A Few Starter Tips For First Time Commercial Landlords

Deciding whether to get involved in buy to let property investments is tough. There are lots of pros and cons to buying commercial property and investing requires a significant amount of homework and research. There are many things that you need to consider before you take your first steps as a buy to let investor.

Not picking the right tenant can soon see all your ambitions and plans come off the rails, it only takes one bad tenant to put people off and jack it all in. It will take time to find your feet and be slow to start up with many upfront costs to pay, so prepare for the hurt before the reward.

Void periods are one aspect that you should plan carefully for. There will be periods when your commercial property is empty - in between leases - and so you need to make sure you have the cash available to continue making your commercial mortgage payments even if you have no tenants in the property.

As a landlord you are directly responsible for the upkeep and maintenance of any properties you own. IF a boiler breaks or if a water pipe is leaking, then you the landlord must fix it. If you are not in the area, perhaps away on holiday, or if you own properties that are in different parts of the country, you will need to make sure that you have someone you can employ to make repairs for you.

Commercial lettings will need to have a high standard of maintenance in order to attract high calibre tenants, so this is something else that needs to be kept on top of to ensure that the property is desirable. This will also help to prevent the property from being empty.

Many people believe that being a landlord is simple, and that a property can simply be signed over and the tenants can be 'left to it', but as you can see from what we have looked at above, there are many things that need to be looked after in a rental property, regardless of the property type.

It is essentially a second job, so the more experience you gain, the easier it will be to see problems coming round the corner and stop them. Once you have your system in place it will soon be financially rewarding, keep up on the regulations and hard work and the finances will start to flow. Complying with regulation is mostly a onetime thing, when it's done it will only ever need a tweak or two, reducing the financial burden somewhat.

Not all letting environments are the same. Do you want to let student houses? Do you want to let to professionals? Do you want to own commercial premises? Do you want to let retail space? The answer to these questions will determine the shape of your future business. Get clear on what you want and you stand a far better chance of getting it.

Remember to obtain buildings insurance for your commercial property. Most commercial mortgage lenders, similar to residential lenders, will require such insurance to be obtained as a condition of the mortgage, and the insurance will usually need to be obtain before contracts are exchanged.

The final point we want o offer is this, make sure both you and the tenant know who's responsible for what and it's written down to avoid arguments and legal cases. This is vitally important in commercial properties where health and safety law is stringent. Gas and electricity safety checks and matters along these lines should be the responsibility of the business and tenant, once this is all crystal clear, the blame game and finger pointing can't fester for too long.


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Timothy Frodsham writes for Just Commercial Mortgages the UK's No.1 site for the latest commercial mortgage rates and commercial property finance news.