Finding Insurance for a Mixed-Use Property

Investing in a mixed-use property can seem like a savvy idea for investors

mixed-use property (residential and commercial) is technically classed as a commercial investment, which means it escapes the new tax changes that have affected residential buy-to-lets. Commercial yields also tend to be higher, with longer, more secure leases that guarantee a return for a fixed time.

You’ll see mixed-use properties on many high streets – they usually have a shop, office, restaurant or café on the ground floor, with a flat or a block of apartments above. But with totally different risks for the commercial and residential sections of the property, you’ll need an insurance policy that ensures you are protected in every scenario.

Mixed-use properties generally have different agreements for the different parts of the property. This can become complex depending on the type of business you own. For example, if you invested in a property where you rented out a dental clinic and owned a residential flat above, your insurance would need to cover not only the fixtures and fittings in the flat but also the far more complicated fixtures in the dental surgery.

The good news is that you won’t need to take out two separate policies to make sure you’re insured. You can insure a mixed-use building under one single policy – a commercial policy. Most residential insurers will not touch a property that has a commercial element.

This means your insurance will be a bespoke policy that takes into account the unique circumstances of the investment, looking at factors like:

  • What type of business will be running on the site? A second-hand shop or office is likely to be cheaper to insure than, say, a takeaway or a pub.
  • The location of the mixed-use property. If the property is located in a quiet, residential area, this can mean higher premiums for the business element and lower premiums for the residential element.

Comprehensive Cover

The insurance policy you get should also provide comprehensive cover which includes:

  • General buildings insurance
  • Rental income protection
  • Accidental damage cover
  • Public liability insurance
  • Cover for legal costs (if you need to evict tenants, for example)

Finding a policy that can cover all of these elements without breaking the bank can be tough. Here at Morpheus Insurance, we provide comprehensive cover for mixed-use properties. We can insure businesses including restaurants, cafes, regular shops, hotels, offices, surgeries and more, with a range of optional cover add-ons that make sure you’re protected in every eventuality.

If you’re thinking of investing in a mixed-use property, get in touch with the team at Morpheus Insurance today to find out more about your options and the cover we can provide.