Anyone who has invested in commercial real estate properties knows the risk/reward factors associated with it. One of the main hurdles investors have is finding financing for commercial real estate. Be comforted in the fact that there are lenders who will provide you with financing with good terms even if you don’t have the best credit. Don’t let that aspect stop you!
If you’re considering investing in real estate in the near future, just know there are also some fantastic features. Here are some of the main benefits of investing in commercial real estate.
1. Great Appreciation in Value
Any time you make an investment, you want to get the largest return possible on your money. Commercial real estate investments generally provide one of the best returns when compared to other types. One of the unique aspects is a property owner can play a large role in the increased appreciation of the property. Investing in improvements to make it more desirable and usable could provide some big rewards in the future.
2. Protects Against Inflation
When it comes to commercial real estate, it’s one of the few assets that will rise along with inflation. This is especially true when you own a property with multiple tenants and a high ratio of replacement and labor costs. Experts have indicated commercial real estate investments have the highest correlation when it comes to inflation in comparison to other asset types.
3. Secure Investment
When you’re securing commercial loans for real estate, you need to understand you’re investing not only in the structure, but the actual land itself, as well. For this reason, commercial real estate investors need to choose their investments wisely and consider the location, quality and other factors to maximize the asset growth. A commercial real estate investment won’t fluctuate as much as the stock market, so you can feel more secure with your investment.
4. Provides Regular Income Stream and Spendable Cash
The uniqueness of commercial real estate investing is you will almost always have a regular stream of income you can use right away. Tenants have to pay rent monthly, and rent is usually much more than the dividends you will get anywhere else. When you’re looking into financing for commercial real estate, consider the constant income stream you’ll get in return to pay back those loans.
At Commercial Mortgage Connection, we want commercial real estate investors to take full advantage of the benefits commercial real estate investing has to offer. Contact us to see how we can best serve you.
Recent statistics show a slowdown in residential real estate lending, with some reports indicating that lending dropped as much as seven percent from 2015-2016. Commercial real estate lending is down even more, declining by roughly 10 percent in that same period. With the trend set to continue in 2017, investors are wondering if they’ll be able to get a commercial property loan. Bank lenders have taken a big hit, but you may be surprised at the benefits market lenders have enjoyed as a result.
Market Lenders Have Fewer Regulations
Since private commercial lenders have fewer regulations to follow than traditional banks, they have the ability to meet the demand for any commercial property loan. Banks can only offer a certain interest rate to investors, which is typically higher than you can get with hard money lenders. As a result, statistics show market lenders have enjoyed a 700 percent growth in the industry over a span of about four years. With that trend not showing any signs of slowing in the near future, market lenders are destined to grow even more.
Market Lenders Will Gain Market Share
Private commercial lenders have more accessible underwriting than large banks, which is another reason why growth is projected to continue over the next several years. As is the case with almost any industry, there is usually always one sector that benefits from a decline. When it comes to commercial real estate, private commercial lenders have a clear advantage during this decline and, as a result, can grab market share.
Investors Can Get More From Market Lenders
Market lenders can offer investors a commercial property loan that traditional lenders simply can’t. For example, when an investor wants to finance a short-term deal that falls out of the underwriting criteria of a traditional bank. There are many other reasons why banks can’t offer the types of loans investors need, so market lenders are becoming a more popular alternative.
Commercial Mortgage Connection offers many different options to help you secure the commercial property loan that’s best for you. Be sure to contact us to learn more about how we can help.
Interest rates have been stable over the past several years, but it’s becoming evident that they’re now on the rise. Commercial real estate investors keep a close watch on interest rates for obvious reasons, but how much does the interest rate really affect them? For one, borrowing money is much more expensive with higher interest rates. But there are other factors that affect financing for commercial real estate when it comes to fluctuating interest rates. Here are a few.
Property Prices Decrease, Cap Rates Increase
There are many variables to consider when determining pricing and rates, but in general, property prices decrease and cap rates increase when interest rates rise. With higher interest rates, you may be able to lock in a price for a commercial property at a lower price, but you’ll most likely be paying more in the long term.
Increased Interest Rates Could Signify a Strengthened Economy
A higher interest rate is a common sign of a strengthened economy. With a strengthened economy comes a stronger market for real estate. While this isn’t a guaranteed connection, many business leaders are optimistic about the United States economy being on the rise in the near future. This means more people will have the funds to invest in commercial real estate, and commercial property lending companies will be able to provide more financing options for investors. And as interest rates continue to rise, commercial real estate investors will jump on the opportunity to lock in a low rate.
Refinancing Considerations for Investors
It’s always smart for commercial real estate investors to at least look at refinancing their property. With interest rates expected to climb in the very near future, many investors are thinking about refinancing now rather than waiting to see what the market does. Refinancing with a new locked interest rate can protect an investor from fluctuations and provide a more solid plan when it comes to planning out expenses and profits.
Commercial Mortgage Connection provides multiple options when it comes to financing for commercial real estate. We understand the impact interest rates can have on your investment, so we tailor your financing to meet your specific needs. Feel free to contact us at any time to learn more.
The key to successful real estate investing is finding the properties that reward you with the greatest returns. You should take into account factors like location, marketplace, and demand to truly nail down which properties are the best long-term investments. Investors can also glean insight from history. Here are some of the best properties to consider when seeking the best return on your investment.
1. Single-Family Homes
With the economy still a little shaky, people are hesitant to purchase homes they might not be able to afford. This makes single-family homes great investment properties for real estate investors. One concern when taking out investment property loans is how much you’ll need in order to maintain the property and still make a profit. If you invest in multiple single-family homes, you’ll have different issues to fix. However, maintenance costs shouldn’t deter you. A single-family home is one of the best investment properties to get a great return on.
2. Apartments or Multifamily Buildings
If you’re looking for an investment property with more controlled maintenance costs, then you should consider taking out apartment building loans. A typical apartment complex has all of the same appliances and parts, so replacing them is simple. Plus, the demand for apartments is greater than it’s ever been. People are constantly relocating due to work and other factors, so apartments are more attractive than purchasing or renting a home for those individuals. This makes an apartment complex or multifamily property a great investment.
3. Commercial Properties
Before you take out a commercial property loan, research the marketplace. A commercial property may look great and have impressive amenities, but if the location is poor or if the market is already saturated, you won’t get the best return possible. Commercial properties have the potential to be the best investment you make, but you have to do more research beforehand to ensure you get the best return.
Commercial Mortgage Connection is here to help you with any investment property loans you need. We want to help you see the greatest return on your investment property, so contact us today to go over your options.
It’s important to approach any investment with caution. If you’re considering investing in commercial real estate, most commercial property lending companies will tell you the retail industry isn’t looking good right now. But a good lending company will also tell you the retail collapse is not something you should worry about when it comes to your investment. Retail establishments come and go often, but a concern lately is that big name companies are closing their doors more regularly. Here are some reasons why you shouldn’t be concerned about the retail collapse when it comes to investing in commercial properties.
Growth Can’t Happen For Eternity
Even though some retailers may think their company is bulletproof when they are experiencing great success, that isn’t the case. The most successful retail stores know growth won’t happen forever, so they plan accordingly. Others opt for overly aggressive expansion, which creates problems when business inevitably slows down. Some stores have to close multiple locations, which causes investors to consider a commercial real estate refinance.
Weaker Performers Make Way for Strong Performers
When it comes to the retail sector in the United States, it’s no secret that the industry is over-populated. More stores are opening now than ever before, and because not all of them succeed, the number of store closures is on the rise. The good thing about this aspect is that weaker performers clear the path for strong performers in the retail market. Strong performers can gain more market share and, as a result, overtake some of the hottest locations.
Economic Impact of Retail Collapse
The retail collapse has brought on a mix of costs and benefits for the economy. It has an obvious impact on commercial mortgage rates, but those rates will still fluctuate in a stable market. There is a trickle-down effect with overall retail industry failures, but this shouldn’t deter investors from looking into commercial real estate for the long term.
Commercial Mortgage Connection is a commercial property lending company dedicated to helping you navigate through the choppy waters of commercial real estate investing in the retail collapse. Be sure to contact us to learn more about how our services can benefit you.
Commercial real estate and residential real estate share similarities and differences, both of which investors should be aware of. Expenses are generally higher with commercial real estate, for example, but can be shared with tenants. A commercial property usually generates more cash flow at the end of the day, so when it comes down to it, the higher expenses aren’t that big a negative.
If you’re interested in the world of commercial real estate, you’ve come to the right place. Here are a few tips to consider when breaking into commercial real estate investing.
Utilize Realtors Specializing in Commercial Real Estate
You may not know it, but residential realtors and commercial realtors are completely different. If you’ve used a residential realtor in the past and you trust his or her judgment, ask them to refer you to a commercial realtor. Get to know this new realtor as well as you can and be open about your investment goals so they can help you find the property that suits you best.
Find Ways to Make a Property Profitable
When securing a commercial loan in real estate, you’ll quickly realize there aren’t a lot of properties to choose from. However, you can still usually find a property to get started with. What most successful commercial real estate investors do is use their creativity to help make a property more profitable. This could mean renovating a building to create more open space for conferences, or it could mean reducing the open space to create more offices for potential tenants. There isn’t a single surefire way to make every single property attractive to businesses, but having a creative mind can go a long way in helping you improve your investment.
Evaluate The Market Before Investing
The unique thing about commercial real estate investing is no matter how glamorous the property is, it won’t be a profitable investment if the market doesn’t need the product or service. Do a thorough market analysis with your commercial realtor to determine what consumer needs could be met in a certain area. A property in an area saturated with other commercial properties could benefit from the surrounding activity, but it also could be a failure depending on the type of tenant you have on the property.
At Commercial Mortgage Connection, we spend more time with our clients than other commercial mortgage lenders because we want your investments to succeed. Contact us today to learn more about how our services can help you break into commercial real estate investing with ease.
When you secure commercial loans for real estate, you have the opportunity to put that money into a potentially profitable asset. But how can you be sure you’re investing in a valuable property? When considering a new investment, you should take some time to consider a variety of factors. The worst mistake an investor can make is jumping into a hot property without researching it thoroughly.
Here are some of the important things to look for before obtaining investment property loans.
In order for your real estate investment to be profitable for you, it has to be profitable for your tenants, too. You don’t want to invest in a commercial property in an underdeveloped location. Think about what your tenants would want to be close to, such as restaurants, shopping areas, and schools. These help make the property more attractive.
2. Property Taxes
When financing commercial real estate, consider the amount of property tax you’ll have to pay. These taxes can vary depending on location, so you’ll have to do your research. There are some scenarios where higher property taxes may be better for your long-term investment strategy, so crunch the numbers to see if the property is a good deal or a bad deal.
3. Amenities and Perks
Sometimes little perks can be a big selling point for potential tenants. Consider the different amenities of a property before getting commercial loans for real estate. If the property is attractive, for example, or if the property is on a bus route, tenants could find themselves more interested in the location. A property standing out in one way or another is valuable when it comes to securing and keeping tenants.
4. Future Development
You don’t have to invest in a developed commercial real estate property right away. Find out what the plans are for developing the land around the property. If there are imminent plans for commercial buildings, shopping centers, and housing communities, the value of your investment could soon rise. There are few factors that could hurt your investment when it comes to future development, but be sure to consider those as well before taking out investment property loans.
When you believe you’ve found the perfect property, Commercial Mortgage Connection is here to help with commercial loans for real estate. Be sure to contact us to learn about the advantages of working with us on your next investment.
Today’s landlords find themselves in a competitive real estate market. In order to get the best tenants, they’re forced to think creatively. Monthly rent can only be dropped so low because other expenses need to be taken care of, but there are plenty of other incentives landlords can offer renters.
When taking out apartment building loans, you want your investment to become profitable as soon as possible. However, you first have to understand the market and offer a better product than your competition. Here are some of the ways you can set yourself apart and attract the best renters.
Free Rent for All!
When landlords offer free rent, potential tenants may express some skepticism. In fact, they may want to examine the fine print of the lease agreement, just like investors should read the fine print when they receive apartment building financing.
But the reality is, offering free rent is a great way to attract some of the best long-term occupants. By offering the first month of living rent-free, a savvy renter can use the money saved to make some slight improvements to the home, appliances, or anything else. Giving away free rent isn’t always the best option for real estate investors, but sometimes a short-term financial hit can lead to long-term profitability.
More Money Offered For Improvements
Another incentive landlords use is giving cash to renters to make improvements to the home. Some renters want to feel like the home is theirs by having the ability to personalize the space. Landlords are sometimes hesitant to allow this, but it actually creates more long-term renters as a result. Giving renters the freedom to customize the space they live in helps them become more invested in the property, which makes them a better long-term investment for you.
Competition Will Drive Landlords to Offer More Incentives
Landlords are now forced to think outside the box when it comes to offering incentives to renters. And with some of the multifamily lending options available to investors today, they can afford to be more creative without going too far into the hole on a property. It’s important that investors find the best lender to obtain their apartment building loans so that they can offer more incentives to attract long-term tenants.
Commercial Mortgage Connection understands the need to appeal to renters in a competitive market. Our apartment building financing options take these incentives into consideration, so be sure to contact us to see what options we can offer you.