Commercial Valuation and Yield
Why commercial is priced on income, and what covenant strength means
Commercial property is priced on its income, and this book teaches the skill that decides whether you buy well or overpay. It explains that value equals rent divided by yield, the inverse relationship you must understand, the different kinds of yield, passing and market rent, and why covenant strength can make two identical buildings sell for different prices. You will learn where to find free data, including rateable values from the Valuation Office Agency, sold prices and auction results. The income chapter covers secure and insecure rent, incentives hidden in headline rents, reversion, rent reviews and honest assessment of the tenant. The cost chapter includes purchase costs, VAT and the option to tax, business rates and the empty rates trap. The deal is stress-tested for voids, tenant default, rate rises and yield softening, and a complete worked example reaches a verdict on one building. Next in this series: “FRI Leases, Rent Reviews and Empty Rates”.
What’s inside
- The only numbers that actually matter
- Where to find reliable local data for free
- Working out true income, not optimistic income
- The full cost stack nobody mentions
- Stress-testing for the bad month, the void, the rate rise
- A complete worked example, start to finish
- Your deal calculator, and the legal questions it cannot answer
Educational material only, not financial, legal or tax advice. Results are not typical and are not a guarantee of income. Freedom Property Academy LTD, registered in England and Wales.