When it comes to commercial investments, not many people understand the benefits that you can gain by investing. In essence, a commercial investment is typically done by purchasing a property that will then be leased out to a company or business. The tenant will then be able to use the building to facilitate the selling of their merchandise or services.
While the property is being rented out, cash flow will begin to generate and you can then yield higher dividends as the years progress, which in turn offers higher profits for you. Not only this, but investing in commercial property is also a great way of spreading, or at least diversifying, risk in your investment portfolio.
A commercial property is also considered a good investment due to the long lease structure the UK has, in comparison to the US and Europe. Typically, in the UK, a lease for a commercial property can span anywhere between 8-15 years, depending on a number of factors. This offers more security than renting out a residential property.
In this blog, we’ll take a look at the many benefits you can experience when investing in a commercial property, and how we can help you take every advantage available to you.
Annual Return
When looking at commercial properties from a macro perspective, the annual return that you can yield off the purchase price can range between 6% to 12%. This is dependent on varying factors, such as the area of the property you have purchased, the economy at the time and wider factors, such as a pandemic.
Higher Dividends
From a monetary standpoint, you can earn a higher return from investing in a commercial property in comparison to a residential property. Although the monetary investment is significantly higher, there are many funding options available and there are ways to help you invest in commercial properties.
As mentioned previously, the increased security caused by lengthy leases becomes incentive enough for investors, to ensure a prolonged period of cash flow that comes when a tenant signs up to that 8-15 year lease.
Benefits
When investing in a commercial property, you can gain benefits that may not be available to you otherwise. For example, investors are usually exempt from paying VAT on commercial properties, if the building is freehold and more than three years old.
In addition to this, if the property that has been purchased is under £150,000, then investors will not have to pay stamp duty.
How can JRR help?
If you’re looking to begin or expand your investment portfolio, then JRR Capital Investments can help. The key to utilising the most of any investment is to identify a golden opportunity as soon as it arises. We can use our wide network of stakeholders to identify potential investments early on and advise on how to proceed.
We can also help you get invested in the market at the earliest, and smartest opportunity. This will help you stay ahead and allow you to invest at the optimal time. I
If you’re interested in using our services, then please feel free to contact us.
