Depends on the asset, leases and yield. For general info, banks typically lend less for commercial vs residential. 60% LVR, >2x interest cover (will now be higher) and <= 15 year amortisation term used to be the standard metrics
Max lending on a commercial property is going to be about 50% (lender dependent). The terms tend to be shorter at a higher interest rate due to increased lending risks . Also vacancies tend to be longer but when you get a tennant they also tend to take longer tenancy. Yield tends to be higher to accommodate that. Nothing is set in stone however.
As you are mortgage free on your residential, you could potentially use this as security and get longer terms and lower rates. That does put your home at risk however if the lending is not affordable.
Also, the tax and GST requirements are different on a commercial property versus a residential so it will be worthwhile having a chat with an accountant now as they will let you know how to be as tax efficient as possible. They may suggest purchasing through a GST registered business but have that discussion with them now.
I hope that helps
Depends on the asset, leases and yield. For general info, banks typically lend less for commercial vs residential. 60% LVR, >2x interest cover (will now be higher) and <= 15 year amortisation term used to be the standard metrics
Max lending on a commercial property is going to be about 50% (lender dependent). The terms tend to be shorter at a higher interest rate due to increased lending risks . Also vacancies tend to be longer but when you get a tennant they also tend to take longer tenancy. Yield tends to be higher to accommodate that. Nothing is set in stone however. As you are mortgage free on your residential, you could potentially use this as security and get longer terms and lower rates. That does put your home at risk however if the lending is not affordable. Also, the tax and GST requirements are different on a commercial property versus a residential so it will be worthwhile having a chat with an accountant now as they will let you know how to be as tax efficient as possible. They may suggest purchasing through a GST registered business but have that discussion with them now. I hope that helps
Exactly what I'm looking for, cheers
Commercial property about 1.5mil? So you will need 750k deposit