Thinking of converting commercial property to residential?
While renting out a property this way has its clear advantages, there’s a lot to consider. Ensure you’ve thought every detail through before you decide to go ahead.
Unsure where to start? Here’s a handy guide for landlords considering this path.
What to Consider When Changing Commercial Property to Residential
First things first, you need to decide whether this conversion is feasible for you at this time.
The Type of Property
There are many kinds of commercial building, from office to retail. Some of these may be easier to convert than others – so it’s vital you look into the specific details.
Class J allows developers a lot more freedom, however there are still some exemptions and restraints. Ensure you’re aware of these from the start.
Building Conversion Costs
While you’re not starting from scratch, it’s important to note that the cost of converting the existing building could be considerable.
Particularly if the building requires significant structural work, it might be more costly than expected.
Are you prepared for this?
Planning Permission Commercial to Residential
While it’s not always the case, you may require planning permission before going ahead with any work. Even if the building falls within Class J guidelines, you may still need permission.
Particularly if you plan on knocking down walls, for example, you may need to prepare for this extra expense.
Local Planning Laws
You may need to speak to the local planning authority, or local council, before going ahead with any work.
Bear in mind that the location of commercial properties might not be ideal for residents.
- Transport links
- Local amenities
- Nearby schools
- Noise pollution
- Access for developers
Ask yourself, ‘Can you live in your commercial building?’ If the answer is no, it’s unlikely it will appeal to tenants either.
More and more people are choosing to rent over buy, but location can make or break this. Particularly if you’re trying to encourage a long-term tenancy, the area is everything. Tenants will only want to lay their roots in your property if they like their surroundings also.
Unless you have enough cash upfront, it’s likely you’ll need a mortgage to purchase the property.
This may mean the conversion is subject to your broker’s terms and conditions.
While all landlords should consider insurance, when it comes to conversion, there’s an extra need to safeguard the building.
During the work planned to go ahead, are you covered? Consider the terms of your mortgage agreement – you may be required to get insurance.
Making a Commercial Conversion Liveable
There are a number of requirements that need to be met before tenants could live in the property. A commercial to residential conversion should consider the following:
- Electrical safety
- Removal of hazardous material
- Fire safety
Ensure all these needs are met before you consider letting tenants move in.
Commercial Property Change of Use to Residential – Other Considerations
Of course, there’s more to a conversion than simply making the property safe.
Residential units have things that commercial spaces may not, such as storage areas. Also, how secure is the rental?
It’s a good idea to imagine yourself living in the commercial property. Does it feel like a home?
The Pros of Changing Commercial Property to Residential
There are some undeniable perks with converting commercial buildings, including:
- You could potentially get a bigger property for a lower price
- You may not need planning permission
- There’s no property chain
- Investing in property can be hugely profitable
The Cons of Using Commercial Property As Residential
While there are some positives, there are also some inevitable downsides:
- Sometimes the conversion can be more costly than expected, particularly if planning permission is required
- You’ll need a specialist buildings survey, which can be expensive
- It’s easy for conversion costs to spiral out of control
- Conversions can run on for longer than anticipated
Meeting Your Requirements as a Landlord
Decided this is direction you want to take as a landlord? This journey is both an exciting and difficult one.
As with any property, there are a number of requirements you’ll need to meet as a landlord. But, you’ll also want to ensure your investment is protected every step of the way.
From check-in to check-out, No Letting Go will ensure you’re meeting all the necessary safety standards. As well as this, we’ll ensure your tenants are looking after the property as requested. Our comprehensive property inventory services offer you peace of mind, while making you the best landlord you can be!
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