Commercial Property: Your Ultimate Beginners Guide

Investing in commercial property is different from investing in residential property. The sourcing and buying of commercial real estate can run on a much longer timeline.  However, that doesn’t mean it should intimidate you a great deal. When it comes down to it, once you find a good commercial property in Ireland, the process is quite similar to buying residential property. 

We will cover the ins and outs of commercial property investing in Ireland. As you learn more about investing in commercial real estate, you’ll understand how to choose a commercial property investment that is right for your financial strategy. 

If you are considering buying commercial property in Ireland, it might be helpful to review what you need to know about being a commercial property landlord. This includes familiarising yourself with the Irish property market, the laws and regulations governing owning land in Ireland and the best places in Ireland to purchase commercial property.


What are Commercial Properties?

Commercial real estate properties are different from residential in their use as well as build. They usually refer to retail, industrial, office, warehouses, mixed-use, and apartment buildings. Many investors prefer commercial real estate because it offers numerous advantages and potential benefits to growing their property portfolio over time. These advantages include: steady cash flow, readily available tenants, lower vacancy risks, and higher income potential.

There are 5 primary types of commercial real estate that you can invest in:


This can be anything from a single duplex with two units, to hundreds of units spread out across a garden-style apartment complex.


Office buildings can be a small commercially zoned home housing an attorney’s office or a skyscraper downtown.


Retail real estate can be a single shop around the corner from your house or a massive mall or a shopping centre.


Industrial real estate is made up of warehouses and distribution centres of all sizes – think ASOS delivery.


Hospitality real estate are the hotels, hostels and motels that serve business and leisure travellers. Short-term rentals are often included as well.

Investing in commercial property begins with determining which commercial property type is right for you. Afterwards, you can decide upon an investment strategy.



Being a commercial landlord

Investors purchase a commercial property for business reasons rather than use it to live in as a residential property.

When you purchase commercial property, you are essentially acquiring a business asset. As such, you need to fulfil the financial aims and objectives of the enterprise but to keep fully up to date with regulations and laws in Ireland. These govern the health and safety of tenants or leaseholders, the particular requirements if other people are employed to help run your business and a duty of care towards members of the public.

The purchase of commercial property comes with the collection of rent. This is central to the landlord’s business and relies on your relationship with tenants and leaseholders. In addition to the relevant legislation, many of the most critical aspects of the relationship between tenant and landlord are contained in a written tenancy or lease agreement.


Commercial Property Insurance 

If you are buying the commercial property with a mortgage you will need commercial property insurance to protect yourself. During the application process, your existing commercial or trading record will be taken into account when the lender decides on the interest rate you must pay on the loan. Different locations in Ireland and the nature of the building and business you will run are among the determining factors. 

Insurers may also distinguish between commercial property that is occupied by the owner’s business and one that is let to tenants. While both commercial properties are used for business purposes, a property you rent out comes with risks of a different nature than when it is occupied by the owner.

It is important, therefore, that you disclose your intentions for the commercial property you are buying on your application to the bank as well as the insurance company. Valuation is also an important aspect of commercial property insurance. The nature of that valuation, however, is something that may trip up the unwary property owner.

The principle behind the insurance comes from imagining a worst-case scenario in which your property is completely destroyed. The insurance you arrange needs to cover the cost of clearing the site on which the building is erected, engaging architects, engineers and lawyers to prepare designs and contracts for a replacement structure, and actually rebuilding the premises.

Some of the risks against which you need to ensure your commercial property include natural and man-made threats, risks and perils as well as insurance against injury or property damage as a result of connection with your property. You can choose to get unoccupied property insurance, which protects you from the risks and perils faced by your commercial property if it is left empty and unoccupied for more than a month or so.



Commercial Property Financing

Commercial property financing is different from financing for a residential property. The majority of commercial opportunities require investors to meet higher income or net worth standards. You will also be required to make a larger initial deposit and financial commitment.

Interest Rates

Interest rates for commercial properties depend on the current prime rate and an understanding of how banks actually borrow the money needed to give you a loan with a fixed or floating interest rate.

Prime Rate

This refers to the lowest rate that money can be borrowed commercially. Banks get their money by borrowing for the prime rate, loaning it to you, adding an interest rate on top of it. This allows them to make money off the spread. 


Banks might lengthen the amortization (AM) period. The longer the AM, the less debt you will pay on a monthly basis. The shorter the AM, the higher the monthly payment will be.  Each AM period has its pros and cons.

Longer AM has a lower debt payment, but a higher interest rate.

Shorter AM has a higher debt payment, but a lower interest rate.

Length of Loan

The length of the loan correlates with the length of the lease. When deciding on the best financing option, it’s important to consider both the length of the loan as well as the amortization period.




Commercial landlords have general responsibility for the maintenance and overall upkeep of the structure and fabric of their properties.

Some of these responsibilities may be shared between the landlord and the leaseholder. In some instances, landlords can charge the leaseholder a fee for certain cleaning and maintenance services they provide.

Although the lease may seem to shift many of the responsibilities onto the leaseholder, the landlord is ultimately responsible for:

  • the safety of gas supplies and any appliances the landlord supplies, with annual inspections made by a registered Gas Safe engineer;
  • the safety of electrical supplies and any electrical appliances supplied by the landlord, with inspections made by a suitably qualified engineer as and when this may be appropriate;
  • responsibility for fire safety may be delegated to the tenant in the specific terms of the lease agreement, but if in any doubt, the landlord may be assumed to retain responsibility;
  • responsibility for the management of any asbestos used in the construction of the premises rests with the landlord and there are heavy penalties – fines of up to £20,000 for individual landlords or unlimited fines for companies, plus up to two years’ imprisonment; and
  • fixtures and fittings that have been installed by the landlord need to be securely and safely made and maintained.



Investment in commercial property in Ireland is a sound and lucrative business opportunity for people who have done their due diligence.

Commercial properties open the door to many business opportunities as you can use the building(s) to run your own business or to act as a landlord in letting it to tenants. When acquiring commercial properties, you need to make insurance a priority – especially if you are letting the property to tenants or leaseholders. There is a wide range of risks for all types of commercial properties in Ireland once you assume the role of landlord.

Investing in commercial properties in Ireland can be a daunting process. However, it offers a number of advantages including, higher income potential, steady cash flow opportunities, and high grade tenants. With the help of an expert, you’ll be well on your way to earning passive income through commercial real estate in Ireland.