All Topics / General Property / commercial property questions

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  • Profile photo of ctlctl
    Participant
    @ctl
    Join Date: 2004
    Post Count: 14
    February 12, 2004 - 3:33 pm

    hi everyone,

    I have just come up with some more questions, thanks so much for all your help.

    On what basis that a commercial property being evaluated ?

    If it is on leased out, would a valuation from local council have any merit to the bank when considering lending ?

    Thanks veyr much.

    CT

    CT

    Profile photo of AdministratorAdministrator
    Keymaster
    @piadmin
    Join Date: 2013
    Post Count: 3,225
    February 12, 2004 - 3:53 pm

    The interest rate is usually a bit higher than for a home.

    I say ‘Usually’ though I have learned that it is possible to get similar rate as applies to residential.

    The secret (if there is such a thing) doesn’t lie in the lender so much as in the approach to the lender.

    Also, generally the length of the lease to the main tenant determines to a great extent the term of the loan.

    With a bit of luck count on a 10 year loan term.

    Pisces

    Profile photo of ctlctl
    Participant
    @ctl
    Join Date: 2004
    Post Count: 14
    February 13, 2004 - 2:23 am

    Hi Pieces,

    Thanks very much for your input.

    I think Steve mention (in 2002 newsletter) about he got a 80% LVR loan and and 25 years term for his first commercial property. does this exist anymore ?

    CT

    Profile photo of yackyack
    Member
    @yack
    Join Date: 2003
    Post Count: 1,206
    February 13, 2004 - 2:27 am

    Yes, you can do this if you have equity in a residential property. You can use the residential property as security and borrow at a lower rate for a longer period of time. But its mainly based on the equity you have on the residential property.

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213
    February 13, 2004 - 5:41 am

    Without considering other security, it may be possible to get 80% on a commercial property if it is a good deal in a good location. But generally 605 to 75% LVR.

    Valuations would be done using comparable sales (if available) and would incorporate other things such as leased amount, length of lease left, any options to renew etc. Much more complicated and more costly than residental property valuations.

    There is one prouct available with Citibank where they will lend based on the rental income from the security proeprty only. max 60% LVR.

    Terryw
    Discover Home Loans
    North Sydney
    [email protected]

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

    Profile photo of FrankYoungFrankYoung
    Member
    @frankyoung
    Join Date: 2003
    Post Count: 13
    February 24, 2004 - 1:39 pm

    isn’t using your home as security to buy commercial propery risky? ie compared to using your house to purchase a residential prperty. makes me think. any suggestions?

    regards

    frank young

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