According to Clive Emson Auctioneers there appears to be a growing number of residential property investors looking to add commercial properties to their portfolios amid recent changes to buy to let mortgage interest relief and stamp duty.
The news story in Property Investor Today said that some buy to let (BTL) investors are moving from a residential-based investment portfolio to commercial investment portfolio. The idea behind this is to have a more varied strategy so their investments remain profitable.
James Emson from the auction house was quoted as saying: “One interesting trend for 2017 we have noticed is increasing demand for commercial premises or mixed use properties as investment opportunities”. He added that “Canny investors are spotting good yields within the commercial property sector and are allying purchases with their residential portfolios”.
This change in direction and diversification of investment property portfolios is supported by a news story issued earlier this month in The Telegraph that revealed the number of BTL investors moving to commercial property has tripled in the past three years.
Again, changes to tax relief for residential landlords and a growing concern over other legislation making it harder for landlords to make a profit on their residential investments are cited as a reason for the growth.
Why invest in commercial property?
The Telegraph article says that typically higher yields, less costs (generally tenants are responsible for many of the costs that a residential landlord would have to pay for such as insurance and repairs) and longer leases make investing in commercial property attractive.
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