Commercial real estate is one of the most popular investment options. It can be used for any purpose:
- It can be used as an office space
- A place to live
- As a store.
The use that you have in mind will determine how much money you need to invest in this type of property.
At one time these loans were only issued to companies that had huge amounts of money in the bank and very good credit.
However, a lot has changed, and options are available for different types of credit and income levels. Click here to learn more
Buying a new building here are a few things to consider:
- Price per square foot.
- Rented spaces (rent roll)
- How much rent you can get from the property.
- Cost of construction.
- Occupancy, use of property
Why are the interest rates Higher for commercial real estate loans than residential loans.
The reason for this is because the risk associated with commercial real estate is higher than the risk associated with residential real estate.
Commercial real estate can be very expensive and the value of the property may not increase for a long time. This means that you need to be prepared to make large payments if you decide to buy a commercial property.
what to check Before You start Building Your Commercial Property?
The local laws and zoning ordinances to see if you need a permit before you can build a commercial building.
You should also check to see if the property has been previously developed. If it has then you will need to hire a professional engineer to help you determine the amount of space you need to buy.
You may also want to hire a structural engineer to help you determine the strength of the structure.
When buying commercial real estate, you should think about:
- The location
- Surrounding properties and their prices.
- Traffic the property gets.
- You may want to be close to a freeway to attract more customers.
One important note to remember, with any business loan is…
The names listed on your Corporate Articles especially the ones who have 20-25% ownership.
They will have to sign for the loan and most times be apart of the qualifying process. To learn more click here.
Last But Not Lease You Should…
Consider the condition of the property and that there are no major repairs needed and the cost of maintenance. If you can’t afford to pay for all of these costs, then you should consider another property.