First foray into commercial property- advice please

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    First foray into commercial property- advice please

    Hi all.
    I’m a complete novice at being a commercial property owner so please be gentle!
    Just had my offer accepted today on a small commercial building which has been used in the past for retail. It’s unoccupied presently and there will be a period of time before I find a tenant for it. I’m worried about costs mounting up if it stays empty for a long period so could somebody please give me a list of what I need to pay for whilst unoccupied? I’m guessing electric, water and I’m assuming there will be business rates to pay. Any tips how to keep these to a minimum would be greatly appreciated…

    #2
    Building insurance: Insurer requirements likely to require regular inspections, premium will be higher than if occupied and you might it it difficult to get cover. Of course if you don't have a mortgage then insurance isn't necessary if you are willing to risk it.

    Protection from squatters and/or vandalism and/or vermin as necessary

    Electricity and gas (if any) will be deemed supply so higher costs than if occupied.

    Business rates, subject to any reliefs.

    Water rates.





    Comment


      #3
      If I was you I would get hold of the type of Estate Agent who offers Commercial premises for sale or rental and take advice as to what rent it would bring in if you listed it with him. Also you should have an Electrician check to see if it would pass an Electrical Safety Check Also find out from the Council what use class the planning permission was for as you would need to find out what sector of business you could rent it out to.
      Good Luck.

      Comment


        #4
        The op's question was about whilst the premises are unoccupied.

        As and when it comes to letting, Piffy''s suggestion to contact a commercial property agent is good. The agent's advice should /would include asking rent and minimum acceptable, term of lease, tenant break clause and so on. In some cases a premium payable by the incoming tenant might be possible: Normally, each party would be responsible for its own legal costs in connection with the new lease.

        Also you will need an EPC otherwise the premises cannot be marketed let alone let. If the EPC rating is F or G then you would need to do whatever work necessary to get the premises up to.minimum EPC rating. The lowest acceptable energy rating is E.

        If the new lease is to e for 7 years or more then you will need to have a Land Registry compliant plan as the tenant will have to register the lease. Where the premises comprise the entire building then an OS extract might be enough.

        It is prudent to ask your solicitor to let you have the CPSE forms (pre-contract enquiries) to complete in advance as that will save time for despatching the documents to the tenant's solicitors.

        Regarding Use Class, your solicitor should advise on this during the conveyancing for your purchase. Amongst the enquiries made of the seller is what was the previous use of the premises was and when did that use start.

        Your solicitor should also tell you whether and what uses are restricted and/or prohibited under the title deeds.

        Comment


          #5
          Thank you guys for your replies. The premises was used as a shop but I believe the use classes changed recently and there is more room to manoeuvre without having to apply for change of use.

          Comment


            #6
            Originally posted by rentreviewspecialist View Post
            The op's question was about whilst the premises are unoccupied.

            As and when it comes to letting, Piffy''s suggestion to contact a commercial property agent is good.
            Seriously? - so you wouldn't advise someone who's buying a commercial property to establish his / her return on investment, market conditions etc BEFORE buying then.

            Madness.

            My views are my own - you may not agree with them. I tend say things as I see them and I don't do "political correctness". Just because we may not agree you can still buy me a pint lol

            Comment


              #7
              Originally posted by rentreviewspecialist View Post
              Regarding Use Class, your solicitor should advise on this during the conveyancing for your purchase. Amongst the enquiries made of the seller is what was the previous use of the premises was and when did that use start.
              All of which would (should) be in the original Sales Particulars for the property - its a bit late after you start paying solicitors fees.


              Sorry, but where does the term "specialist" in your username come from?

              My views are my own - you may not agree with them. I tend say things as I see them and I don't do "political correctness". Just because we may not agree you can still buy me a pint lol

              Comment


                #8
                Originally posted by landlord-man View Post

                All of which would (should) be in the original Sales Particulars for the property - its a bit late after you start paying solicitors fees.
                ?
                Why should they be and even if they are then no certainty the information in sales particulars is correct. The usual 'place' to ask is the CPSE



                Comment


                  #9
                  Originally posted by landlord-man View Post

                  Seriously? - so you wouldn't advise someone who's buying a commercial property to establish his / her return on investment, market conditions etc BEFORE buying then.
                  As i said the op's question was about whilst the premises a unoccupied.

                  Since the op has had his/her offer accepted one would reasonably the person to have established their return on the investment, market conditions, etc before making the offer.

                  Comment


                    #10
                    Originally posted by rentreviewspecialist View Post

                    As i said the op's question was about whilst the premises a unoccupied.

                    Since the op has had his/her offer accepted one would reasonably the person to have established their return on the investment, market conditions, etc before making the offer.
                    NO - your advice was "As and when it comes to letting,." he should speak with a commercial property agent. you then went into further detail - which is a little late in the process don't you think?

                    Perhaps your "specialist" comment should have been "I hope that you have done x, y and z to establish your ROI etc"
                    My views are my own - you may not agree with them. I tend say things as I see them and I don't do "political correctness". Just because we may not agree you can still buy me a pint lol

                    Comment


                      #11
                      The market for office lettings is weak right now, which may mean for a far sighted investor that there are bargains to be had. For a thoughtful investor the best time to buy is when the market is in shock.

                      Comment


                        #12
                        Originally posted by landlord-man View Post

                        NO - your advice was "As and when it comes to letting,." he should speak with a commercial property agent. you then went into further detail - which is a little late in the process don't you think?

                        Perhaps your "specialist" comment should have been "I hope that you have done x, y and z to establish your ROI etc"
                        I think you will find that "As and when it comes to letting, Piffy''s suggestion to contact a commercial property agent is good." I then went on to suggest what the agent could advise on. So it was Piffy''s suggestion that introduced speaking to a commercial property agent, not mine.

                        As to whether I should hope that the op has done (as you say) depending upon the type of property and rent level many landlords do not involve commercial property agents in their decision making.

                        I do not understand what point you are trying to make with your acerbic remarks but you are doing yourself disservice.


                        Comment

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