ToolsnTrack
Posted a lot
Homebrew Raconteur
Posts: 4,117
Club RR Member Number: 134
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Dec 23, 2019 16:52:33 GMT
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As in, not just built a garage at your house.
I'm toying with the idea, having let industrial units for nearing 5 years now, of just biting the bullet and buying one. This train of thought has led me to some stations though:
- Where do you even look for such a thing?
- Is it as easy as house buying?
- Is it worth it?
So, has anyone actually done such a thing?
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Dec 23, 2019 16:59:51 GMT
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Dez
Club Retro Rides Member
And I won't sit down. And I won't shut up. And most of all I will not grow up.
Posts: 11,712
Club RR Member Number: 34
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Dec 23, 2019 18:31:37 GMT
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I looked into it a couple years ago. Total minefield, so much so I elected to forget about it and keep renting. I had the money and had found a property I wanted, but I just wouldn’t have been able to use it as intended.
Not that much stuff comes up for sale to start with. Mostly because the returns on rent are way higher than domestic properly so most industrial units are sold before they’re even built, if they even make it to market. A huge amount are still owned by the original landowner before they got built/converted. They only exist as an income so won’t be for sale. A lot of the ones that are for sale are landlocked by residential and will have restrictions, or have had change of use and planning granted to become residential and will sell for a lot more than a commercial property.
Other thing is a huge amount have deed clauses or bylaws preventing their use outside ‘normal working hours’. Some are more specific than others, but if there’s housing within earshot don’t expect to be able to do anything there that makes any noise or traffic after 6pm on a weekday, or on a Sunday. Some places even state Saturday afternoons too.
The other thing to consider is the council. To put it short, they’re dicks. Assuming you want it for personal use which it sounds like you do, If they’re getting an income off a rated property as someone is running a business there but you then want to use it for private use so they don’t get rates, the lengths they will go to to prove you are making money off it so they can still charge you are ridiculous.
A mate of mine got a property He owned de-rated after a previous tenant left, and they spent the best part of 3 years trying to prove he was using it commercially. They did a huge investigation on him, involving everyone from hmrc to dvla via the environment agency. Checking what he was doing with all waste, if he was transporting it anywhere else to be disposed of so they could fine him for waste transfer, to see if it was hazardous and fine him for notndisposing of it correctly, making sure he wasn’t actually making any money off it, and checking how many cars he was buying and selling. It got to the point where if he bought a car he had to keep it for at least 3 years or scrap it or they’d try to charge him capital gains tax on it. And he was only using it for storage (mostly of his own car collection) with the odd bit of tinkering/maintenance to return stored cars to the road. The whole thing got quite farcical really. Obviously if you’re gunna be doing it commercially, you can ignore that but, but still expect the environment agency/council to poke their nose in if you get even one complaint against you. They’re now obliged to investigate EVERY complaint they get, even if it’s from the typical old busybody serial complainant who they know is an idiot.
I’m not saying it can’t be done, but it’s way, way harder than you’d expect, and you’d have to be extraordinarily lucky to find just the right property, or be waiting a long time for it to pop up. and that’s why most people in commercial property still rent.
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Last Edit: Dec 23, 2019 18:41:09 GMT by Dez
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Dec 23, 2019 19:53:37 GMT
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I’ve just read what has already been written, but that seems to be the extreme end to me. I haven’t done it personally but I know a few lads who have them with zero issue. When you think about from the other angle, what’s the problem? I rent a unit for my business, no one has ever been or rang me from ‘any’ Government body of any kind to ask me what I do or how I do it, so why would they bother you if you own it? Can’t see it me sen’ Nothing stopping you buying the unit as ‘Joe Bloggs’ property services, then renting it to yourself.
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Dec 23, 2019 19:54:26 GMT
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In my neck of the woods ( Northumberland ), you probably would have to buy a unit if you want to put any motor vehicle in it. I recently looked into it and was getting on OK till cars were mentioned, then flat refusal. Even if you are a baker or ice cream man etc you can not put your vehicle into the unit to service it. Reason for refusal is vehicles parked outside and makes the unit dirty. On the plus side, you don't pay rates as a small business. Some farmers are starting to let units and are a bit more relaxed about it. Cant think I have ever seen one for sale though.
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Dec 23, 2019 20:24:29 GMT
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I have looked very deeply into this - I have a business to run which currently operates from a home premises - has already stated units do occasionally come to the market but they are few & far between - you are more likely to find what you need in the areas of the country that supports / did support heavy industry / manufacturing / textile mills etc rather than the high tech areas of the country - there are a good number of commercial property agents that are just an internet search away - occasionally you may well find units coming available via a property auction too - I have hardly come across any restrictions of use on units for sale but they are wide & varied on units to let (one of the largest restrictions being no motor trade / vehicle storage) - I outgrew my home workshop even before I moved into it but I'm still making full use of it - but a move is possibly on the cards over the next few years - having considered many options the route that carries more appeal than any other to me is to sell up and then purchase a small holding / equestrian property that has nice residential property alongside a suitable farm building / barn that I can put to use has my workshop / unit - finally you asked if its worth it well its an investment providing you don't pay more than what the unit is worth it has to be better than paying a lease to someone else - when you stop using it / retire etc you have the choice of letting the unit for income or selling it on and having your money back out of it along with any increase in value that the unit has made
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Last Edit: Dec 23, 2019 20:30:29 GMT by Deleted
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ToolsnTrack
Posted a lot
Homebrew Raconteur
Posts: 4,117
Club RR Member Number: 134
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Some interesting food for thought.
I think my biggest restriction has to be as Dez mentioned, bloody finding one. I've been searching the Glasgow region and clearly the shift in industry here has completely scuppered the old industrial stuff. There just isn't any suitable units available.
I suppose this all stems from my utter frustration at making this a financially viable option when renting, or rather, renting solo. When there is 2 or 3 of you splitting rent for a larger unit it works, but once you go to a smaller workshop the rent doesn't even come close to halfing, indeed sometimes it barely drops at all.
Maybe I just need more friends! You really do feel the isolation in Scotland though, any form of community for tinkering and such just doesn't seem to happen up here, god knows I have tried over the years...
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Dec 24, 2019 15:48:39 GMT
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This is something I've been looking into recently. A lot depends on which council area you are in, some are relaxed about change-of-use from business to residential (personal storage) - others aren't. Personally I'd rule out any leasehold property, buy freehold and there's no possibility of crazy rent increases in future. What services do you need / what are connected (electric, water, toilets, etc) ? Check what's allowed carefully ( noise / storing & working on vehicles, etc), any nearby neighbours who might complain ? "Guide price" means it's being sold at auction, expect the final price to be a lot higher than the listed guide price, don't forget to add *LOTS* of fees / comission / charges etc - buying this way brings lots of charges that might catch you by surprise. What is involved? it's the same process as buying a house - solicitors, title deeds, searches, etc. I hoped it would be quick as it's less complicated but the process (and slow progress) is just the same. Allow £1k for solicitors fees etc on top of the purchase price. Where to look? Keep checking to see what garages are advertised : www.gumtree.com/garage-parking-for-sale/uk/garage property.mitula.co.uk/searchRE/sort-0/op-1/max_price-30000/q-garages-lock-up www.onthemarket.com/for-sale/garages/england/ www.newsnow.co.uk/classifieds/houses-flats-for-sale/freehold-garages-sale.html?ad__price_to=30000&usp=true www.ukauctionlist.com/category/tags/garageExamples on my radar : @fishguard, double garage 16ft x 15ft, £20k www.onthemarket.com/details/6478031/ @sandwich freehold non-commercial garage, 50% share of 160sq mtrs, £40k www.gumtree.com/p/garage-parking-for-sale/garage-workshop-50-freehold-interest-non-commercial-.-approx-160-sq-mtrs-/1356895871 @peebles High St land / parking for 10+ cars 95ft x 33ft - (see yellow - has option to build a garage matching garage already on neighbours land?). Rent out spare parking spaces to local workers £13k www.propertypigeon.co.uk/property-search/peebles/eh45-1647592157 If anyone buys these, commission to the usual place (or the offer of free parking / storage) would be appreciated
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Last Edit: Dec 25, 2019 22:22:19 GMT by nomad
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Dec 24, 2019 17:00:01 GMT
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ToolsnTrack
Posted a lot
Homebrew Raconteur
Posts: 4,117
Club RR Member Number: 134
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Dec 25, 2019 19:56:14 GMT
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Cheers guys, some useful sites to keep an eye on. The search begins!!
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93fxdl
Posted a lot
Enter your message here...
Posts: 2,000
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Dec 26, 2019 16:21:55 GMT
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Some left field info that may help towards successful unit life. If you are a paye taxpayer, you can run the unit as a sole trader business, then all the costs are tax deductible from your paye tax payments. Or you can run the unit as a charity, such as menssheds.org.ukYou can benefit from assorted tax reliefs, also can open lots of doors with officialdom. Before anyone starts slagging me for these suggestions, just consider the massive companies that seem to loose millions year after year but keep operating, and the charity shops filling the high streets across the county, not forgetting IKEA Ttfn Glenn
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Last Edit: Dec 26, 2019 16:25:26 GMT by 93fxdl
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Sammo
Club Retro Rides Member
Posts: 1,461
Club RR Member Number: 103
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Has anyone ever bought a unit?Sammo
@sammo
Club Retro Rides Member 103
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Dec 26, 2019 19:32:37 GMT
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I’m amazed how cheap those units are to buy! You can’t even buy a single car garage (no electricity or water) for £40k around here!
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Follow Me On Instagram - @parttimecartinkerer
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Dec 26, 2019 20:08:16 GMT
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I’m amazed how cheap those units are to buy! You can’t even buy a single car garage (no electricity or water) for £40k around here! Where’s ‘around here’?
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Sammo
Club Retro Rides Member
Posts: 1,461
Club RR Member Number: 103
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Has anyone ever bought a unit?Sammo
@sammo
Club Retro Rides Member 103
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Dec 26, 2019 20:11:58 GMT
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I’m amazed how cheap those units are to buy! You can’t even buy a single car garage (no electricity or water) for £40k around here! Where’s ‘around here’? I’m in Epsom, Surrey. The land of overpriced everything haha!
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Follow Me On Instagram - @parttimecartinkerer
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Dec 26, 2019 20:14:09 GMT
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I’m in Epsom, Surrey. The land of overpriced everything haha! Move then 😉
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Sammo
Club Retro Rides Member
Posts: 1,461
Club RR Member Number: 103
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Has anyone ever bought a unit?Sammo
@sammo
Club Retro Rides Member 103
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Dec 26, 2019 20:18:57 GMT
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I’m in Epsom, Surrey. The land of overpriced everything haha! Move then 😉 No chance. My Daughter lives here so I won’t be going anywhere.
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Follow Me On Instagram - @parttimecartinkerer
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moglite
Part of things
Posts: 815
Club RR Member Number: 144
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Has anyone ever bought a unit?moglite
@moglite
Club Retro Rides Member 144
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Dec 26, 2019 21:53:15 GMT
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Can add much value - but a very interesting thread - good luck.
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1967 Morris Oxford Traveller 1979 Toyota LandCruiser BJ40 1993 Daimler Double Six 2007 Volvo XC70 2.4D
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Dec 26, 2019 23:03:18 GMT
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Great advice above. To search, check out proplist, zoopla, rightmove and primelocation as well as gumtree which occasionally has some available.
I'm looking at the moment (to let) and the irony is Bradford has one of the highelest number of vacant commercial properties in the UK.
Happy hunting
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madmog
Club Retro Rides Member
Posts: 1,155
Club RR Member Number: 46
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it, so why would they bother you if you own it? Can’t see it me sen’ Nothing stopping you buying the unit as ‘Joe Bloggs’ property services, then renting it to yourself. TLDR at end If Joe Bloggs property Services rents to Joe Bloggs then Joe Bloggs Property Services has to pay tax on that rent. Also, if the rental amount looked implausable (too small or large) HMRC would have a good look to see what was going on. So that's not the way to go though I like your thinking. A quick primer on business rates. Rateable value is the estimated rent that a unit would attract as of 2015. Each council will use a multiplier to calculate the rates actually payable. Around my way the multiplier is about 0.5. So if the Rateable value of a unit was £6,000 then the rates charged per year would be £3,000. If you rented a unit for commercial purposes you would be paying £6,000 to the Freeholder and £3,000 to the council. I think the only problem with rates for us would be if the unit had been previously large/expensive enough to attract them. Then the council might not want to permit change of use to something for which they wouldn't get the money. But anything with a rateable value of £12,000 or less attracts no rates if it's your only one (a bit more involved than that but approximately correct). If I found myself with a unit with a rateable value of more than £12,000 I would be inclined rent it out since £12,000 a year is always handy. Rates are calculated by sq.ft per floor. So if you were paying rates in a unit with a big high roof and you added a mezzanine you could double your rates or make your premises become due for rates. That's why places like B&Q, Screwfix & Argos often have single storey warehouses with very high racking and forklifts. Going a bit off track there. Be careful with the stuff on Rightmove as it is often the Lease for sale, not the Freehold. Ie you are buying the obligation to pay the rent for X years. Unlike renting a flat, if you buy a commercial Lease of something you cannot just give a month's notice. If there's say 8 years or 15 years remaining on the Lease, you are on the hook for that long unless you can sell the Lease to someone else. You're also on the hook for repairs. A Leasehold is very different to casually renting. Freeholds more typically come up in auction or with commercial agents. Freehold commercial property values depend almost entirely on the Lease and the Leaseholder, this is to our advantage. Take 3 identical units side by side. The first, a is Freehold of a unit with a 5 year Lease to KFC & will sell for perhaps double the identical unit next door with a 5 year Lease to Unknown Chicken Purveyors UCP. KFC is a big known company unlikely to default and with assets elsewhere to seize in lieu of rent. UPC is an unknown who could disappear in the night. To use the terminology, KFC is a good covenant and UPC is not such a good covenant. But third unit is identical but empty & is the least valuable as a business asset. Firstly there is no rent coming in and no Leaseholder to pay for the repairs so it's costing the Leaseholder money. Secondly the Freeholder could have to pay the rates as they have several properties so no business relief. A unit that's What's useful to us can be a real problem to the seller if empty. I can go on about buying at auction if anyone's interested. Okay I've rambled a bit so: TLDR: Understand the difference between renting, Leasehold ownership and Freehold ownership. Leasehold is probably the worst for us. If the would rent for less than £12,000 or you aren't running as a business rates shouldn't be due. But check. Investigate whether your (change of) intended usage will be a problem. Car tinkering and a bit of welding more likely to be acceptable if the unit is surrounded by heavier use car repair, paint and exhaust places. Less likely to be acceptable if other units are food related or next to housing.
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it, so why would they bother you if you own it? Can’t see it me sen’ Nothing stopping you buying the unit as ‘Joe Bloggs’ property services, then renting it to yourself. TLDR at end If Joe Bloggs property Services rents to Joe Bloggs then Joe Bloggs Property Services has to pay tax on that rent. Also, if the rental amount looked implausable (too small or large) HMRC would have a good look to see what was going on. So that's not the way to go though I like your thinking. A quick primer on business rates. Rateable value is the estimated rent that a unit would attract as of 2015. Each council will use a multiplier to calculate the rates actually payable. Around my way the multiplier is about 0.5. So if the Rateable value of a unit was £6,000 then the rates charged per year would be £3,000. If you rented a unit for commercial purposes you would be paying £6,000 to the Freeholder and £3,000 to the council. I think the only problem with rates for us would be if the unit had been previously large/expensive enough to attract them. Then the council might not want to permit change of use to something for which they wouldn't get the money. But anything with a rateable value of £12,000 or less attracts no rates if it's your only one (a bit more involved than that but approximately correct). If I found myself with a unit with a rateable value of more than £12,000 I would be inclined rent it out since £12,000 a year is always handy. Rates are calculated by sq.ft per floor. So if you were paying rates in a unit with a big high roof and you added a mezzanine you could double your rates or make your premises become due for rates. That's why places like B&Q, Screwfix & Argos often have single storey warehouses with very high racking and forklifts. Going a bit off track there. Be careful with the stuff on Rightmove as it is often the Lease for sale, not the Freehold. Ie you are buying the obligation to pay the rent for X years. Unlike renting a flat, if you buy a commercial Lease of something you cannot just give a month's notice. If there's say 8 years or 15 years remaining on the Lease, you are on the hook for that long unless you can sell the Lease to someone else. You're also on the hook for repairs. A Leasehold is very different to casually renting. Freeholds more typically come up in auction or with commercial agents. Freehold commercial property values depend almost entirely on the Lease and the Leaseholder, this is to our advantage. Take 3 identical units side by side. The first, a is Freehold of a unit with a 5 year Lease to KFC & will sell for perhaps double the identical unit next door with a 5 year Lease to Unknown Chicken Purveyors UCP. KFC is a big known company unlikely to default and with assets elsewhere to seize in lieu of rent. UPC is an unknown who could disappear in the night. To use the terminology, KFC is a good covenant and UPC is not such a good covenant. But third unit is identical but empty & is the least valuable as a business asset. Firstly there is no rent coming in and no Leaseholder to pay for the repairs so it's costing the Leaseholder money. Secondly the Freeholder could have to pay the rates as they have several properties so no business relief. A unit that's What's useful to us can be a real problem to the seller if empty. I can go on about buying at auction if anyone's interested. Okay I've rambled a bit so: TLDR: Understand the difference between renting, Leasehold ownership and Freehold ownership. Leasehold is probably the worst for us. If the would rent for less than £12,000 or you aren't running as a business rates shouldn't be due. But check. Investigate whether your (change of) intended usage will be a problem. Car tinkering and a bit of welding more likely to be acceptable if the unit is surrounded by heavier use car repair, paint and exhaust places. Less likely to be acceptable if other units are food related or next to housing. You’d only pay tax if you make profit, there are many ways not to. I have not paid a penny business rates on my unit since the 2008 financial crash. The Council stopped charging & have never put them back as yet
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