Tax changes are leading some property investors to investigate if commercial property is a better investment than buy to let.

Flats and maisonettes over shops – known as ‘semi-commercial’ property – are proving especially attractive as the new stamp duty and mortgage interest relief tax changes do not apply to them.

Although it’s true that pound for pound, any commercial investor pays less tax than a buy to let landlord, costs of entering the market and finding the right deal are harder.

Many commercial deals cost millions rather than the more modest price of a home.

For a few hundred thousand pounds, an investor is looking at a suburban shopping parade or a unit on a small business estate.

Like any property transaction, the buyer ends up with what they pay for.

Always have a structural survey and look over the building carefully as commercial property can be a huge money pit. This is vital if buying a property at auction.

Reliable tenants for these units are hard to find as they are target properties for start-ups or home businesses stepping up because they need more space.

This makes mortgage finance tougher to find. Expect to put a deposit of at least 40% into the pot and a mortgage rate of between 2% and 5% higher than a residential deal.

Costs of arranging the finance are more likely fee-based, swallowing another slice of the investment.

Commercial landlord typically set up a company to own investments.

On the plus side, commercial tenants will have a repairing lease that makes them responsible for funding repairs and maintenance to the building. They will also pay for insurance.

Screen tenants carefully. Check out their trading history and ask to see accounts.

Consider their market sector – will they inflict damage on the building, is change of use permission needed and is there a need for their services in the area?

If you decide to sell, the company will pay corporation tax on any chargeable gain.

All these factors can increase your risk as a landlord and make an inviting investment a nightmare to manage.