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Thanks for a very interesting read so far. I have been looking on and off at this strategy for a number of years now, but unfortunately prices are still very high (£500k+) in the SE for units that have further potential.
One of the main questions I have is with the increasing rents for the commercial premises every X years. Do those of you that own these premises look to keep the rent at the same rate for X years, as often it can be a pincer movement on the tenant if they're not earning much more than they were say 10 years ago and end up wanting to throw in the towel as it's not worth carrying on?
I really like the 2x smaller outlet idea, that is smart thinking.
Just another couple of quick question re the upstairs flats, do you prefer buildings where there is front access, as going round the back can often be a bit dodgy especially at night? Also, I've found most of the flats are usually one large unit, say 4 beds etc. spread out over several floors. Have you guys had much luck converting these to say one flat on each floor?
Morning all, I've just purchased a mixed use building, shop on ground floor with flat above.
Flat was sold off on a lease to the freeholders wife (to raise funds) and i now have the opportunity to merge the two into the freehold on completion.
Would you do this or would you keep separate? I intend to keep for the foreseeable future or reading the posts I could sell off the flat and dispose myself of the onerous AST issues?
Would welcome some input from those who have experience of this.
I may be wrong, but I understand that both the freehold and a leasehold can not be held in same name. You can get around this by holding freehold in a company then lease hold in personal name or another company. Or hold one in joint personal names.
As for merging or keeping separate, instinctively I'd say keep separate as it gives you more options, selling off or raising finance against it.
But, depending on the lease both of these may be a non-starter e.g. too few years remaining or not sufficient lease detail to satisfy bank for lending or a buyers solicitor . This would mean legal expenses to extend lease or redraft it.
There would be a cost to merge and a cost to keep separate included in conveyancing anyway.
Interested to know what you decide.
All opinion and advice given should not be relied upon and the usual due diligence should be undertaken in all cases.
Brilliant thread by the way.
Some great insight into mixed use investment.
But let's hope this remains a niche strategy