Commercial property investment is a possibility – even in these times, you just need to know how!
By Glenn Armstrong
Just the other day I was speaking to a colleague of mine who owns over 30 commercial units in my area which he rents out to small businesses and start ups. Up until quite recently his business was working out very well, until the last few months, when up to 25% of his tenants have been unable to honour their contracts due to the financial climate, they have asked for new reduced rates, if not they will have little choice but to take their business elsewhere. One of his tenants was even offered a year’s free lease elsewhere. There will always be a good commercial market for retail, takeaway and restaurant premises, but the number of companies looking to downsize or keep expenses to a minimum is on the rise.
It is evident that there is a downtown in the current commercial property sector; this is only just starting to bite whereas the residential sector is finally seeing green shoots. I was watching the TV the other evening and it showed the effects on the commercial property market on UK high streets; in my nearby town Dunstable, over a quarter of the high street shops were shown vacant. High street businesses are closing down as they’re being pushed out of the market by internet stores offering better deals and a more convenient way to shop. Therefore, there are deals to be had; you need to be buying for cash flow purposes and you want to have a decent cash back percentage when re-financing and to be cash back positive every month. This is a safe deal for any would-be investor.
However, the UK’s commercial property market’s medium-term fundamentals are sound and significant signs of recovery are likely to be evident before the end of this year. Currently there are not as many bargain deals out there in the commercial field in comparison to residential but if you’re in the right position, there are always deals to be made.
Having had dinner with Dolf de Roos the other evening, (the most successful commercial property investor that I know), he‘s actively buying at the moment; the concept of no “money down deals” are out there, it’s a case of negotiating and buying at a bricks and mortar valuation so as to create a safety net for the future. The most important thing about how to invest in commercial property is to understand the market and what you can buy with your investment. If the commercial property market picks up it will offer more liquidity in the market and will create a knock on effect for all property sales.
As American Investor Warren Buffett said:
“Be fearful when others are greedy, and be greedy when others are fearful”
In 2004 Glenn Armstrong began to invest in property; now he is a 49 year-old millionaire whose portfolio of 193 residential properties is worth in excess of £30 million. Glenn has gone on to share his knowledge with would-be investors up and down the country in their dream to become truly financially free; at least 24 of his students are now equity millionaires.
For more information about G & A Property and to sign up for a free 5 part e-course on how to buy property please visit www.glennarmstrong.com.
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