Buying a let warehouse directly is very different from buying a house. This is the usual process for an investment purchase in England and Wales.
1. Set your criteria
Decide on budget, location, size, tenant type and the lease length you need. Single-let buildings depend on one tenant; multi-let estates spread the risk across many.
2. Find stock
Investment warehouses are sold through commercial agents, auctions and off-market introductions. Many of the best buildings are sold privately.
3. Arrange finance
Commercial mortgages typically need a larger deposit than residential loans and are assessed on the rent, the tenant and the lease length.
4. Agree heads of terms
Price, conditions and timetable are set out in heads of terms before solicitors are instructed.
5. Due diligence
- Title and legal searches
- The lease: rent, review dates, break clauses, repairing terms. See commercial lease terms explained.
- Tenant financial strength. See tenant covenant strength.
- Building survey, roof, floor loading, cladding and asbestos
- EPC rating against minimum energy standards
- Environmental and flood reports
- Independent RICS valuation
6. Tax
Check whether VAT applies (see VAT on commercial property) and budget for stamp duty on commercial property.
7. Exchange and complete
Contracts are exchanged with a deposit, then the purchase completes and the rent is apportioned between buyer and seller.
The fractional alternative
If buying a whole warehouse is out of reach, fractional ownership lets you own shares in one. See fractional commercial property investment.
This guide is general information, not financial, tax or legal advice. If you are unsure whether an investment is right for you, speak to a regulated financial adviser.