18th September 2019
At Taylor Freeman Kataria, we know that Investing in property in the Ilford, Goodmayes and Seven Kings area is a fantastic way forward. But before investing in any property, it is worth looking at the pros and cons in adding a commercial or residential property to your portfolio. Of course, this choice may largely depend on your personal preference and finances. Here we take a look at the advantages and disadvantages of both options.
Residential Property
Pros
- There is a healthy supply of residential properties, so it is easy to find these new investments
- It is easier and cheaper to get a mortgage as there are less legal requirements involved
- You can instantly add value by renovating and modifying the property
- It is easy to value and estimate long term growth
Cons
- Renovation could be time consuming and costly in order to get the property to a decent standard to let or sell
- If property prices fall you could end up not making enough when renting the place out
- As the owner, you are responsible for all maintenance and repairs for the property
- Short rental leases could mean periods where the property is empty and hassle trying to always find tenants
Commercial Property
Pros
- Commercial properties tend to have longer leases so are therefore more secure
- You can opt for buildings of any size to suit your needs
- Maintenance and repairs tend to be the responsibility of the tenants
- Renovation is often minimal as tenants prefer to fit the property to their needs
Cons
- If the tenants’ business does not work out, then you are at risk of them going bust and you having to find a new occupier quickly
- Mortgages for commercial properties tend to be higher
- It can be difficult to accurately value a commercial property without professional advice
- Longer leases can mean you have quite a wait should you decide to sell
The Verdict
If your budget and situation allow, then as an investor in property in the Ilford, Seven Kings and Goodmayes area, it would be ideal to have a mixture of both residential and commercial properties in your portfolio. Even better, a shop with a flat or apartment above would be the perfect investment. There are pros and cons of investing in both types of properties and it really does depend on the requirements and future plans of the individual investor. Whichever option you go for it is important that you do thorough research first. Viewing the property more than once is a good idea.