Commercial Property Loan

A successful investment through a commercial property loan requires a solid understanding of complex market factors.

There is a variety of options when it comes to commercial property loans

When considering commercial property loans, numerous options are available similar to other loan types such as residential home loans. However, commercial property financing introduces additional factors and associated risks. Therefore, a successful commercial property purchase requires a deep understanding of market dynamics and the lender’s situation.

What is a commercial property loan?

What is a commercial property loan in Australia?

A commercial property loan is a loan taken out with the intention of purchasing a commercial property, such as an office building or a retail space. These loans generally involve much larger amounts of money than home loans.

Successful commercial property investments require a deep understanding of market factors like commercial property loans, property management, leasing arrangements, and the associated risks. At MoneyLab, our loan experts are here to guide you through the commercial mortgage process and find the right lender for your needs.

Click here for expert commercial loan advice.

Key Benefits

Expert commercial property loan advice

Our team of highly experienced commercial property loan experts will first analyse what options are currently available on the market, then we will offer you a tailored solution based on your personal circumstances and life goals. We’ll deliver the perfect commercial property loan for you, so that you can continue to grow.

When it comes to commercial property loans, there are a wide variety of options available. If you are familiar with other types of loans such as residential home loans, these options work in a very similar way. As an investor, there are many loan rates to choose from, from fixed rate to variable, split rate, principal and interest rate or interest-only loans. If these terms don’t mean anything to you, or you want to brush up on your property loan knowledge, reach out to one of our finance experts today.

Key factors when taking out a commercial property loan

Our loan experts recommend you take the following insights into consideration:

Leasing Periods

In the world of commercial real estate, the rental period is typically longer than in the residential property space. This is a benefit for investors as it gives you greater certainty regarding rental income, and commercial properties typically experience less tenant turnover. However, the flip side is that vacancy periods can be longer, so this is something to keep in mind.

Tax Obligations

A Goods and Services Tax (GST) applies when you buy a commercial property so when you are forecasting your finances, make sure you budget for 10% on the property’s purchase price. As an investor, you can claim the GST back. Keep close tabs on this to ensure you have enough cash flow available. You should also be aware that, unlike residential property, the costs of maintenance is covered by the tenant.

This will save you time and money as an investor, but it also means that more of the rent you receive goes towards your profit which again, will have an impact on your tax obligations.

The Risks

Commercial property is often regarded as a higher risk investment when compared to residential property.

This certainly does not mean it is not a good investment option, but it does mean that having a trustworthy and knowledgeable property investment strategist is paramount. With this type of investment, we especially recommend you to consult an expert who can assess your financial circumstances, goals, and willingness to take on this higher risk investment.

Frequently Asked Questions

One key difference when it comes to commercial property loans is that you usually need a larger deposit to secure your mortgage approval. As a rule of thumb, you will want your deposit to be at least 30% of the purchase price. If you are already a homeowner, your investment strategist might recommend you to take out a line of credit loan where you offer your home as collateral in exchange for being granted a lower rate loan.

Commercial loan interest rates depend on a wide range of factors and regularly fluctuate. To find out how much interest you might pay on your commercial property loan, it’s important to seek expert advice. We can work with you to research the best rates and lenders, so that you walk away with a great deal.

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Our Team

Mark Blackwood

Mark Blackwood

Mortgage Broker
Brett Hunter

Brett Hunter

Mortgage Broker
Kai Southwood

Kai Southwood

Mortgage Broker
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Other mortgage options

Bridging Loan

Found your perfect property before you have sold your existing home?

It is a common problem. A bridging loan could be the solution you have been looking for.

With general market uncertainty, price fluctuations and stagnating auction clearance rates, among a myriad of other factors, many buyers are finding their new dream home, without having sold their existing home. Find out more about how you can solve this issue with a bridging loan.

Line Of Credit

Have you ever found yourself needing a quick large sum of money?

Chances are you have, and it most likely will not be the last time. Unexpected expenses pop up in life for us all and, for whatever reason, you will likely experience times when borrowing money is inevitable. For many home buyers and property investors, taking out a line of credit is a necessary exercise and can be used for a deposit for the next property. If any of this is relating to you, then read on and find out more about this Australian mortgage option.