Insider Tips to Help You Discover How to Succeed with Commercial Property
COMMERCIAL PROPERTY FINANCE rates and fees are much more fluid than those associated with residential loans.
To get the best deal, you should know what the banks look for and consider the other factors that go into pricing for commercial loans. The following ways may assist you in securing better pricing for your commercial loan. [Read more…]
RESIDENTIAL PROPERTY INVESTORS commonly release equity in their homes in order to invest in other property. But can you do the same with your Commercial property?
It is possible for you to utilise the equity in Commercial property … but it is a bit more difficult and complex than with residential property.
Banks are more risk-averse to Commercial property funding than they are to the residential market. And they will want to have some measure of control over the use of funds — before releasing cash to you. [Read more…]
THE OTHER DAY, I was doing some analysis on the loans lodged over the past year … looking at the time-frames, and where the delays have occurred.
And I was struck by the number of stages a loan application needs to go through, before settlement. Plus the number of people the file depends upon, to go smoothly.
The people involved in this process can include the broker, the bank officer, credit analyst, valuer, borrower’s solicitor, bank’s solicitor, vendor’s solicitor, accountant, financial adviser (if financial advice is required), real estate agent and, possibly, the tenant.
As you can appreciate, delays can occur at the hands of any of these stakeholders with dire consequences. That’s why it is advisable (as far as possible) for you to retain as much control over the process as you can … in order to avoid potential pitfalls. [Read more…]
WHEN BORROWING against Residential or Commercial properties for investment, it is important to keep in mind the most effective ways of claiming tax benefits, if you wish to maximise the return from your investment.
This is particularly so, when the purchasers are couples — because working with the correct loan set-up can ensure the household tax burden is considerably reduced. [Read more…]
Part 2: Proper Loan Structuring can give you Protection.
LAST TIME (in Part 1), you discovered why the banks should not be allowed to call the shots. And perhaps a couple more Case Studies will help to further explain that.
He was a very successful property investor who had an impressive portfolio, consisting of several residential and commercial properties.
Kevin was able to build this portfolio through a mixture of a good knowledge of the market, savvy negotiating skills, a high-income job with a resources company and, it has to be said, some luck in picking the trends.
Kevin’s problem was that he wanted to retire early — which is something someone of his net worth should easily be able to do. But he made one major mistake. [Read more…]
Part 1: Don’t be easily Swayed by your Bank.
A COMMON piece of advice given by mortgage brokers to Commercial property investors — at least, by astute brokers — is to keep securities for each loan separate. In other words, any form of Cross Collaterization (as it’s known) is to be avoided at all costs.
Put simply, it is the combining of one mortgage registered against two or more properties (or sometimes even your business) as security. [Read more…]
Part 2: Remain in Control of your Destiny
LAST WEEK, we made a start on understanding the pros and cons of Bank bills. But you also have other options.
Non-bill facilities are available through the big four banks, but are generally priced in a way as to only be competitive at smaller loan amounts.
While the big four banks are generally able to price better than smaller lenders, there are other factors considered to be important than merely the cost. And for small business, the interest rate on their borrowing is a relatively small consideration, in the overall scheme of things.
Far more important is access to credit, and flexibility of being able to draw up and down on that credit. Because, having this ability will reduce your overall interest costs in the longer run. [Read more…]
Part 1: An Understanding, plus the Hidden Costs
WHENEVER YOU ARE financing a commercial property investment or a business, the types of funding can be broadly classified into two categories: bill facilities and non-bill facilities.
Bill facilities are charged as a margin over the inter-bank lending rates, published each day in the Financial Review as commercial bills; while non-bill facilities are charged as a straight interest rate.
The funds for these facilities may also be raised through the money markets, but they are priced on a simple interest rate basis over a loan term. [Read more…]
IT IS NO SURPRISE that banks are still rather coy about funding Developments, so maybe a few ideas on how to get your projects across the line could be helpful.
SHOULD YOU be fixing the interest rate for the term of your investment loan … or simply running with the best variable rate?
Lurking behind that question is another concern: Will interest rates fall any further; and if so, by how much?
OVER THE PAST few weeks … we’ve spent some time talking about the Anatomy of a Commercial Property Deal … how to to find Top Commercial properties and … the need for proper Due Diligence.
However, it’s probably worth showing you how to establish what funds you actually have available to invest upfront.
It’s certainly not a complicated process — but a vital one , nonetheless.
You see, many investors tend to overestimate (and will often even underestimate) the amount of the funds they may have available. And that immediately impacts upon the value of the property you can acquire. [Read more…]
WITH EVERY NEGOTIATION, you always need to be thinking on your feet. And here are several simple Tips to help you do just that.
WHEN YOU EMBARK on your journey as a property investor, it can be overwhelming – with a flood of information and diverse opinions. To help simplify the process, here are five essential tips for new (and seasoned) investors.
IT DOES NOT MATTER whether you’re an investor or an owner-occupier, there are several important factors to consider when purchasing a commercial property to ensure you make the right choice.
In a previous article, I shared a handy App to assist you in shortlisting potential properties. If you haven’t already downloaded it, simply click on the HiReturn Filter over on the right, to install it on your tablet or mobile device.
THERE IS A BELIEF among many experts that a surge in the stock market typically precedes a recovery in the commercial property market by about six months. And the start of this year saw equity markets gaining some momentum.
I HAVE BEEN ASKED countless times about the secrets to a successful negotiation. And I want to share with you the key elements to help make your negotiations effective.
But first, just watch this short video to gain a quick understanding of these three essential elements that form the foundation of every negotiation.
If you’re new to investing, you might be wondering if it’s possible to manage your own commercial property. The short answer is “yes”, but only if you know what you’re doing.
It’s important to note that owning a commercial property comes with certain legal responsibilities, particularly when it comes to compliance with Essential Services requirements under current Building Regulations.
The current trends in the business have made it clear that office landlords have to cater to the needs and preferences of their tenants. Building owners and managers (who understand and meet these demands) will be able to command higher rents and reduce vacancy rates.
To expand on this, here are four key tips to help attract quality tenants.
