Advice for Investing in Commercial Property

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My first impression of IPIN was being struck by the courtesy and understanding of the IPIN staff. Something which I thought was reminiscent of a bygone era. IPIN were very professional in the management of my investment.

Waleed N.
IPIN member and investor

When I first read about the Secure Exit Strategy, I thought the 25% return too good to be true, but IPIN have proved me wrong, as, I invested in The Flaxby Secure Exit Strategy in October 2009 and exited in June 2010, 9 months later with a whopping 48% return.

Andrew Nicol
IPIN member and investor

People at IPIN are not pushy, they are friendly, patient, helpful and easy to reach during and after business hours, when it suits me best. This is what I expect from an advisor. I am planning to further expand my portfolio based on the results achieved by the IPIN team.

Mr. V.
IPIN member and investor

As we approach retirement conservative and secure investment programs are the only ones we considered. The IPIN SES program fits our investment goals perfectly and has performed as advertised. Who can argue with a 26% annualised return in the current economic environment?

John and Nancy Howell
IPIN members and investors

There were two main aspects that attracted us to this investment; the strength of the commercial proposition itself (the product was eminently marketable) and the extensive security provided by the escrow and other associated legal arrangements.

Mr and Mrs S. Davies
IPIN members and investors

After almost two years of working with IPIN, I am convinced this is one of the best wealth-building investment vehicles available.

Larry L
IPIN member and investor

Docklands is the second successful SES unit I've bought-into. For me, this still represents the best thing I can do with my money - not only is it secure, but the returns are guaranteed too. Another thing I really like is how the projects to which IPIN apply the SES always seem to be really sound - they're not just good SES investments, they always have a lot going for them as traditional investments.

Mr. M. Green
IPIN member and investor

I invested in the Secure Exit Strategy (SES) as an addition to my existing property portfolio. I was very surprised when told that I had been exited within just over 6 months. I was extremely happy with the returns I made and decided to reinvest those returns with IPIN.

Mr Robert D
IPIN member and investor

As the first of my investments with IPIN, I was keen to see an early result on one of my units even though I understood I should be prepared for the maximum 36 month term. I was delighted when I received a call to tell me that the first of my units had exited in less than 3 months.

Mr J Donald
IPIN member and investor

I invested on September 21st 2009 after some searching questions. I have been kept informed of progress over the whole period and on February 25th 2010 my unit was sold. The strategy has worked extremely well for me and I elected to reinvest into another SES venture using 1,013 GBP of the return plus the original investment.

Mrs. E. Davies
IPIN member and investor

The process of securing a commercial property investment is in many ways similar to the purchasing of a Buy to Let investment: you need to carry out research into the type of premises required and the surrounding area, then borrow money from the bank and collect rent from a tenant. If you’re thinking of expanding a property portfolio which already consists of residential property, it makes perfect sense to create some variety by adding commercial property to your list of assets, especially at a time when house prices are seeing a decline.

Typically, the lease for commercial investment property will run for around 10 years. In the retail sector, this can stretch to 20 years or more, compared with just six to 12 months for residential leases. One of the main benefits of this is that you don’t have to endure the hassle of finding new tenants every year. Another is that you don’t have to worry about times of void (when your property is empty and you have no income to cover your mortgage payments). Another advantage of investing in commercial property is that you are leasing the property to businesses, which are generally considered more reliable than individual tenants.

The success of your commercial property investment will rely heavily on its location. Securing a purchase in a prime location is much more likely to generate a good yield than doing so in an area less popular with investors and tenants. Thinking about the area from both residential and business points of view is advisable, as companies are often interested in setting up their offices in towns and cities which are desirable to potential employees.

Once you’ve researched into the type of commercial property and its surrounding area, you will need to arrange the financial side of things. It may sound tedious but it’s in fact the most important aspect of any transaction of this sort. Ensure that your repayments are less than the rental income you will receive as if you want to borrow in order to invest up to the maximum amount otherwise you may find that the rental income only just covers your mortgage repayments. This means that even a small increase in interest rates could leave you in the red, if you’re not adequately covered.

Cover your back by ensuring that the lease provides for upward-only rental reviews, say every 5 years. You also need to ensure that your tenant signs a full lease for repairs and insurance deeming them responsible for the cost of any damages. You can also insist on a ‘privity of contract’ lease, which will ensure that your original tenant is responsible for paying the rent should they decide to sub-let the space.

*This page is provided for information purposes only and should not be construed as offering advice. IPIN is not licensed to give financial advice and all information provided by IPIN regarding real estate should never be treated as specific advice or regulations. This is standard practice with property investment companies as the purchase of property as an investment is not regulated by the UK or other Financial Services Authorities.