How to Purchase Commercial Investment Property in Perth

Understanding Commercial Property Investment in Perth

The commercial property market in Perth presents numerous opportunities for savvy investors looking to diversify their portfolios. Whether you're considering office buildings, retail spaces, or industrial properties, understanding commercial property finance is crucial for making informed investment decisions.

When buying a commercial property as an investment, you'll need to consider various factors including your financial situation, the loan to value ratio (LVR), and available commercial property finance options. Unlike residential properties, commercial investments typically require larger deposits and different lending criteria.

Commercial Property Loan Options Available

You can access Commercial Property Loans options from banks and lenders across Australia, each offering different terms and conditions. Major banks, regional lenders, and specialist commercial lenders all provide funding solutions for commercial property purchases.

Key loan features to consider include:

• Variable interest rate options that fluctuate with market conditions
• Fixed interest rate products for predictable repayments
• Interest rate discounts for qualified borrowers
• Different LVR requirements depending on property type

Factors Affecting Your Loan Application

Your credit history plays a significant role in determining loan approval and the interest rate you'll receive. Lenders assess your borrowing capacity based on several factors:

1. Income and financial stability - Demonstrated through banks statements and financial records
2. Credit history - Previous loan repayments and credit behaviour
3. Loan amount requested relative to your income
4. Property type - Non-specialised commercial property often receives more favourable terms
5. Deposit size - Affects your loan to value ratio (LVR)

The Application Process for Commercial Property Loans

Applying for a Commercial Property Loan involves a more detailed process compared to residential lending. The streamlined application process typically includes:

• Completing detailed loan application forms
• Providing comprehensive financial documentation
• Property valuation and assessment
• Legal documentation review
• Settlement arrangements

Lenders will require extensive documentation including recent banks statements, tax returns, profit and loss statements for businesses, and details about the investment property you intend to purchase.

Understanding Costs and Considerations

When calculating loan repayments, consider all associated costs beyond the principal and interest. Additional expenses include:

• Stamp duty on commercial properties (varies by state)
• Legal fees and conveyancing costs
• Building and pest inspections
• Ongoing property management expenses
• Potential capital gains implications upon sale

Note that restrictions apply to certain loan products, and some lenders have specific criteria for different property types or borrower circumstances.

SMSF Commercial Property Investment

Self-managed super funds (SMSFs) can also invest in commercial property, with specific SMSF Loan Interest Rate products available. These loans have unique compliance requirements and lending criteria that differ from standard commercial loans.

Working with Professional Advisors

Given the complexity of commercial property finance, working with experienced mortgage brokers can help you understand available options and find suitable lending solutions. Professional advice becomes particularly valuable when dealing with:

• Multiple lender comparison
• Complex financial structures
• Timing considerations for property purchases
• Ongoing relationship management with lenders

At Luxe Finance Group, we understand the Perth commercial property market and can help connect you with appropriate lending solutions for your investment goals. Our team works with various lenders to find commercial property finance options that align with your specific requirements and financial situation.

Call one of our team or book an appointment at a time that works for you to discuss your commercial property investment plans and explore your financing options.