The recent recession and credit crunch has had a strong adverse affect on commercial property. With increasing numbers of vacant premises and decreasing property values, investing in this sector has been tough over recent years. However, figures from the Investment Management Association in late 2010 showed that the commercial property recovery may have begun. Values and interest are rising as investors return to this sector. Even though the commercial property sector has been hit hard, there are still many reasons why investing in commercial property is a good idea, and we look at some of them in this article. Tenants look after the properties: Any residential landlord looking for easier tenants to deal with might be attracted to commercial lets. Residential tenants, however well you get on with them, will never, ever look after your property the way you would. The same problems tend not to emerge with commercial letting, people who rent shop space from you tend to know very well that if they skimp on the cleaning, customers will not visit their business. Similarly, businesses that operate from shabby offices rarely inspire much confidence from the people who visit them. In many cases (and obviously dependant on the letting agreement) commercial tenants are required by their letting agreement to fully maintain and repair the property they are letting. This differs to renting a house out, where you as the landlord are required to deal with the wear and tear issues, maintenance and other items such as the gas and electrical equipment inspections. Accountability for such items will normally fall on the business in a commercial let. Also, unlike with residential contracts, tenants often have much of the responsibility for maintenance and cleaning on their own shoulders, and so they are less likely to leave the property in a state of disrepair, as they would have to foot the bill if they did. Commercial Mortgages Are Available To Assist Purchases: Buy to let residential mortgages are now more and more difficult to come by since the market crash, and thus it is very difficult now to get a buy to let property for business purposes on a residential property. Since many landlords defaulted on loans, lenders are reluctant. Rents are higher and more certain: Many investors like commercial properties because of the excellent yields that they offer. Commercial rents are often higher than residential rents, generating additional income on a monthly basis. Another advantage of commercial leases is that they are generally subject to an annual review which generally results in the rent being increases for the subsequent year. Commercial property can be purchased with a commercial mortgage: It has become increasingly more difficulty to get a mortgage and especially a buy to let mortgage. And as seems the way these day as a mortgage product starts to disappear from the market those that remain, charge higher rates. Those that were considering the residential buy to let market may well be better off looking at commercial lets instead. With commercial lending looking to increase over the next one to two years this could be the prime opportunity to switch your asset base to a more profitable market. If the UK and the global economy is recovering this will in the main be led by business. And as business starts to boom then business will need more space. More office space, more factory space and more warehouses, not to mention the shops and service industries. All driving the commercial property market onwards and upwards.
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