Is buy to let commercial property? This question has been on the minds of many landlords looking to diversify their investments beyond residential properties. As the buy to let market faces challenges, commercial property presents an intriguing alternative.
Table of Contents
Is buy to let commercial property?
Buy to let can indeed extend to commercial property, offering landlords a different avenue for investment. However, it’s important to understand the key differences and considerations.Commercial buy to let involves purchasing property like offices, shops, or warehouses to rent out to businesses rather than residential tenants. This type of investment comes with its own set of rules, risks, and potential rewards.
How commercial buy to let differs from residential
• Longer lease terms – Commercial leases often run for 5-10 years or more
• Higher potential yields – Commercial properties can offer better returns
• Different tenant responsibilities – Businesses typically handle more maintenance
• Specialised mortgages – Commercial mortgages have different terms and criteria
• Varied property types – From retail units to industrial spaces
Types of commercial property
Commercial property encompasses a wide range of buildings:
- Retail units and shops
- Offices
- Industrial units and warehouses
- Leisure facilities like gyms or restaurants
- Healthcare properties such as clinics or care homes
Commercial buy to let mortgages
Securing finance for commercial property differs from residential buy to let:
• Higher deposits – Typically 25-40% of the property value
• Stricter lending criteria – Lenders assess the property’s potential income
• Interest rates – Often higher than residential mortgages
• Repayment terms – Can be interest-only or capital repayment
• Fees – Arrangement and valuation fees may be higher
Pros & cons of commercial buy to let
| Pros | Cons |
|---|---|
| Longer leases | Higher initial costs |
| Better yields | More complex management |
| Diverse portfolio | Specialised knowledge required |
| Less wear and tear | Harder to find tenants |
| Triple net leases common | Affected by economic downturns |
Finding commercial tenants
Securing reliable commercial tenants requires a different approach:
• Work with commercial estate agents
• Network with local businesses
• Advertise in trade publications
• Attend industry events
• Consider using a commercial property management company
Tax implications
The tax landscape for commercial property differs from residential:
• Stamp Duty Land Tax rates vary for commercial property
• Capital Gains Tax applies differently to commercial assets
• VAT may be charged on commercial property transactions
• Different rules for mortgage interest tax relief
Is commercial buy to let right for you?
Before diving in, ask yourself:
• Do you understand the commercial property market?
• Can you handle longer void periods?
• Are you comfortable with larger transactions?
• Do you have the necessary capital for higher deposits?
• Can you navigate more complex legal and regulatory requirements?
How to get started in commercial buy to let?
If you’re ready to explore commercial property:
- Research the market thoroughly
- Speak to commercial property specialists
- Build a network of professionals (solicitors, accountants, surveyors)
- Start small with a single property to gain experience
- Consider joining a commercial property investment group
Managing commercial properties
Effective management is key to success:
• Regular property inspections
• Prompt maintenance and repairs
• Clear communication with tenants
• Staying on top of legal and regulatory changes
• Considering professional property management services
Stress-Free Commercial Sale
If you’re considering selling a commercial property, Property Saviour offers a hassle-free solution. We buy any type of commercial property quickly for cash, regardless of its condition or tenant situation. Our process is straightforward, with no fees or hidden costs.
Get in touch with Property Saviour today to discuss your commercial property sale. We can provide a no-obligation offer and complete the purchase at a timescale that suits you.
Sell with certainty & speed
Property Saviour Price Promise
- The price we’ll offer is the price that you will receive with no hidden deductions.
- Be careful with ‘cash buyers’ who require a valuation needed for a mortgage or bridging loan.
- These valuations or surveys result in delays and price reductions later on.
- We are cash buyers. There are no surveys.
- We always provide proof of funds with every formal offer issued.
We'll Pay £1,500 Towards Your Legal Fees
- No long exclusivity agreement to sign because we are the buyers.
- You are welcome to use your own solicitor.
- If you don’t have one, we can ask our solicitors for recommendations.
- We share our solicitor’s details and issue a Memorandum of Sale.
Sell With Certainty & Speed
- Our approach is transparent and ethical, which is why sellers trust us.
- 100% Discretion guaranteed.
- If you have another buyer, you can put us in a contracts race to see who completes first.
- Complete in 10 days or at a timescale that works for you. You are in control.
