Commercial Property Loans

There are many finance options that are available to those wishing to purchase a commercial property. The best options for you depend on your individual needs, such as whether you are wanting to purchase as an investor or as a business owner. 

At Mortgage Choice Mitcham & Happy Valley, we pride ourselves on being your loan experts. We are dedicated to working with you to find the best finance that suits your individual needs. We explore the rates and features of different loans from over 20 different lenders, ensuring we find the best loan management option for you. 

There are two different scenarios that work for commercial property.

• Buying commercial property as an investor, and 
• Buying commercial property for your business. 

Buying commercial property as an investor

Purchasing commercial property is similar to purchasing residential property. There are, however, some differences that investors need to be aware of. 

A commercial property can provide an investor with ongoing rent from the tenant— referred to as the "lessee", as well as long-term capital growth. 

Unlike residential property, leases with commercial property are longer, there is the potential for higher returns but this also comes with a higher risk. 

When initially purchasing a commercial property, it is important to consider the 10% GST that is payable on your investment, which needs to be calculated into your budget. One benefit of owning a commercial property is that the leases tend to be for a longer period than residential properties, usually, commercial leases extend for a five-year period. In addition, the lessee pays for most of the costs associated with the building, for example repairs and maintenance. This can result in a commercial property being a more lucrative and low-cost investment than a residential property. 

One disadvantage to owning commercial property is that it is often considered a higher risk investment. Rental income from commercial properties is higher than for residential property, however, commercial property can experience longer vacancy periods. If you choose to sell your commercial property, it can be harder as there is a smaller pool of potential buyers. More specialised commercial properties also make it harder to find the right buyer. 

Factors outside your control

Commercial property relies heavily on the strength of the local economy. Unlike residential property, commercial property can experience long vacancy periods. To safeguard against this, purchasing a building that will appeal to a diverse range of business can be beneficial. In addition, reviewing your cashflow can provide you with a clear indication of how well you will be able to handle any periods of vacancy. 

Professional support is essential for a good deal

Here at Mortgage Choice Mitcham & Happy Valley, we can discuss your finance options and can explain different loan strategies to enable you to own commercial property, including through the use of a Self-Managed Super Fund. 

 

Buying commercial property for your business premises

Owning your business premises can hold significant advantages, and investing in commercial property can offer you this opportunity. 

As a business owner, you know how important it is that your customers associate you with a specific location. Leasing your business premises can be more affordable in the short-term however, this does not guarantee security of tenure. Investing in your own premises could be a better long-term option for you. There are a number of ways you can achieve this.

1. Buying in your business's name

Buying commercial property in your business name makes it an asset of the business. This can open up options as you can use the cash flow from your business to repay the loan. As you build equity in your property, this can be used to secure loans for other business purposes. 

2. Buying in your own name or through a self-managed super fund

Buying commercial property in your name or through a self-managed super fund enables you to benefit from the capital appreciation of the property and your business leases the property from you. This benefits both you and your business. You can build personal wealth in addition to providing your business to long-term access to premises. 

3. Your Mortgage Choice broker- a source of expert advise

Commercial property can often be complicated, but here at Mortgage Choice Mitcham & Happy Valley we try to make it as simple as possible. Contact us to discuss the different financing options and the lender requirements for your needs. We will work with you and your accountant to make sure we find the right choice for your needs. 

We understand the complexity of commercial finance. We can offer you valuable insights to help you secure the right loan for you.

 

Contact Mathew Call: 0403 424 443 or Nicolle Call: 0411 154 185 to arrange a no-obligation meeting and discuss your loan options. 

 ^{Our team service the Happy Valley & Mitcham area including Westbourne Park, Clovelly Park, Bellevue Heights, Blackwood, Belair, Torrens Park, Cherry Gardens, Aberfoyle Park, Meadows, Colonel Light Gardens and surrounds.}