I cut my teeth in the world of residential buy-to-let in 1990. But it wasn't until 2003 when I discovered the joyous world of commercial property buy-to-let.
The attraction of commercial property was quite clear:
- Long term, ten year commercial leases instead of having to find a new residential tenant every 6 or 12 months;
- Commercial leases are FRI (Full Repairing & Insuring). This means that your commercial tenant is responsible for many of the obligations which would normally be yours, with residential tenancies. (ie: Your tenant will pay for buildings insurance and for repairs);
- Commercial rents are paid quarterly in advance, instead of monthly as with residential tenancies. (This is very good
for the overall cashflow of your rentals business);
- The management effort required to run a commercial property portfolio is much lower than a similar sized residential portfolio.
Today the case for investing in commercial property buy-to-let has never been more compelling: