Three key questions for investing in commercial property

Have you considered investing in commercial property? With a variety of property types, locations, and leasing options, it could offer a way to diversify your portfolio.

Here are three questions to get you started.

1. Do you have savings or equity?

Healthy savings could be essential to getting the ball rolling as commercial property loans often require a higher initial deposit. However, if you already own property, you may be able to leverage your available equity in other properties instead.

Some lenders may have specific loan criteria for commercial properties, so speaking with a lending expert could make navigating the process smoother.

2. What are your must-have property features?

From office blocks to cafes and warehouses, there’s no shortage of variety in commercial property. Some businesses will need specific layouts and features to function, which is good to keep in mind if you plan to rent the property.

Where you buy is just as important to consider as the property itself. Location plays a big role in determining business foot traffic, accessibility, and visibility, and may affect your rental yield.

Commercial property values are often influenced by rental returns. So, a property that’s attractive to potential tenants could be a gamechanger.

3. Are you prepared for the extra responsibility?

Commercial property comes with some ongoing responsibilities beyond your initial financial commitment. For example, you’ll need to think about extras such as leasing, insurance, and building maintenance.

Depending on the property, commercial lease terms could be five years or more. If you intend to rent, you’ll need to be prepared for any future repair costs and if property management is needed.

Your local Liberty Adviser may be able to offer support to help manage any overheads more confidently and answer any questions you might have about commercial property loans.