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Thanks for the quick reply. Is there anything that I can not expect to have reimbursed?
Thanks for the quick reply. Is there anything that I can not expect to have reimbursed?
Generally speaking, the bigger the premises, the more the tenant is likely to be on the hook for...
Any Capital expenditure
Massive differences in finance as well so its worth factoring in the additional costs associated with commercial lending when comparing the two.
Many commercial leases have makegood and refit clauses which are capital expenditure.
Yes - I don't think most people expect the fees, low LVR and the margin that comes with Commercial lending. I have seen clients thinking like resi to find rates 3% above market, $2.2K a year in rollover fees + LVR around 60% + $45 a month fees. + Val. They do get surprised. One of the benefits of using a SMSF for some sml business owners. They use their superfund to avoid a bank.
Commercial REA take a bit upfront too as its hard work. Long vacancy periods are a risk for commercial. A very different market.
But these are generally borne by the tenant or taken from the bank guarantee
Massive differences in finance as well so its worth factoring in the additional costs associated with commercial lending when comparing the two.
Or a tenancy incentive upfront. It can be hard to pull tenants and is often a LL cost with refit clauses too. Or a negotiation problem when you quit the lease (the LL will only want the fitout if a new tenant also wants it. Some don't care and want it stripped = Westfields). Not all tenancy capex suits the owner....
There can be significant differences in finance but it is not necessarily so, I have a commercial loan with Westpac @4.57% and fees that add about 1%, If I increased the loan limit which I would do if I wasn't planning on selling one security, the % of fees should come down, to make the finance cost close to the same as my 5.17% residential rate.