What can commercial finance be used for?
There are a wife choice of finance options available to purchase a commercial property, and the option best suited to your needs will depend on whether are buying as investor -either directly or through your self-managed super fund- or as a business owner for use in running your business.
Buying a commercial property as an investor
- Lease terms are generally longer than residential properties which provides greater financial security.
- It gives you the security of having your own business premise rather than being at the discretion of a landlord
- Stable capital growth
- If you're looking to lease out your commercial property to a business, gross rental yields are usually much higher than the residential property, average 7-8% compare to a residential property gross yield of 3-4.5%
Drawbacks
- The value of the property may not appreciate over a period of time like residential property generally does
- Leasing out a property is generally harder to finance tenants than a commerical property
- Less stability with tenancy