What You Need To Know: Residential Vs Commercial Property

Categories: Property TipsPublished On: October 8th, 2021Comments Off on What You Need To Know: Residential Vs Commercial Property

The property landscape is constantly changing, and this presents different challenges for business owners, landlords, tenants, renters and buyers. Keeping on top of them is a job in itself, so relying on experts, like our team at Williams Sillitoe, can save you time and focus you on commercial properties that suit your needs.

Depending on your business, however, there may be options beyond the existing commercial properties available. Changes in rules and legislation mean that, with some work, residential and commercial properties can have their uses changed.

We’re going to look at this in a bit more detail so you know where you stand.

Understanding The Differences Between Commercial And Residential Property

A commercial property ready for conversion

There are plenty of differences between commercial and residential property you need to be aware of, but the most important is what each can be used for. There are regulations stipulating the uses for different properties and this can have an effect on where the location is, how it’s constructed, it’s layout, the price, and many more factors.

Residential properties, for example, produce less profit when rented out and generally have shorter contracts while commercial properties are more profitable and contracts are signed for longer to minimise the impact on the business using the property.

Uses For Commercial Property

So, what can commercial property be used for? They are designed for business purposes, which could be offices, retail, entertainment and many more uses. As such, they use different layouts than you’d find in a house or residential property.

These buildings aren’t designed to be lived in, so certain facilities are different to accommodate different amounts of people, too, whether that’s staff or members of the public. Storage space also needs to be considered for certain businesses.

Contracts are likely to be longer terms, too. This minimises disruption to the business by giving them consistency and reducing the number of times they need to move to a new premises.

What Can You Do With Residential Properties?

Residential properties are designed to be lived in. Sizes are more uniform, although there are always differences depending on building, location and style of property. They can be houses or flats in a building, but all are considered residential. The facilities provided are different from commercial and they are not to be used to operate business from – as in as their public address.

Contract lengths tend to be shorter for residential rentals, and the profit margin is smaller for landlords. While there is a risk of tenants damaging the property or wear and tear taking its toll, people who feel comfortable will take care and look to extend their stay, gaining stability and providing consistent income for the property owner.

About Mixed-Use Properties

Some properties are considered mixed-use. This means that, in the building, there will be properties used for residential and commercial purposes. Taking over a space in this building still means you have to follow the rules that particular space has been allocated, rather than switching them as you see fit.

Can you change the use of a property?

When you find the right property, you might think that it’s worth taking regardless of its type or usage rules, but this could cause you more trouble than you think.

That said, changes to legislation over the years have made it easier to officially change the use of a particular property, from residential to commercial and vice versa. This is because keeping properties filled and in use is a priority for most local authorities, even if it’s used in a different way than originally intended.

There will be work involved. Safety standards a priority and steps will need to be completed to make sure the property is fit for the purpose you want to use it for, but the opportunities are there, and if you have a vision, it’s possible to bring it to life.

Can Commercial Property Be Used As Residential?

Building work on a commercial property

You can change a commercial property to residential use, but there are things to know before making a decision.

You will have to check with, and sometimes apply to, your local authority to make sure you are able to carry out the work on the property you have in mind. Some exceptions may prevent you from undertaking the work you need to do, such as being a listed building or being located in a national park or conservation, for example.

Each commercial property is given a class depending on what it has been used for in the past. You’ll need to apply to change the correct class to the new usage, or the application will fail.

Certain types of commercial property also don’t need planning permission to make the changes you want. Some of these properties include shops, warehouses, showrooms, banks and more.

Despite not needing planning permission, you will still need approval from the local authority.

Once all these steps have been completed, you’re ready to begin work and transform the commercial property into your vision, and a profitable venture.

How To Change A Residential Property To Commercial

Conversion work on a property

To change a property from residential to commercial follows some of the same steps for the commercial to residential process, but there are few more complications to factor in.

For one, you’re changing more than just the property but the area around it. Your business will attract more people to the property, impacting footfall and traffic. For a suburban area, this is a big consideration, and having the neighbours onboard is a big part of this. If you are close to a main road or area with commercial properties and businesses, this will be easier to do.

Class changes are a big factor, too, so it’s important to be clear about the kind of business that can use the converted property. This will impact how neighbours respond to your plans, the changes you need to make and what will happen to the property to make it suitable.

Once everything is approved, you can begin on the work itself.

Searching For Your Perfect Commercial Property?

The search for the perfect location for your business can take a while, but there are a lot of commercial properties to choose from. Depending on the location and size you need, looking at converting a residential property for commercial use is another option to think about.

To find out more about what options are available to you, get in touch with the team and we’ll do our best to answer your questions and help you find the right location for your business.