Conversations With A Landlord: The Path To Commercial Property

By 10 min read • September 21, 2023
A commercial landlord stood outside an office block.

Property investment can sometimes be a bit of a lonely pursuit. We landlords can often be solitary creatures and despite all of the third-party advisors and property influencers out there, it can be difficult to find honest and experienced landlords who can speak openly about their own experiences. Such conversations can be imperative, as they can help you to avoid the common mistakes of the industry and to learn from the success of others. This is why Landlord Vision has put together a series of interviews with landlords who have walked the walk and can shed light on their own experiences.

This blog’s conversation is with Martin (an alias to protect his privacy). Alongside forging a successful company over the years, Martin has spent over a decade building out an enviable portfolio of commercial properties, ranging from small ice cream shops to larger commercial units. Aside from being humble about his own success, what makes Martin’s experience especially interesting has been his ability to sniff out great opportunities and back himself to repeat winning formulas. His journey from an accidental residential landlord to a portfolio landlord is full of entrepreneurial but also classical investment lessons. Be it focusing on quality above quantity or making his use of cash purchases advantageous, there is a lot to learn for readers of all levels of experience.

Landlord Vision: How Did You First Become a Landlord?

Martin: Becoming a landlord was never something I really planned to do. In some ways, I am very much an accidental landlord. Back in 1999 I was looking to move into a larger house, at a time when house prices were rocketing. I had found a property I liked with an additional bedroom but had to increase my offer twice as prices continued to rise. Originally, I planned to sell my first house and use the money to fund the deposit and an extension. But as prices rose, I thought why not keep my first house as well and see how far prices rise.

We were in a chain at the time and the buyer was messing about. My mortgage offer was going to expire so I decided to keep my old home and ended up becoming a landlord. From there, I purchased another residential property which I also let out. So, I ended up with two residential buy-to-lets in the early 2000’s, but it was as a result of taking opportunities when they come rather than planning to become a landlord.

Landlord Vision: How Was Your Experience as A Residential Landlord?

Martin: I was very naïve when I first become a landlord. Even though I thought I had done the right things, I got bitten by a tenant that knew the system inside and out. They were the quintessential nightmare tenant and were able to stay in the property effectively rent free for 12 months. They trashed the house. In the meantime, it cost me thousands of pounds in lost rent and legal fees. Every time we booked in a court date, the tenant would find an excuse why they could not go to court. They knew their way around the system and were even able to cite old English laws preventing evictions during the Christmas period.

At the time – 2004 – I had two buy-to-lets. But that was it for me. As soon as I was able to finally evict the tenant, I sold one of the properties. The other I let to a friend at a very cheap rate, on the condition that I never wanted to hear anything about the property. That property has been let since, but that was it for me with being an out-and-out residential landlord.

Landlord Vision: So How Did You Become a Commercial Landlord?

Martin: Again, it was never something that I necessarily planned. Through my network I had heard about commercial fix and repair leases, which sounded far more attractive than their residential counterparts. With a residential property, if something breaks down, you as a landlord have to go out and fix it. With commercial leases, in most cases it is the tenant that is responsible. But that being said, I never sat down and formulated a plan to become a commercial landlord.

Around a decade ago, we purchased a new office for the business. At the time, the new office was derelict and needed a significant amount of work carrying out on it. Through my experience with the company, I know that if you don’t do something in your building before you move in, you’re never going to do it. So, we did everything. We installed new door entry systems, air conditioning, new double glazing, remote interfaces to BMS and full alarm systems. The challenge was that all the additions added months onto the moving process.

Whilst all of this was going on, a mutual friend called me. He had heard that I was moving and wanted to know what was happening with my old office. He didn’t realise that we owned it and asked to speak to the landlord to see if he could rent it himself. I quite liked the idea, despite all the work on the new office making things tight money wise. When I worked it out and looked at our cashflow, the numbers just made sense. So, I decided to cross my fingers and let out our old offices. Although I had owned the building for years, it was my first foray into being a commercial landlord.

Never Miss Another Post from George

Get the free fortnightly newsletter and get a digest of our best posts every fortnight
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

Landlord Vision: You Have Since Gone on to Purchase More Properties. What Would You Say Your Strategy Is?

Martin: I would not say I have an out and out strategy. Rather I am good as spotting opportunities and running with them. I will always look at a range of different properties, but over the years I have managed to narrow down opportunities I like and figure out what works for me. For example, I tend to only ever look at properties that are within 5 miles of where I am based, in case I need to get there quickly if something urgent arises.

With my experience running a business, I assess the properties from more of a qualitative standpoint. I ask myself whether I myself would want to rent the property if I was a business. For example, if you are a small retail shop, you want a property which is on a busy road where you can park right outside. You want somewhere that complements the products you sell and where you will get customers walking down to pick things up on their way too or from work. Fundamentally, if you have not got your business in the right area, it’s not going to work. It is all about location. Which has led me to own everything from pubs, through to garages, small retail units, larger distribution units, garages and ice cream shops.

Admittedly, there are some things which I avoid. I try to steer clear of large industrial estates. The units all tend to be very similar and if a business doesn’t rent yours, they can rent the next one down which can lead to a lot of competition on rents. I also saw what Covid was going to do to office space and have avoided that. On the other hand, I like retail units. Although the high street appears to be dead and buried, there will always be returns to be made in small retail units. So, when I do look at shops, it is little ones around prominent areas in smaller villages or towns. There is always going to be a need for small corner shops, local hairdressers, vape shops and little boutiques. Those businesses all want something easy and cheap and there will always be another similar company looking to move in.

Landlord Vision: What Are the Advantages and Disadvantages Of Commercial Property?

Martin: Aside from generating great yields, commercial property tends to be more of a hands-off investment – at least in the long term. Commercial leases can typically last seven years, with tenants taking on the responsibility of maintaining the property and returning it to you in the state that they found it. Many leases also have provisions for the tenants, which stipulate that they must pay the building insurance or other associated costs as part of the agreement.

The other benefit to commercial property is that it is not bound by the same legislation as residential buy-to-lets. As a landlord, you don’t have to pay for annual gas certificates or other similar checks. The only thing you really have to pay for is the EPC for the property. The lighter touch legislation also helps when it comes to tenants not paying rent. My leases allow me to be paid quarterly upfront, with three months deposit as well. Not that it has happened yet, but where tenants don’t pay their rent, it is far easier to evict them and claim any stock left in the property as owed debt. With residential properties, judges are always conscious that they are making someone homeless and potentially putting them out on the street. They don’t have that same hang-up with commercial tenants, so I think they can afford to be more black and white.

That being said, commercial property does come with its disadvantages, namely longer vacancy periods between tenancies. You operate with a smaller pool of prospective tenants, so finding the right occupant can be more time consuming – leading to longer void periods. For some investors, especially highly leveraged ones, that can be a key downfall. You also have to factor in that lending criteria can be tougher with commercial properties, banks typically want to lend less and you may have to front up more cash in deals.

I have always believed in giving somebody the best unit I possibly can. It has to be right for both me and my tenants. The property may only be a bare shell of an industrial unit, but in my mind it should be a clean, watertight, bare shell. This belief has worked well for me, but it can be a disadvantage of commercial property. To invest in the right properties, you often need to invest time, effort and substantial additional capital into bringing the buildings up to an attractive standard.

Landlord Vision: Do You Mortgage Your Properties?

Martin: Everything I buy is paid for entirely with cash, for the primary reason that it means I don’t feel forced into negotiating with prospective tenants. As I mentioned before, one of the biggest downsides to investing in commercial property can be the extended void periods between tenancies. If you have mortgage repayments, you can often feel pressured into accepting tenants that aren’t right for the property, or compromising on your lease agreements for the sake of expediency. In the long run, such decisions can be costly.

As the saying goes, cash is king. Cash also means that where opportunities arise, I can afford to move fast and make more aggressive offers on properties, as I am playing with my own money. This has helped me with some of my previous investments.

Landlord Vision: What Do You Think of AirBnBs?

Martin: I have a couple of holiday lets, which I have bought recently. Much like my other investments, I saw an interesting property and thought that it would make for a phenomenal holiday-let. The property stood out as it is right on the waterfront and is the only property in the area with a private slipway for its own boat. Its unique within the location and has a niche characteristic which will draw people in. Much like with my commercial properties, I asked myself, if I was an AirBnB host, what would I want my property to look like? It is simple, you want to purchase something which stands out and which will attract a specific but constant subsection of holiday goers.

Landlord Vision: Do You Raise Your Rents in Line with Inflation?

Martin: I have never been the sort of landlord that goes in and ramps up the rent all of the time. You have clauses in your leases which allow you to increase the rent, but I prefer to sit down with my tenants and ask them what they can actually afford to pay. Although sometimes you have to be robust and make a judgement as to whether they are being honest with you or not. But generally, it is an approach which has served me well.

Thankfully, many of my tenants were able to survive Covid relatively unscathed. But if they did come to me and honestly admit that they were struggling to pay rent, I would have said ‘no problem, we can work something out’. It is another one of the advantages of not having a mortgage, I am in a position to be able to sit down with a tenant and find a plan that works. If they cannot pay, we can look to come to an agreement where they pay back any deficit over a period of 12 months, or something along those lines.

I find that, in the long term, providing good properties at fair prices to your tenants benefits you as a landlord as much as it does them as a tenant. I have had tenants who have rented smaller units with me and, as their business has grown, have come back to me and rented out my larger units because they know they’re of a good quality.

Free Fortnightly Newsletter for Landlords

Get our free newsletter and get a digest of our latest posts as well as exclusive legal and tax tips.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

Landlord Vision: What Lessons Have You Learned as A Commercial Landlord?


Unlike with residential buy-to-lets, I am yet to learn any lessons with commercial property the hard way – thankfully. But one of the standout lessons I have learned, is the importance of a good lease. When I first started out, I downloaded a template lease online and didn’t really get it checked over. In hindsight, I was fortunate that my first tenant was a good one. I would also recommend getting a good solicitor, one who can actually advise you and add value to your leases. There are some really great protections within commercial leases, so long as you have the right advice and everything is done above board.

For example, I ask tenants to opt out of the Landlords and Tenants Act 1954, as it includes the right to auto-renew after the lease has expired. The solicitor and I sit down with the tenant before they sign and present the lease, including the opt-out so that everybody knows exactly what they are signing up for. As the leases can be as much as seven years, it is great to have the option to part ways with a bad tenant at that point rather than running the risk of the lease auto-renewing. For good tenants, it makes no real difference as I would love them to stay at the end of their agreement anyway.

That being said, it feels like I am making everything sound quite rosy, but it hasn’t always been. Sometimes I have bitten off more than I can chew. I remember one property, which used to be a restaurant and I wanted to convert into a pub. I like to be hands on with the projects I do, I like to make sure that they are done right. But that one nearly broke me. I was there 24/7 whilst trying to run my business and manage everything else. I kept having to tell myself it would be over soon and it would be worth it. But it goes to show that you have to work hard to find and make the right commercial properties.

Landlord Vision: How Do You Source Your Properties?

Martin: It’s a case of little and often. Sometimes on a Sunday I just sit down and hit Google. I will search for commercial properties nearby and I will keep searching and searching. I bought one recently and it was one I spotted online, with an auction house I had never heard of. I saw the price and thought it would probably go for 50% more than it was listed for, but I registered nonetheless and put a bid in. I ended up winning it. There was no sign outside the building, I had never heard of the auction house, but they had all the legal packs completed. When I won the property, I paid the deposit on my credit card because I still expected it to be a scam. Right up to completion, I was sure it was too good to be true.

For every ten properties that I see which I think are interesting and put in an inquiry for, I only probably go out and view two or three. Maybe one of them works, but I just keep looking every couple of months to see what has come up and what has changed. When I do seriously consider buying a property, I do it properly. I send professionals out and I make sure I am happy with the property. It isn’t so much about the numbers, I do aim to get about a 10% yield, but it is also about the property and whether I feel like it offers an opportunity that I can work with.

Landlord Vision: Finally, Do You Intend to Continue Buying Properties?

Martin: I keep promising people I am not going to buy anymore, but I love it. It is like a bit of an addiction; I just can’t help myself. I guess I should slow down at some point, but I can’t see it anytime soon.

Was this post useful?
Thanks so much for your feedback!
Got it!
Thanks for your feedback.
Share with friends:
Popular articles

Get the best of Landlord Insider
delivered to your inbox fortnightly

Sign up and we’ll send you our latest posts, tax tips, legal tips, software tips and compliance deadlines, everything you need to know every two weeks. Unsubscribe any time.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.