Investing in commercial rather than residential property can be an extremely attractive business proposition. Lease agreements tend to be significantly more straightforward than their residential counterparts, and the tenancies are generally far longer. The combination of the two makes such investments highly appealing.
However, whether you rent out shops, offices, surgeries or warehouses, it’s important to ensure you have the right insurance package in place in order to fully protect your investment. Landlord insurance for commercial property owners should cover all the necessary areas.
Although there is no obligation to arrange insurance for your commercial property unless specified by your mortgage lender, the only way to protect your investment against potential losses from vandalism, accidents or fire is to have such a policy in place, as suggested by quotezone.co.uk. Shopping around for the best insurance quotes is the best way to ensure you end up with the best possible deal.
Government regulations put a greater burden of responsibility on commercial landlords for ensuring the health and safety of their premises than is the case with residential landlords. You will need to ensure there is sufficient space, ventilation,and lighting for the tenants to be able to operate their business, provide drinking water, toilets and washing facilities and ensure the building is maintained at a reasonable temperature.
To continue what is mentioned as above, you also have an obligation to identify any hazards in the property and make them safe,and this includes checking gas and electrical equipment and meeting all applicable fire safety regulations. In the case of commercial property, you may also need to take responsibility for the management of any asbestos.
The location of a commercial property has a significant impact on its value,and the criteria are often very different to those that make residential properties valuable. For example, a flat on a noisy, busy high street would probably be seen as undesirable by many while a shop or office in the same location might attract a significant premium.
There are two main types of agreement for letting commercial properties. Lease agreements run for a fixed period of time and provide the landlord with long-term security and stability. A lease agreement will usually include a break clause to let either you or your tenant end the lease early if circumstances change.
A license agreement is a more flexible way of letting out a commercial property on a short-term basis. This can be a great option for small businesses or start-ups that are not in a position to commit to a longer term. A licence is generally cheaper than a lease but does not provide long-term stability.
As tenants of commercial premises rely on the property in order to run their business, the implications of poor maintenance or other issues can be extremely serious and need to be dealt with as promptly as possible. In the case of a small commercial property, you may be happy to manage the place yourself,but for a larger property, you may want to hire someone to act on your behalf. Be aware that, if you employ anyone to oversee or maintain your commercial premises, you will also need to have employer’s liability insurance in place.
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