The commercial property market in the UK has seen a big increase in demand from investors after the uncertainty that came from the decision to leave the EU. This led to record levels of investment in London and with the UK’s profit potential for commercial property much greater than the US and Europe due to long lasting leases, there are many ways to make money in commercial property in Newcastle.
Install solar panels
As the technology involved in solar panels becomes more and more accessible, the cost of installation starts to drop. With various government incentives including the feed-in-tariff (FIT) subsidising buyers who invest in solar panels, this is a great way to create a new, passive, and lucrative income stream for your commercial property.
Many companies are now feeling the pressure of being ‘green’, so a solar installation can help a landlord’s property appeal more to potential tenants, which in turn will attract quicker tenancy and possibly higher rates. In addition, the requirement of leased properties to have a minimum EPC rating of E as of 2018, also strengthens support for a solar PV installation due to the fact it can contribute to an improved EPC rating.
Another potential method of making money with solar panels is to make a private agreement for the electricity produced by the solar PV to be sold to the tenant at an agreed price. This means landlords can receive a higher and faster rate of return in the long term if they’re buying outright.
If the property meets specific criteria, there might also be an opportunity for a free solar solution that is funded and maintained entirely by a third-party finance investor, with electricity sold back to the landlord, or directly to the tenant, through a power purchase agreement over a 25–30-year term.
Have billboard placements on your commercial structures
With digital marketing becoming so prominent, it’s easy to forget about the reach and impact a good billboard can have. They’re still a very high impact marketing tool, making up 62% of the £3.7 billion that is spent on outdoor advertising annually.
In some cases, this type of advertising gives you the unique opportunity to monetise your commercial property. By adding marketing to your exterior walls and offering billboard placements to clients, you can develop a creative and possibly highly lucrative stream of income. However, this will depend to a certain extent on where your building is located and if it is on a busy road. You will also need to check that any billboard placements won’t be a conflict of interest with your existing tenants.
Rent out office space
This is probably one of the simplest and most traditional ways to make money from commercial property, no matter the economic climate. Whether you own business premises that has extra space or have invested in commercial property as a third-party, renting out rooms and units can be a big income generator.
There are many ways you can do this too. First, you can rent out office space via long-term leases, securing regular tenants over an extended period of time. Additionally, you could rent out individual meeting and function rooms if you have the space, which will secure you a consistent stream of short-term bookings. If you’re interested in buying commercial property and need commercial conveyancing solicitors in Newcastle, we can help.
Make your property more valuable
No matter if you own a residential or commercial property, one of the best ways to make money and have income this way is to add value. Even though this is often easier with residential houses, commercial property owners are also in a good position to be successful as long as they budget effectively and get a clear insight into the needs of their target clients.
The methods you use will also depend on the purpose of your investment. For example, as a third-party owner you can design the layout of the building to include as many individual units as possible. Investing in a clean outside and modern inside is another way you can add value to your commercial property, as you can strive to achieve a substantial return on your investment.
Be a tax-efficient property owner
If you want to optimise the available returns through any form of investment, you must position yourself as a knowledgeable and tax-efficient operator. There are a number of laws and items of legislation that allow commercial property owners to reduce the amount of tax they are required to pay, which helps to lower operational costs and increase profitability over time.
One of the easiest and most effective ways to do this is to invest in property as a company instead of as an individual. This is because corporation tax rates are typically lower than those applied to individuals and sole traders. Even though this could mean that you pay more in capital gains, your associated tax rate will normally fall by investing under a business name. If you can use this same principle and attention to detail to other related costs like insurance, you will be able to minimise your expenses and maximise the most of your overall, rental yield.
We hope you have found this guide helpful as these steps are designed to help you make the most of your commercial property investment. If you’re getting started in property and need help from professional commercial conveyancing solicitors Washington, Toomey Legal are here to support you.
Our team of commercial property solicitors has extensive experience and knowledge of the industry and can help you make smart investments that will benefit you now and in the future. Contact us today to find out more about our conveyancing services.