When it comes to property investments, most people often think of investing in a home and selling it later. However, there is more to the property market than single residential homes. Commercial properties hold huge potential in terms of both income and equity.
Across the UK, Manchester is still considered a great place for commercial property investment. Though it might seem intimidating to get into the commercial property scene, there are major potential benefits. The first step is to find commercial property for sale in Manchester, you can do this by visiting Proplist. Here are some of the potential benefits you get if you decide to go ahead with this plan.
High Income Potential
Since a commercial property will typically be huge, the annual return per property can be quite high compared to other investments. For instance, investing in stocks comes with an average return of about 3% per year. However, a commercial property can earn you as much as 15% in returns per year.
High Equity Potential
Through leveraging, you can increase the equity that went into a commercial property. This simply means you can use borrowed capital to make further investments with realistic expectations that profits will be higher than the interest you pay. Besides that, banks are likely to approve a request for capital against commercial properties since they often have a stable income flow. However, you must avoid over-leveraging your commercial property to stay on the good side of lenders.
Less Risk of Income Loss
In a multiple-occupancy building, there is a reduced risk of income loss since there will always be some tenants that contribute to the operating costs. This is as opposed to a vacancy in a single residential home where you lose 100% of the income.
Great Value Appreciation
If you are looking for commercial property for sale in Manchester, one advantage you have is value appreciation. With investments such as stocks, the market forces, which can change in days, determine the value of stocks. However, with commercial buildings, as long as city regulations are met, you can make a few improvements to the building and grow its value. With a bit of modernization, you can raise the rent or even apply for zoning changes to grow its value. Besides that, the location on which the property is located will grow in value. Sometimes, it can be so valuable that it makes more sense to sell the location and set up shop elsewhere.
Commercial properties are far more complex to set up, but once you get past the initial stage, everything is much easier. This will include the tenants. In most cases, commercial tenants are usually easier to work with than those in residential property. Besides that, drafting a commercial lease often gives many more options. Since the tenants want to find a stable location, most will be looking for a long-term contract that gives them stability. As a result, you do not have to worry about looking for tenants all the time.