Cost on Purchase of Commercial vs Residential

[GreenTreeFrog]

Can anyone give me an idea on the difference in costs associated with purchasing commercial property compared to residential?

This is our first venture into this side of Commercial and I would love any advice.

Thanks!

 

[JoannaK]

Hi Melissa,

are you referring to stamp duty and other ancillary costs associated with a purchase, or are you referring to price differences between residential and commercial property?

 

[GreenTreeFrog]

Stamp duty and other ancillary costs associated with a purchase.

Thanks!

 

[grossreal]

hi GreenTreeFrog
the cost are the same except the valuation
a comm val is more expensive around 2.5 to 3 grand budjet for.
the rest is the same.
if using a broker they charge more on a comm just because they can if you let them but that can all be negotiated.
but apart from the val the others should be the same as costs go

 

[GreenTreeFrog]

OK thanks.

The bank manager is on his way here for us to discuss lending for Commercial Property. Anything you can advise I should ask him? Being a first time commercial lender I want to try and cover all bases so am not sure what questions I might miss.

Thanks!

 

[APerry]

Hi Melissa,

The questions are basically the same as for a residential loan, you want to know what LVR they will allow, what the interest rate will be, what fees they will charge. If the loan is large ask him about interest rate hedging and if he can give you access to a treasury consultant.

Regards
Alistair

 

[Rolf Schaefer]

Check out for:

• monthly/quarterly fees
• annual review fees
• unused limit fees

The major banks are very good at hiding these fees.

 

[geoffw]

Can anyone give me an idea on the difference in costs associated with purchasing commercial property compared to residential?

This is our first venture into this side of Commercial and I would love any advice.

I don't know about mcommercial property loans, but I do know about commercial business loans. This may well not be applicable, but it may well be worth checking out.

My business loan has a 10 year P&I- and at over 9%. So interest payments are higher than resi- but principal repayments are even higher than the interest. I didn't realise this to start with, and it does have a huge cashflow impact on my business.

I don't know if the same exists for commercial property. I'd like to know myself- it's worth asking the questions.