Anyone here done BTL non-residential property?

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  • Anyone here done BTL non-residential property?
  • konabunny
    Member

    A relative has some sort of pension arrangement that makes it preferable to buy non-residential property instead of leaving the money in a fund (I don’t understand the arrangement but let’s just assume that she has to buy non-residential property).

    Does anyone have any experience or tips in this? Most important factors are regularity of income and lowest exposure to risk rather than maximizing short term rental income. Instinctively I’m hesitant about shops because they’re hard to keep occupied, according to my old landlord. Am I wrong?

    Premier Icon Stoner
    Subscriber

    SIPs (Self invested Pensions) may not hold residential BTL but you can put commercial property in one.

    First port of call is your local commercial agent. Lot sizes for the most attractive commercial property can be quite high compared with residential. If your relative is looking for security, and simplicity then they are really after a long unexpired (10+yrs) FRI (fully repairing and insuring) lease to a solid company. But the income yield on that will be reflectively quite low – say 4-6%, and realise that the capital value of the property can quite often fall as the lease approaches its expiry date – the value is mainly in the lease, not the bricks and mortar. They need to consider what happens on the expiry of the lease and whether a tenant is likely to renew or vacate, and if vacant how much a new tenant will cost to get. They will need to appreciate how upward only rent reviews work (usually 5 yrly) and what they can expect in terms of rental inflation of the term of the lease remaining. SDLT is applicable usually.
    There’s loads more to it than this, afterall it’s what a lot of qualified chartered surveyors do for a living, but I wouldnt take that as meaning they’re all any good at it though 🙂

    Premier Icon piedi di formaggio
    Subscriber

    Get her to buy you a pub

    You can thank me later!

    Premier Icon Flaperon
    Subscriber

    Will you find yourself liable for business rates if it’s unlet for more than six months?

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