SHOPS, offices, pubs, and restaurants feature regularly at our auctions and have become highly popular with private investors who want to diversify their portfolio.

Figures from global real estate advisers on returns (the average increase in property values plus rental income) show that since the slump of the early 1990s, commercial property has had 13 good years in a row.

Returns have averaged 12.8 per cent over the past decade. Indeed, after returns of 18 per cent and 19 per cent in the past two years, commercial property is enjoying something of a boom.

Many private investors view the commercial market as being less management-intensive and providing a more stable income flow than does residential property. Lower borrowing costs also make this an attractive option.

Auction is a popular way to buy commercial property owing to its transparent nature. In a marketplace where you can see what everyone is doing, it’s fair to say that the true value of properties is likely to emerge.

It is now easier to obtain financing from banks and building societies on commercial properties, although some impose stricter criteria than on residential homes.

So, how do you go about it? The rules for buying a commercial property at auction are much the same as buying a residential one - do your homework, and get your finances arranged.

Anyone buying at auction is expected to have their finances in place before bidding. It’s wise to arrange a mortgage in principle before buying at auction.

You have to pay 10 per cent of the purchase price on auction day by banker’s draft, building society cheque or debit card backed up by PIN number, and the balance within 28 days. If you fail to produce the full payment within 28 days, then you risk losing your deposit and being taken to court.

Do arrange to see your chosen property or properties. Inspect both the property and the surrounding area thoroughly and conduct any surveys and valuations in advance.

Get legal or professional advice from a solicitor and, in appropriate cases, a chartered surveyor. In most cases, any relevant legal documentation and special conditions of sale will be available at the auction house.