Four Vital Things to Know When Letting a Commercial Property

Four Vital Things to Know When Letting a Commercial Property

Buying a commercial property can offer you great returns both in terms of income and capital growth. However, once you have completed on your commercial mortgage and taken ownership of the property you then have to worry about leasing the property, which will often be done through a commercial letting agent.Although your agent may look after much of the specific details of the letting, there are certain responsibilities that you retain as the landlord of the property. Our guide outlines four of the most important things you should know when letting a commercial building.Arrangement or Booking Fees: Banks, like all service sector industries, charge for as many of their services as they possibly can. Banks charge arranging fees for negotiating your mortgage for you. These are often not rigidly enforced and often open to negotiation. They can often depend on other factors such as the interest rate that you are being charged. On average you are likely to pay a fee in the region of 0.5 to 1.5 per cent of the total value of the loan, but it is becoming increasingly common for lenders to add the arrangement fee to the value of the loan.These facilities could include bathrooms for staff and customers, a kitchen or canteen for staff to have their lunch and so on. You will therefore need to think about whether you are prepared to undertake the work to have these put in if the building does not already have them. The interiors may also need updating in order to attract more tenants - especially for retail premises and offices where customers would be going inside.Energy Performance Certificates: These days the law dictates that you must pay for and provide your tenants with an energy performance certificate (EPC). A commercial EPC can be costly, so you will need to keep this in mind. Depending on the building, this can cost a few hundred pounds.Legal and Professional Fees: Buying a commercial property will also involve legal and professional fees. A solicitor will have to be employed to draw up a contract and to gather together all the relevant legal documents that are needed for a property to be bought. Other professional fees need to be taken into consideration such as those for insurance and for site surveying. Costs For Redeeming Your Mortgage Early: If you repay your commercial mortgage early you may have to pay fees to exit the loan. Even changing to a new mortgage product can be classed as exiting the loan, as the commercial mortgage would be repaid in such an instance and so you need to remember this if you want to change lenders. The fees also apply if you sell the property within the early repayment period.Broker fees: A mortgage broker can be a very useful service to employ when you are looking for the best deal, but as with all services, there is a price tag attached. Approaching a broker is a good idea because often they have access to rates that are not available on the high street, but many will charge a fee for their services. The Dangers of Asbestos: You will need to have the building checked over by professionals to ensure that the property does not contain asbestos, as this has been deemed to be a dangerous and toxic substance. If any is found then you will need to ensure that any works are taken care of to ensure that it is not dangerous to anyone inside the building, and any surround areas.As you can see, there are many costs to consider, so you will need a good amount of money behind you before you start thinking about buying commercial premises.

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