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5 Myths About Investing in Commercial Property

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Whether you are a business owner looking to own your own premises or a property investor interested in the commercial market, there are lots of good reasons to put your money into commercial property. Unfortunately, there are some myths surrounding the ownership of non-residential that can put you off. But investing in commercial business could be the step you need to take in order to move your company to the next level – so don’t let these five myths stand in the way of your purchase.

Myth 1: It’s just too expensive

Perhaps one of the largest myths in commercial property is the idea that this kind of investment is too expensive for it make sense for your business. Of course commercial properties do require a significant investment but ultimately it works out the same as a residential property purchase – a lender will establish what you can afford to pay back and you will be able to finance the purchase in the same way that you would finance a mortgage.

Lenders typically offer more favourable rates for commercial investments due to the fact that these sorts of property purchases have more profit potential, as well as a stable form of income. Naturally you will need to go through the maths yourself and work out what your business can afford to spend, but ultimately owning your own commercial property allows for huge savings in the long run as you are not having to use up a large portion of your income on rent.

Myth 2: You don’t need a survey

Another of the main myths surrounding commercial property is that the rules of residential properties don’t apply – namely that it is a fine to buy without having any kind of survey carried out. It is a logic blind spot for many business people who believe that because a property is for commercial use, you don’t need to follow the kind of sensible practice that you would always do for your own home.

Commercial property surveys are absolutely vital; they provide insight into the condition of the building. If you buy an office and it turns out to have serious underlying problems, you may need to spend a significant amount of money fixing them. This can adversely affect the profitability of the investment.

It should also be noted that when you are choosing the surveyor to carry out your survey, you need to opt for a company with specific experience in your local area. For example, if you are based in London, you should work with a firm that specialises in commercial buildings in the capital, such as Bradley Mason.

Myth 3: If a property is for sale, something must be wrong with it

One thing that puts people off buying commercial property is the idea that it would be sold if there was something wrong with it. But actually there are plenty of reasons that commercial properties get sold – the owner might be relocating to large premises, or need to sell an asset to deal with cash flow problems. The best thing that you can do is to do your own research, including the survey we talked about earlier.

Don’t miss out on your opportunity to buy an ideal property because you are worried that it is being sold for devious reasons. In general, most sellers have completely honest intentions.

Myth 4: Commercial property investment is high risk

Another worry for buyers is that purchasing a commercial property is too much of a risk. In reality, there are very few investments that offer such an excellent and predictable rate of return as property. The commercial property market is a little more complex than residential but it is still the case that in most scenarios, the risk you are taking on is far outweighed by the reward.

The key is always to balance your risk, so scrutinise the terms and conditions that come with buying the property so ensure that you are getting what you think you are. Commercial property does not need to be a high risk investment if you plan for it properly.

Myth 5: Commercial property is too time-draining to manage

Buyers additionally worry that managing their own commercial property will be too much of a burden on their time which makes the purchase unsustainable. Of course it is true that owning your own commercial property does require more time that renting but by no means does this time need to cause a problem. Maintenance and management can be easily outsourced, making the whole process of owning the property much easier than you expect.

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