Your Guide to Thriving: Buying a Commercial Property in Surrey

Buying a Commercial Property in Surrey

Buying a commercial property in Surrey, UK can be a lucrative investment given Surrey’s economic stability and proximity to London. Here’s a guide to help you navigate through the process and thrive in your investment:

Define Your Objectives

Determine the purpose of your investment. Are you looking for rental income along with capital appreciation, or establishing your own business? The two are quite different.

• Rental Income: By purchasing a commercial property and leasing it out to businesses, you can enjoy a steady stream of income. Surrey’s proximity to London and its thriving economy make it an attractive location for businesses, potentially resulting in higher rental yields.
• Capital Appreciation: Surrey’s property market has historically shown strong growth trends. Factors such as increasing demand, limited supply, and infrastructure development could potentially lead to significant capital gains in the long term.
• Establishing Your Own Business: Some investors may purchase commercial property with the intention of establishing their own business operation. By owning your business premises, you have greater control over costs and are able to customise the property to suit your needs. There are also potential tax benefits.
• Diversification of Investment Portfolio: Commercial property often exhibits low correlation with other asset classes such as stocks and bonds. Diversification can help spread risk and enhance the overall stability of your investment portfolio.
• Legacy and Wealth Preservation: Some investors view commercial property as a means of preserving wealth and creating a legacy for future generations. Owning tangible assets like commercial properties in a desirable location like Surrey can provide long-term stability and potentially serve as a valuable inheritance for heirs.

Financial Planning

Assess your budget and financing options – engage the services of a business and commercial finance broker. Factor in not just the purchase price but also additional costs like stamp duty and legal fees. Determine the deposit you can afford to make. In the UK, commercial mortgage lenders typically require a higher deposit compared to residential properties, often ranging from 25% to 40% of the property’s purchase price. Interest rates on commercial mortgages are also typically higher when compared to residential mortgages. Assess the expected return on investment (ROI) of the commercial property investment, 7% and higher is average. Understand the legal and tax implications of owning a commercial property in Surrey. Consult with legal professionals and tax advisors to ensure compliance with regulations and to maximize tax efficiency.

Engage with a Local Commercial Agent

Consider seeking the advice and services of a local commercial agent. They can provide valuable insights, help you find suitable properties, and negotiate on your behalf. Clearly outline the criteria for the commercial property that you seek, including location preferences, property type (e.g., office space, retail space, industrial property), size, budget, and any specific features or requirements. Good agents have a database of properties on their books and resources to identify suitable properties that meet your criteria sold by other agents. Once a property has been identified, with the agents help, a competitive offer can be formulated and agreed. Upon reaching an agreement with the seller, your agent will guide you through the process towards exchange and completion, including guiding you through the legal work and liaising with your commercial solicitor.

Remember, investing in commercial property requires careful planning and due diligence. By following these steps and seeking professional guidance where necessary, you can maximize your chances of success in Surrey’s commercial property market.