Chris Protopapas ~ London Based Property Consultant
General Commercial Investment Principles
Considerations when investing in commercial property differ quite substantially from the residential market except for the most important aspect of location.
The general principle is that the lower the yield the less risk and less growth potential. Initial rental yields can be as little as 2% for prime London, to over 10% in some parts of the UK.
The considerations when investing in commercial properties are many and the cost or yield will have a direct relationship on some of the following;
- Location
- Security of Tenant
- Length of Lease
- Income - Yield
- Rent Reviews and Likely Potential Increases
- Alternative Uses (in the absence of a tenant)
- Development Potential
- Funding Considerations