If you want to proceed with direct commercial property, there are some barriers to entry, and one of those barriers is ‘those who have the gold, make the rules’. Simon Paris joins me to discuss.
Those with the gold, make the rules!
There are significant benefits in the area of direct commercial property investment. Higher rates of return, greater opportunities to increase property value by augmenting lease terms, the tenants pay for everything…to name just a few.
There are also significant hurdles to overcome. Having a much larger deposit (like 35%), paying higher interest rates, and tighter lending rules overall are just a few of them.
More often than not, mainstream banks are saying ‘no’ to commercial property investors. Is this because it’s a bad idea? Not necessarily, but there are more risks and against a backdrop of increasing conservatism, borrowers need to be open to having a broader discussion with lenders who are not ‘mainstream’
Simon Paris joins me on this episode to discuss some of the rules that mainstream banks have and how they differ to non-banks.
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