Investing in commercial property such as offices, stores, factories, warehouses or even car parks can be profitable and affordable and can sometimes cost less than investing in residential property.
At Home Loan Republic we are experts in commercial property finance and can guide you through the specific considerations for this kind of loan.
There are several benefits to commercial property investment when compared to investing in residential property:
Investing in commercial property is usually considered high risk when compared to residential property investment.
Most commercial properties require a larger deposit than residential properties. This can be as much as 30% of the value.
If the property is empty and not a ‘going concern’ it may be harder to find the right tenant quickly. Also, some commercial properties have a specific use – such as a warehouse or car park. An office suite or retail outlet, which could appeal to a broader market, might be a better choice.
Funding a commercial property investment is much the same as taking out a mortgage on a house. There are loans available with a variety of features including variable interest rates, fixed rates, interest-only, split loans and line of credit loans. Some loans offer useful facilities such as redraw, offset or no-fee additional repayments.
Using the equity in your home as collateral against your commercial property loan can reduce the interest rate.
Finding the right loan for the purchase of a commercial property is a little more complex than sourcing the most appropriate residential property loan.
There are many factors to consider including the type of property, its location, what it is used for and how long you intend to own it.
As with regular home loans, the team at Home Loan Republic can call upon the services of 28 lenders all of whom have a number of suitable products on offer. The choice is large and varied which is why it is important to get expert advice before taking the plunge.
At Home Loan Republic, we regularly save our clients thousands of dollars by assessing their current home loan situation and taking advantage of better deals. Arrange your own Home Loan Health Check today and reap the benefits.
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