When it comes to investing in a commercial property in Australia, you have a wide range of options. However, you need to choose the best one.
Considering the increase in prices of warehouses, shopping centres, offices and new developments, you might be looking for ways to get finances in order to acquire a commercial property.
When a business activity is conducted on a real estate property, it is referred to as a commercial property. The term can also refer to land that is bought to obtain profit.
To get various financing options, you can consult stamfordcapital.com.au. They are the leading experts in commercial property financing solutions and offer a broad range of investment options.
Commercial Property Loans
Most of the times, commercial loans become a necessity for owners of small brands and businesses who cannot afford to buy large or expensive properties.
A unique set of factor and rules affect commercial property loans and these determine the amount you can borrow and the time required for that amount to be paid back in instalments. Commercial loans normally have higher fees than home loans. The pricing and interest rates also vary.
Amount You Can Borrow
For home loans, buyers can borrow almost 80 % of the property’s price. On the other hand, while getting finances for a commercial property, you would have to pay far more cash as the first instalment.
Home loans can also go down when the investors lose their interest in the property market, but commercial loans are difficult to tumble.
Property Development Finance
Getting finances for developing a property is normally a short-term loan. You can use that amount to refurbish and repair an existing property or develop a completely new building.
The instalment period can stretch up to two years but you might have to pay up to 70 % of the total value in advance.
Investors who have multiple rental properties are eligible to take this long-term business loan. They can pay the whole borrowed amount as a single loan but that depends on the lender. The rental income determines the serviceability of portfolio finance.
Investors and property developers often opt for this short-term financing solution as it is an easy and quick method to purchase a piece of land. It is like a temporary loan which will get your work done while you look for a permanent source of finance.
That is why the word “bridge” is used in this term as it helps you by forming an easy and alternative path. Many times, lenders use bridging finance to buy and renovate a property. It can be considered as some other form of property development finance.
Some people also make use of a bridging loan for a short-term commercial purpose as they have a clear exit strategy.
The choices that we have described are some of the commercial property financing options in Australia.