On 18/01/2014 16:14, Tim Watts wrote:
....
Normal people (particularly ones who have at some point been tenants) at
least have a basic understanding of the domestic market - what's
expected, "would I live there" and rental rates (easily checked by a
rummage on Zoopla etc).

Commercial rents based upon a rate per square foot for each of
workshop/warehousing, office space or retail area. A browse around
estate agents in the area who specialise in commercial properties will
quickly give you an idea of what the going rates are in the area.

Vetting new tenants is a fairly well understood process as is dealing
with them when they default (acknowledged that sometimes this is not
always easy, back to good vetting in the first place).

You do much the same with commercial tenants, but an established
business should be able to furnish you with accounts and a start-up with
a business plan. If you are a bit dubious, you can do something
relatively safe, like give them a licence to occupy for a cash sum up front.

I would not have a clue about commercial[1] - except that I see a lot of
commercial property sit empty for long periods.

[1] Perhaps shops. They might be OK. But again, many can sit empty for
long periods and shops almost always want to remodel and fit upon moving
in, a problem domestic tenants don't raise.

As with any investment, it comes down to what level of risk you are
willing to accept and the returns should reflect the risk. For
industrial units, 8% is about the minimum for buy to rent. My cousin did
have details of a shop to buy, with a well-established large business on
a long term lease without breaks. I don't recall the exact figures, but
ISTR that gave about 15% return on capital.

Colin Bignell