Using A Comercial Mortgage For Your Business


Using a​ Comercial Mortgage For Your Business
Many people who invest in​ property or​ who own a​ business overlook the​ advantages of​ buying commercial premises .​
Although it​ is​ often cheaper in​ the​ short-term to​ rent property for business,​ there are a​ number of​ benefits to​ buying .​
If you​ are interested in​ commercial property,​ then this guide will tell you​ the​ best way to​ go about getting a​ commercial property mortgage.
What are the​ advantages of​ a​ commercial mortgage?
There are many benefits to​ buying commercial property using a​ commercial mortgage .​
Firstly,​ the​ commercial mortgage payment is​ likely to​ be the​ same as​ the​ cost of​ renting the​ property,​ and you​ have the​ added financial bonus that you​ will eventually own the​ property .​
Also,​ if​ you​ rent a​ property then you​ are subject to​ rent increases which can harm your business .​
Commercial mortgages stop you​ from having your rent payments drastically increased and so give you​ peace of​ mind and stability .​
Also,​ the​ interest payments on​ a​ commercial mortgage are tax deductible,​ which may help you​ to​ reduce your overall tax burden each year .​
If you​ have a​ large amount of​ commercial property then any unused areas could be sub-let to​ other companies,​ although this usually requires the​ permission of​ the​ lender.
What are the​ disadvantages?
As with any type of​ loan there are also disadvantages to​ getting a​ commercial mortgage .​
Firstly,​ you​ will need to​ pay a​ large deposit as​ down payment on​ the​ property,​ which you​ may not be able to​ afford or​ is​ allocated for more important business items .​
If you​ are a​ business that anticipates rapid growth or​ the​ need for a​ change in​ location fairly frequently,​ then getting a​ commercial mortgage may not be right for you​ .​
It is​ much harder to​ relocate if​ you​ have to​ sell your property first,​ and if​ your business relies on​ quick relocation you​ could lose out .​
However,​ perhaps the​ biggest problem with owning commercial property is​ the​ responsibility involved .​
Unlike rental property you​ are responsible for the​ upkeep and maintenance of​ the​ building,​ which may end up costing you​ a​ lot of​ money should something go wrong.
What are the​ costs?
Commercial mortgages have higher rates of​ interest to​ residential mortgages,​ because the​ properties are usually of​ a​ higher value and the​ risk is​ greater .​
Although business success can be predicted,​ there is​ no guarantee a​ business will do well,​ and so the​ lender has to​ charge higher rates to​ account for this .​
Apart from this,​ the​ repayment methods and loan terms and fairly similar to​ residential mortgages .​
Most banks and mortgage lenders can offer commercial mortgages,​ but as​ with any loan it​ pays to​ shop around to​ find the​ best prices.
Who should get a​ commercial mortgage?
If you​ have a​ business and believe that you​ will remain in​ a​ location for a​ long period of​ time,​ then getting a​ commercial mortgage could be right for you​ .​
Leisure businesses such as​ restaurants and pubs are a​ good candidate for commercial property mortgages,​ as​ expansion usually requires additional units rather than moving premises .​
Also,​ you​ have the​ benefit of​ owning the​ property and perhaps benefiting from an​ increase in​ property prices.



Using A Comercial Mortgage For Your Business



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