Commercial property investment
Investing in commercial property can be a rewarding venture - but like all investments it is not without risks. Here are some key points to consider:
- Market Research: Understand the local market dynamics, demand, and trends. Research areas with growth potential, rental yields, and historical performance.
- Property Types: Commercial properties include offices, retail spaces, industrial warehouses, and more. Each type has different risks and returns.
- Financing: Explore financing options. Commercial loans have different terms compared to residential mortgages. Call me for more information for your situation.
- Leasing and Tenants: Evaluate existing leases, tenant quality, and vacancy rates. Stable, long-term tenants contribute to consistent income.
- Property Management: Decide whether you want to manage the property yourself or hire a professional property manager. Good management ensures smooth operations.
- Due Diligence: Conduct thorough due diligence. Inspect the property, review financials, and assess any legal or environmental issues. Consider how you will repay the loan if the property were vacant for an extended period.
- Risk Management: Diversify your portfolio. Commercial properties can be affected by economic cycles, industry-specific changes, and market fluctuations.
There are though potential benefits when investing in commercial property compared to residential property. These can include:
- Higher Rental Yields: Commercial properties tend to provide higher rental yields compared to residential properties. This means you can potentially earn more income from your investment.
- Reduced Expenses: It is common practice in commercial lease agreements for the tenant to pay property expenses the landlord would pay under a residential lease. These may include council rates, strata fees, water rates and insurance.
- Longer Lease Terms: Commercial leases are usually longer than residential leases. Longer leases contribute to stability and higher property value. However, they can be more complex due to business-related use and may require legal assistance.
- Diversification of Portfolio: Adding commercial properties to your investment portfolio helps diversify your risk. It balances out exposure to different market cycles and economic conditions.
Commercial development
Having funded numerous commercial developments including childcare centres, multi-use multi story, industrial prefab and many, many more, I have the experience to find the right lender for your development.
Different lenders will have different terms for standard conditions such as loan to value ratios, interest rates and progress payments. They can also have a range of different requirement in relation to pre-sales, owner builder requirements and other nuances.
As your broker I will work with you to understand your development in detail to secure the best funding solution for your needs.
Refinance existing commercial loans
When did you last have your commercial property loan reviewed? With lease agreements and terms generally longer for commercial properties than residential, all too often borrowers set and forget their loan and do not review the rate.
If you have not reviewed your commercial property loan in the last two years, you are likely paying a higher rate than you need to be. With many lenders offering competitive rates to refinance your commercial property loan, call me now to discuss your current loan terms and challenge me to find you a better rate.