If you’re an avid investor looking to make your mark on the world, you may decide to look at differentoptions. After all, commercial property ownership comes with many benefits, such as better net returns than residential property. It makes sense to find out what you can borrow to start making money as soon as possible.
However, before you jump right in, it’s essential to know what you’re up against. There’s much to discover before you put that ‘sold’ sign up on a new office block or commercial warehouse.
What is a Commercial Property?
When you start looking at commercial finance and what’s available, then it’s because you’re potentially hoping to buy a commercial property. However, it’s helpful to know what ‘commercial’.
Commercial property could be an office – either a single floor in a building or an entire building. It could also be a warehouse, a showroom, or a light industrial unit. Even the size differs. You could buy a building with a few square meters or a few thousand.
If you want to get into commercial investing with all guns blazing, you may also like to look at a heavy industrial building, retail store, shopping center, or a complete development project.
Even though a development project might comprise residential complexes, you can still classify it as a commercial property. Even a retirement home or village could be eligible for commercial finance. Talk to a real estate agent who can walk you through the many viable options.
What Are the Benefits of Investing in Commercial Property?
If you’re even contemplating commercial finance, then it’s clear to see you’ve been doing your homework. There are many benefits associated with commercial property ownership. There is also plenty ofl out there to show you what it entails.
The most standout feature of commercial property ownership is that the net return can be far greater than it normally is for a residential property. If you’re a landlord of a residential property with tenants, you’re liable for all repairs and maintenance.
A leaking tap, wear and tear, paint, and paper all fall into your lap. If a tenant leaves your property in a terrible condition, you sometimes have to fight tooth and nail to see any of that money back.
In the commercial world, it can often operate a little bit differently. Many New Zealand tenants in commercial buildings can be liable for repairs. They must also pay to decorate the building or room the way they want it. Even insurance, rates, and utilities are something the tenant has to factor into their budget. The landlord can sit back, relax, and watch the profits roll in.
How to Find a Commercial Property
As of April 2019, there were nearly 3,500 commercial properties listed on. That doesn’t even begin to incorporate the multitude of other listing websites, private seller listings, and “quiet” sales. Therefore, you are going to have no problems finding a viable commercial property. The best thing you can do is pay a visit to your local commercial real estate agent. Chat to them about your needs and find out what’s on their books.
And, What About Finance?
Getting a business loan through your bank can be tricky, but fortunately, your bank is not the only place to get commercial finance. Many different non-bank lenders can find out what you want, then do their best to deliver.
What’s more, the process is far more streamlined and faster than a bank in many cases. If you have a clear-cut proposal, you can even expect your loan amount in your bank account by the next day.
The problem with banks’ business loans is that they don’t often understand your need for commercial finance fast. Some opportunities arise and disappear quickly, and you have to jump on them to avoid missing out. The speed of loans through a non-bank lender is often why many people prefer them.
What Are Your Options for Ownership?
When the time comes to let the hammer fall on your commercial property of choice, you may like to think about how you can purchase it. Will you buy it on your own? Will you partner up with someone else? Will you form a company or a trust? Talk to an adviser to determine the best approach, then start looking at your commercial financing options.
Current interest rates for your nest egg are dismal at best. Why let your money sit there doing nothing when you could grow it instead? It might be time to look at commercial finance options and become a commercial property owner. However, before you dive right in, find out what a non-bank lender can offer and what the best property for you might be. You can then get the ball rolling quicker than you thought.