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100k savings earning sweet f/all got chance to purchase a local shop that has tenant in paying 200 per week, the shop will cost me the full 100k.
but imo the 800 per month far out weighs what i get from the bank, there is also a large unused garage at the back so there is the opportunity for extra income.
Am i mad?
If i am tell me why cause I can not find a downside.
but imo the 800 per month far out weighs what i get from the bank, there is also a large unused garage at the back so there is the opportunity for extra income.
Am i mad?
If i am tell me why cause I can not find a downside.
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What sort of condition is the property in? Does the site have any potential?
Is the tenant holding a full repairing lease and for how long?
Have you factored in the expenses. Landlords are now liable for the business rates on voids after 3 months for shops. Drawing up and serving leases will cost you at least a £1k, unless the current lease puts the burden on the tenant.
If the tenant vacates you will have to have an asbestos survey, electrical survey and an energy survey. If none of these have been carried out you can kiss goodbye to another £5k.
Commercial property at the moment is truly aweful. Your current potential yield is a little under 10%. The risks are enormous of defaulting tenants or having to grant rent holidays to stave off voids.
I don't even think we're at the bottom of the market.
Is the tenant holding a full repairing lease and for how long?
Have you factored in the expenses. Landlords are now liable for the business rates on voids after 3 months for shops. Drawing up and serving leases will cost you at least a £1k, unless the current lease puts the burden on the tenant.
If the tenant vacates you will have to have an asbestos survey, electrical survey and an energy survey. If none of these have been carried out you can kiss goodbye to another £5k.
Commercial property at the moment is truly aweful. Your current potential yield is a little under 10%. The risks are enormous of defaulting tenants or having to grant rent holidays to stave off voids.
I don't even think we're at the bottom of the market.
I'd be very careful sticking your cash in a shop, "local" shops are on the way out. If the tenant goes it could be very difficult finding someone else.
Depending on what part of the country you're in, there are plenty of cheap terraced houses around. In the Manchester area you can pick one up for about 60/70k. Stick it with a management company, they will rent it and collect the rent less about 8% with no headache to yourself.
You would easily get £425/month less the 8% giving you £4600 a year.
Much better than risking your cash in a commercial property.
Depending on what part of the country you're in, there are plenty of cheap terraced houses around. In the Manchester area you can pick one up for about 60/70k. Stick it with a management company, they will rent it and collect the rent less about 8% with no headache to yourself.
You would easily get £425/month less the 8% giving you £4600 a year.
Much better than risking your cash in a commercial property.
Why an abestos survey?
Read this.
http://www.cl-voelcker.com/asbestos/asbestos-survey.asp
Read this.
http://www.cl-voelcker.com/asbestos/asbestos-survey.asp
should mention own the two shop next to this one, the plan is for development of land rather than keeping it for years.
long term tenant who is doing on in recession.
long term tenant who is doing on in recession.
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