773 004

Land Agency
01609 781 234

Sedgefield

50 Front Street
Sedgefield
Co. Durham
TS21 2AQ

Estate Agency
01740 617 377

Land Agency
01740 622 100

Dumfries

114 Drumlanrig Street
Thornhill
Dumfriesshire
DG3 5LS

Land Agency
01848 332 414