How to purchase a commercial property

Applying for commercial property finance in Australia can be a stressful and complex process for new investors. Below we’ve compiled 6 simple steps to point you in the right direction for your next property investment.

1.  Understanding Your Borrowing Capacity: Speak with an expert commercial property finance broker like Evoke Capital who can assess your individual situation and provide you a guide on the maximum borrowing and purchase price you can achieve.

2.  Identify Your Asset Class: There are many different types of commercial properties. Understanding which type of property you need / want is critical. You can do this via your own research, or in conjunction with a buyers agent. We recommend both to help you on your learning journey.

3.  Seek Professional Advice: Advice that may be required,will be from a finance broker (how much can you borrow), solicitor (review contracts / structure your purchase), accountant (how can I ensure my purchase is tax effective), financial planner (how does this fit into my overall plan) and a buyers agent (ensure you select the right asset).

4.  Negotiate A Purchase: Look to negotiate a purchase with a due diligence period (cooling off period). This enables a thorough review of the building to be completed, a valuation to be ordered and an unconditional approval to be completed.

5.  Submit An Application: As noted above, here you would formally submit an application for unconditional finance. Note that pre-approvals cannot be done for commercial property due to the variables associated from asset to asset. However, your business finance broker can work close with the shortlisted lenders to ensure appropriate appetite can be provided before you exchange.

6.  Settlement and Management: Once you’ve settled, you will engage a property manager to assist with the ongoing management of your commercial property.  

By following these steps along with the advice from your commercial advisors, you can look to protect yourself against any mishaps and enjoy the benefits of commercial property ownership.