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5 Types of Commercial Property Every Novice Investor Should Know About

Posted by : Premraj | Posted on : Sunday, January 5, 2020

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If you are looking to invest in a commercial property it would be prudent to get to know the different opportunities that are available and what aspects of each investment type you need to think about so that it aligns with your financial ambitions and risk profile.

There are some highly distinguishable and different types of commercial property to think about adding to your investment portfolio and here is an overview of the main commercial property sectors.

Office options

It is fair to say that the landscape for purpose-built offices has changed in recent times with the growth in people who work remotely but even if traditional office space may not be in such high demand there are other opportunities to consider in this sector.

There are numerous small businesses and startups that need some sort of office space and that is where serviced offices have become so popular.

Investing in office space requires a bit of foresight and plenty of local research to see what the demand for space is like and whether you might generate more income from a service office setup.

Understanding retail

If there is one type of commercial property investment that has come under close scrutiny in the current financial climate it is retail premises.

Some high-profile high street casualties will help focus investor’s minds on the risk/reward aspects of investing in retail commercial premises.

It is also useful to understand the various classifications for retail units (A1 to A4) in the UK, which provides an indication of the type of retail business allowed to trade from the space, whether that is a food business or a traditional shop unit.

Understanding the scope of industrial units

Retail classifications might seem confusing but industrial properties can be even more complex to understand from an investor’s perspective.

Factories, manufacturing bases, and specialist processing plants all come under an industrial classification and it definitely pays to get a clear understanding of what sort of commercial property you might be investing in and what type of business will want to trade from there.

Public buildings

If you are a novice investor it is probably unlikely that you will encounter what is termed as a non-residential building, as they tend to present investment opportunities that are more suitable for more experienced investors who understand all the risks as well as the rewards.

However, if you like the idea of converting a redundant church building, for example, that would be classed as non-residential in a commercial building environment.

Investing in the hospitality sector

Last but not least, a popular type of investment for novice commercial property investors is the hospitality sector where buildings that run as hotels, guest houses, or motels all come under the investment spotlight.

The fundamental point to remember is that whatever type of commercial property investment you are considering it is a good idea to get to know a suitable property professional who can guide you through all the classifications and offer help with any planning changes or licenses that need to be obtained.

 

 

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