There are many ways of investment, which comes in a variety of flavors. Today, most of the people start capitalizing in buying residential real estate simply because they’re more acclimatize to buying a single family residence, which is much simpler and easier to fathom than commercial property. However, the best-upheld way of attaining high returns has been through investment in the commercial real estate.
Buying a commercial real estate is a complex proposition, where sometimes become challenging even for experts to maximize their investment value. However, the feat in commercial real estate investments requires the right outlook, plenty of fortitude, willingness to spend time, upfront in exploring the market, arranging the right finance, establishing the right type of investment and clench of the potential risks.
Understand the Calculation
As the commercial property valued differently, the income on commercial real estate is calculated on usable per square foot area but in a residential home that’s not the case. Through commercial property a big cash flow can be seen as you get added income on residential unit, than on a single home.
However, while evaluating commercial real estate, you should get used to with the commercial key conditions and metrics such as – what is the net operating income of that property, what is the current cap or capitalization rate, which estimates the net current value of the property.
Expert Advice
Buying commercial real estate is often a complex process and having an expert beside, will certainly help with most of the steps. Appointing a commercial real estate broker, a lawyer, an accountant and a mortgage broker will sway your acquiring process. These professionals can support to value properties and will assure contracts are upright before signing. And indeed can help you to identify a bank which can finance once you select the property.
Attention to Detailing
During the buying process, it’s essential to review the agreement fine prints and perform an extensive study on the developer and the development. Buying the property from the renowned developers might make the purchase process smoother. Make sure to look at, if there are no issues with the property that could imperil your business anon. Examine wisely and find if any impending pitfalls such as constructural defects, or dated installing. You should also make sure no insurance dues or lawsuit affect the property.
Commercial Mortgage
In Dubai commercial mortgage guidelines are slightly different as compare to residential mortgage. And today affordability is a big issue in commercial real estate, so before you approach a bank, you should work with an accountant to determine your budget. In commercial funding, the bank requires a deposit of about 30 to 40 percent of the sale price and the loan terms is up to 15 years only in the UAE. To qualify for the commercial funding the bank reviews buyer’s business profile and company audit report, director’s income documents and bank account statement. Commercial mortgage loan-to-value generally falls into the range of 60 to 70 percent. And the current commercial mortgage rates in Dubai start from 4.99 percent. It is always favorable to shop around for the best mortgage package.
If you need any assistance, let our certified independent mortgage consultant help you to plan your investment in Dubai. 4C Mortgage Consultants provide best customized mortgage consultancy for a resale property, new purchase property, off plan purchase, construction mortgage, project finance, commercial mortgage, buyout, equity release, Non-UAE Resident, Debt Restructuring in Dubai. Follow us on Twitter, Facebook, and LinkedIn