ADVANTAGES OF COMMERCIAL MORTGAGE IN THE BANKING SECTOR
Owning a commercial property has its benefits which include:
Lower interest rates
Commercial property mortgages typically have lower interest rates than other unsecured borrowings. Choosing to have fixed monthly repayments means you can accurately use them in your business planning and forecasting, enabling you to structure the finance of your business with a bit more certainty[8].
Capital gains
Substantial capital gain can be made when you buy a commercial property. This can be a good way of realizing capital growth over a long period as (long-term) property prices always rise[9].
Renting potential
If you have any additional space in or on the property you own you can monetize it by renting out the surplus space to generate additional income[10].
Financial Planning
Commercial property mortgage payment plans usually extend for several years which allows a business to focus on other important business matters such as sales, monitoring overheads and training staff.
No ‘empty money’ rent payments
Your mortgage payments will probably not cost you any more, per month, than what your equivalent rent would be. But as you own the building, your equity in the property will continue to grow with each mortgage payment, providing you with a more solid financial foundation.
Capital Gains
Long-term property prices rise and buying your premises is a form of investment so long as the area you are buying in is right. Business property prices can often rise quickly in a short space of time, making your investment a shrewd one.
Ending a Mortgage
If you find yourself unable to pay your mortgage, or you need to move to bigger premises, or if you decide to close your business, you are still left with plenty of options if your mortgage is commercial. While getting out of a long-term leasing arrangement can often be difficult, a mortgage can still be covered if you decide to sell the premises or if you decide to rent it out and maintain the asset.
