If you own an empty commercial property, you might wonder whether it is best to sell or rent it?
This guide will discuss why you should consider selling your commercial property before business rates make it difficult.
In this guide, we will cover:
- How do you sell a commercial property?
- How long will it take to sell a commercial property?
- Commercial property selling fees
- Should I lease my commercial property?
- How to find a tenant for a commercial property
- Dealing with tenants
- Average letting agent fees for landlords
- Is now a good time to sell a commercial property?
Table of Contents
How do you sell a commercial property?
If you do not want the hassle of dealing with tenants and need a quick sale, selling your commercial property is the way forward.
Understanding who your property will attract as a buyer is key. Buyers will want the ideal type of property for their business in the right location and within their budget.
When weighing up whether to sell your commercial property, you would also need to consider:
- Planning Permissions, Use Classes, and lawful use certificates
The planning class of your commercial property will also be of interest to buyers. A1 class commercial property allows one to open a retail shop and if a buyer wishes to change the class to, say, A2 (financial services) or A3 (restaurant), he/she will have to apply for planning permission.
- Commercial energy performance certificate (EPC)
if your property has a low EPC rating, it may be difficult or even illegal to sell it.
- Asbestos survey
If you are trying to sell an outdated property, you will need to have an asbestos survey conducted beforehand.
Reasons why a commercial property might not sell are often complex. Selling a commercial property requires a lot of due diligence, and with very few buyers for commercial properties, it becomes harder to sell.
If you think, ‘I want to sell my commercial property fast’, why not get in with us? We will buy any commercial property, guide you through the process, pay your legal fees and complete the purchase at a date that works for you.
Owners of commercial properties in England & Wales are now facing high business rates following the end of business rates holiday. If you are the owner of vacant commercial properties which cannot be let due to lack of demand, then you will be facing a huge business rates bill.
If you are a frustrated property owner, now might be a suitable time to consider selling your commercial property before the inevitable rush.
How long will it take to sell a commercial property?
Agreeing a sale on a commercial property can take from a couple of weeks, but completion can take several months as a best-case scenario.
We have seen commercial property stuck on the market for several years with no offers. During this time, commercial landlords still must pay business rates.
Whether you have an office, a warehouse or a light industrial unit, the local demand for your type of property and your price will determine whether you can sell it.
We speak to commercial property owners daily, and their concern is the uncertain future of commercial properties. A few landlords have rented their properties at nominal rents so that their tenants can pay business rates. This is not a long-term solution, and if you are worried, please do not suffer in silence and call us.
It is important to remember that your commercial properties have worked hard to produce income over the years for you, and now might be the time to move on. You might be reluctant to sell your commercial property for less than you paid. Unfortunately, capital gains are never guaranteed, and it makes sense to release equity now to invest elsewhere.
With the rise in interest rates and changes in how people work and shop, the risk is that commercial property values will fall further as business rates become a real liability.
If you are concerned your property will take a long time to sell and do not have time to wait. We offer a 20-day guaranteed sale with the cash going straight into your bank.
Commercial property selling fees
If you are considering a traditional sale, commercial property can be complicated, and you must hire a commercial agent.
Whilst selling with a commercial agent can take some of the hard work away, there is going to be a lot of extra cost involved, and there is no guarantee of a quick sale. You will have to pay for legal fees, too. Costs include:
- Commercial Agent Fees
Not all commercial property agents are good. Before instructing one, check their fees, which can be as much as 3% to 10% of the final resale or lease price.
- Solicitor fees
Costs for solicitors can be up to £2,000 or even more if you are selling a large commercial property. Do not forget you will still have to pay your solicitor if buyers pull out of the sale. This is called an abortive fee.
- Removal costs
If your commercial property has plant, machinery, or furniture, then it is your responsibility to have them removed.
Overall, this can knock tens of thousands of pounds from your property value, meaning you will walk away with less than you deserve. However, selling your property through a commercial agent is not the only option.
Here at Property Saviour, we promise to buy your commercial property, pay the legal fees, and clear the property free of charge. We will also promise to beat any cash offers and offer you the best price for your property.
How to find a tenant for a commercial property?
You can put a To Let board outside your property and wait for the phone to ring, or hire a commercial property agent to market your property. They will list your property on Rightmove or Zoopla.
Often, commercial properties can be on the online market for up to a year if they are not in a desired location or are not in excellent condition.
Not everyone has time to wait; if you do not, contact us. One of our expert advisors will guide you through our service and ensure you get the best and quickest deal.
Should I rent my commercial property?
Renting a commercial property means that you must decide what type of business a tenant is likely to run from your building.
Using a solicitor to draft a lease agreement is the best way forward because if you use a simple Heads of Terms or a DIY document, your tenant could obtain occupancy rights.
Leasing is complicated, and if you get it wrong, you could end up in a sticky situation with your tenant and end up costing you tens of thousands of pounds.
Specialist solicitors can charge £1000’s because of the complex issues that can arise with commercial property leases.
A professional solicitor will prepare your lease and give you legal advice. However, depending on the availability of a solicitor and the complexity of lease negotiation with your tenant, the entire process can take several months. Not only is this process incredibly frustrating for you and your tenant, but the risk is that he/she can also find another property in the interim.
Dealing with tenants
If you are lucky enough to find a tenant quickly, there is no guarantee they are going to make your life easier and give you the monthly rent agreed.
The trouble with tenants is you cannot guarantee they will pay on time, and they can cause damage and chaos in your property.
Often, commercial landlords will consider hiring letting agents to deal with the day-to-day maintenance of their commercial property, but as always, costs are involved.
Average letting agent fees for landlords
Letting agent fees are payments that both landlords and tenants make to letting agents for the services they provide.
The amount you pay will depend on the level of service you are getting, but this is a rough guide to the letting agent fees paid by landlords:
- Finding a tenant and arranging referencing will typically attract a one-off fee which can be as much as 10% of annual rent.
- Rent collection will be charged as a percentage of the rent at around ten per cent.
- Full management is also a proportion of the rent, but this service can attract a fee of up to 15 per cent of the monthly sum.
Landlords that refuse to pay this end up feeling overwhelmed by the amount of work involved. If you do not want this hassle, look at how we can help.
Is now a good time to sell commercial property?
If you do not want to pay a commercial agent to sell your property and do not have time to wait, we will help you.
We regularly get enquiries from sellers fed up with commercial estate agents. The average time to sell a commercial property is up to 12 months. This is because the sale of commercial property requires a buyer to have a 40% deposit before he/she can apply for a mortgage.
Property Saviour will guarantee to buy any commercial property in any condition in England or Wales. As genuine commercial property buyers, we will guide you through the process, pay your legal fees and complete at a date that suits you. There is no need to clear the property; we will take care of that.
You can decide when you want the sale to complete.
