Feb 23, 2010
Financial Forecast for Your London Commercial Property
In this time of restless global finance there are many reasons why the purchase of commercial property is not a favourable option. And in any such market the time to lease has never been more appealing an option. ‘Why buy now?’
This is the question on many lips. In a commercial property market which is so unsteady it is the uneducated individual that put’s all their equity eggs in one basket. For a long term investment in commercial property, buying still may remain an area which could make a decent return, however it is essential that you way up all the pros and cons and get sufficient advice from a commercial property expert. Assessing the area that you are investing in is also of paramount importance.
If you are thinking of letting or buying commercial property in London then you will not only need the insider knowledge of the area, again the best people to contact are specialists in commercial property, but you will also need to assess long term plans for the future of the area. When looking into this it can often be that the area has plans for better transport links and redevelopment making it a good place to invest in commercial property. If you are leasing commercial property you may be looking into leasing a variety of different types of commercial property.
There are three main categories for commercial property, these being retail commercial property, industrial commercial property, and commercial office space. By renting any of these types of commercial property rather than buying you will be in the most positive financial situation. Firstly, you will not have any negative equity, and secondly you will only have rent to consider which will help for forward planning and cash flow forecasting which is always welcome in a difficult financial global market. If you are thinking of leasing commercial office space London then there is a large amount of office space available.
A popular option for renting commercial office space is serviced office space. This option generally means that you will pay a one figure monthly charge and there will be many additional services included in this price. Some typical inclusions for this fixed rate commercial property charge are electricity, in fact all utility bills, council tax, phone line rental and own phone line, broadband internet, manned reception, shared use of facilities like a kitchen and bathroom and in many occasions shower facilities and security. If you are a start up business then this area of commercial property London is often the most appealing option.
You can also often get short term flexible contracts on serviced office space and if you are working alone you may also want to consider the option of a hot desk in one of London’s prime central locations. Or if you are working from another area of the country you may wish to consider a virtual office with a London postcode.
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Frequently question about commercial property
Commercial property???Is it better to use an interest only loan or a conventional loan when buying land? This will be for the sole purpose as an investment and I hope to hold only 2-5yrs. Property is zoned commercial
About Author
Commercial property London expert MAtt Grimes has worked in the commercial property industry for over 25 years and is highly regarded in the industry. He has had many of her articles published in the national press and he has a significant online presence in the commercial property news sector.
how did the Assessor come to assess the garage as "commercial". They would have had to have some reason. Did you ever claim the garage as a deduction on your income taxes for business purposes. We need more info from you. The Assessor wouldn't just out of the blue claim a garage as commercial, unless they had a good reason.
First things first.
You are already paying all of the interest, so any additional payments would be principal reductions, which offer no tax benefit to you.
Unless you are a real estate licensee, your rental business constitutes passive income, and you are limited to a maximum of $3,000 in deductions against earned income. All passive income sources are aggregated, so you can deduct a maximum of $3,000 per year, regardless the number of different businesses or properties or activities that count as passive income.
Additional losses may be carried back up to three years or forward up to seven years, but are lost forever after that.
Paying down principal is probably not in your best financial interest, as it will lower your rate of return on your investments. See a tax planner or financial planner to find ways to maximize your investment returns on an after-tax basis.
I would recommend that you use the extra money to fund a tax-deferred retirement vehicle, rather than reducing principal. If set-up properly, you can use your retirement account as a business partner for your real estate investing and gain a whole host of tax benefits. Again, see a professional in your area.
Good luck to you!
You can get a loan, but a commercial one, not residential.