Commercial
Commercial
We make Commercial property finance easy
For over two decades, Lifestyle Loans has been a trusted provider of commercial financing solutions to businesses and investors. This ranges from simple residential projects to complex multi-million dollar commercial and retail developments. We are consistently engaged in financing a wide variety of projects spanning commercial, industrial, retail, and residential sectors.
Frequently Asked Questions
Commercial loans can be used for a variety of purposes, including purchasing commercial property, funding major capital expenditures, maintaining operational costs, and facilitating business expansion.
Commercial properties usually need a higher deposit of 20% – 30% or more depending on the security. In comparison to Residential loans which can be sourced with as little as 5% in some cases.
Understanding how commerical loans work can save you time and money. Get in touch with us today to discover which lender and loan product is right for your next commercial property purchase.
With commercial loans you can only borrow a maximum of 80%, there is no lender’s mortgage insurance charged in commercial lending. The loan amount will depend on the security, and other factors such as your deposit, income, expenses, credit score, and the lender’s criteria. Fill out this form to understand how much you can borrow today.
Commercial property is used for business purposes and residential property is used to live in, whether it be an apartment, townhouse or house.
Here are some other things to consider:
- Lease length: Commercial leases typically have a longer duration compared to residential leases. A commercial lease often includes terms such as 5 years with two additional 5-year terms, along with annual rental increases and market reviews. On the other hand, residential leases are usually renewed annually, with rental increases subject to negotiation between the landlord, agent, and tenant.
- Vacancy: Commercial properties tend to have longer vacancy periods compared to residential properties. While residential properties are often quickly occupied, commercial properties can remain vacant for months depending on factors like location, size, fit-out, and market conditions.
- Lease terms: Residential leases across the state are quite similar, with nearly identical lease agreements regardless of the renting agent. In contrast, commercial leases vary significantly and often include negotiated terms between the landlord and tenant.
- Rent increases: Commercial leases typically include fixed-rate increases.
- Rental yields: Commercial properties generally yield around 4-6%, while residential properties yield around 3-4%.
- Maintenance and repairs: Maintenance and repair responsibilities usually fall on the commercial tenant, whereas for residential properties, these are typically the landlord’s responsibility.
- LVR/deposit: Commercial properties usually need a higher deposit of 20% – 30% or more depending on the security. In comparison to Residential loans which can be sourced with as little as 5% in some cases.
- Capital growth: Commercial properties may experience slower capital growth compared to residential properties, although this depends on the broader market.
- How is residential property valued? To determine the value of a residential property, agents or valuers typically look at comparable properties sold in the area within the past 6 months.
- How is commercial property valued? The value of commercial properties is often based on the strength of the lease, rental income, square meterage, and comparable properties. However, unlike residential properties, commercial properties such as office suites and industrial warehouses cannot be directly compared. Also, the value of commercial properties is less likely to be influenced by emotional factors on the day of purchase.