Handy Hints for Buying Commercial Property

Handy Hints for Buying Commercial Property

• Consider your ownership structure with a view to tax effectiveness as well as asset protection

• Every dollar counts from a cost perspective so when it comes to finance, seek more than one quote and never accept the first offer from your lender

• Consider your loan structure – interest only vs P&I; fixed vs variable; overall lending term. These all have implications for risk management, cash flow, tax effectiveness and cost.  Does your loan structure match up with your intentions for the property?

• Be careful of lenders offering 3 year terms to keep the rate low – what are their intentions and what are the possible costs when your review comes due in 3 years’ time?

• Ensure your lender is disclosing hidden costs – valuation fees, review fees, ongoing fees, legal fees, guarantee fees and search fees all add up and are often only found out when the loan agreements arrive

• Don’t be afraid to look at alternatives to your current bank – your banker’s role is to maximise profit; there may be another lender with a better appetite for the transaction or with a loan structure that better suits your needs

• Don’t be afraid to reconsider your existing loans – you wouldn’t be complacent in managing your investment, so don’t be complacent when managing your loan

These handy hints have been brought to you from:  

Rod Cross Business Finance Specialist

0437 124 936 |  rodc@regfin.com.au  |  www.regfin.com.au

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