Investment idea Buy to Let
- Thread starter Cypriot
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H
Hombre
As long as you can get a commercial mortgage/loan at 75% LTV, I would buy a small office investment for £200,000, direct from the landlord/vendor. 
You should be able to get a small office well-let to a triple A financial covenant like e.g. Co-operative Insurance Society Limited, at a rent of £22,200+VAT pa, increasing to £27,000+VATpa following rent review in 2012. Lease expiry 2017.
Even the management of this asset is paid by the tenant and performed by the landlord. You simply sit back, post acquisition, and receive a rent cheque every 3 months for £5,550+VAT, (rising to £6,750+VAT per quarter after 2012.)
Worth a look I'd say
You should be able to get a small office well-let to a triple A financial covenant like e.g. Co-operative Insurance Society Limited, at a rent of £22,200+VAT pa, increasing to £27,000+VATpa following rent review in 2012. Lease expiry 2017.
Even the management of this asset is paid by the tenant and performed by the landlord. You simply sit back, post acquisition, and receive a rent cheque every 3 months for £5,550+VAT, (rising to £6,750+VAT per quarter after 2012.)
Worth a look I'd say
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B
Big Pete
As long as you can get a commercial mortgage/loan at 75% LTV, I would buy a small office investment for £200,000, direct from the landlord/vendor.
You should be able to get a small office well-let to a triple A financial covenant like e.g. Co-operative Insurance Society Limited, at a rent of £22,200+VAT pa, increasing to £27,000+VATpa following rent review in 2012. Lease expiry 2017.
Even the management of this asset is paid by the tenant and performed by the landlord. You simply sit back, post acquisition, and receive a rent cheque every 3 months for £5,550+VAT, (rising to £6,750+VAT per quarter after 2012.)
Worth a look I'd say
That works if you can rent it out .. what if it sits empty ?? the UK is heading for the worst depression in history so i would NOT go that route ..to many empty units as it is..
Sits empty , who pays the mortgage and the Rates ?
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H
Hombre
Yep and others. I am a chartered surveyor and run a property investment company (Est 1998). In general, we buy office property throughout Scotland, get them let to triple A covenants and then sell individually. We sell investments to individuals with SIPP/property-based pension funds.
The CIS investment above would show initial net annual return of over 10.5% on acquisition, increasing to 12.88% after review in 2012.
You won't get that in a bank!
The CIS investment above would show initial net annual return of over 10.5% on acquisition, increasing to 12.88% after review in 2012.
You won't get that in a bank!
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H
Hombre
This is a what an IFA would term direct investment in commercial property. But it really is no different to buying a flat already let to a residential tenant.
As with any letting, the main risk is that the tenant goes bust. But this is C.I.S. Ltd who are a triple A financial covenant.
The only real risk is that once the lease expires you are left with an empty office property. That will be in 2017. You have ample opportunity in the lead up to this to erect 'To Let' board and re-let the premises, which will be refurbished by the tenant prior to leaving. A surveyor/agent can advise you on this nearer the time, if necessary.
In the interim, you just keep taking the money as detailed above or your SIPP does! Unlike a residenial let, you are not going to get a tenant complaining that the washing machine is broken!
As with any letting, the main risk is that the tenant goes bust. But this is C.I.S. Ltd who are a triple A financial covenant.
The only real risk is that once the lease expires you are left with an empty office property. That will be in 2017. You have ample opportunity in the lead up to this to erect 'To Let' board and re-let the premises, which will be refurbished by the tenant prior to leaving. A surveyor/agent can advise you on this nearer the time, if necessary.
In the interim, you just keep taking the money as detailed above or your SIPP does! Unlike a residenial let, you are not going to get a tenant complaining that the washing machine is broken!
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B
Big Pete
I wouldnt buy anything at the moment property wise in the UK , do what i am doing just sit tight and wait as the prices tumble .. next year
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H
Hombre
That is of course your choice but I can assure you market levels in commercial property have already met rock bottom and are starting to rise - certainly in central Scotland. That's why we are selling!
FTAOD, I would expect anyone considering buying commercial property to take proper advice from both a solicitor and chartered surveyor experienced in the market and location.
Interestingly, a surveyor's advice is normally free should acquisition not materialise.
What return is your £50,000 giving you now? What will it be worth in 12 months? I have always felt it a shame that most people will happily buy a buy-to-let residential flat, but for an equivalent sum could have bought a small office with less property management hassle, better net income return and longer uninterupted security of tenure/income stream. Even doing a credit check on the tenant is easier and more accurate.
FTAOD, I would expect anyone considering buying commercial property to take proper advice from both a solicitor and chartered surveyor experienced in the market and location.
Interestingly, a surveyor's advice is normally free should acquisition not materialise.
What return is your £50,000 giving you now? What will it be worth in 12 months? I have always felt it a shame that most people will happily buy a buy-to-let residential flat, but for an equivalent sum could have bought a small office with less property management hassle, better net income return and longer uninterupted security of tenure/income stream. Even doing a credit check on the tenant is easier and more accurate.
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