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- Hi, I'm Connie from Prosperity Finance,
sharing the best financial tips
so that you can be more successful
with achieving your financial goals.
Recently, we had a lot of inquiries
about commercial property investing.
Well, there's so many reasons
people are interested right now,
such as higher yield,
rezoning potential, and also there are so many
new policy introduced by the labor governments
that are actually exempt from commercial property.
Would all be really helpful if we can show you
how much you can borrow if you want to purchase
commercial investment property.
And, in fact, I have include a link below,
which you can download a copy of this calculator
so that you can have a rough idea
how much you can borrow.
Firstly, let's have a look what this calculator looks like.
Right, so,
you can see it's a really simple page, right?
There's only two numbers you need to put in.
So, they are highlighted in green.
The first number is purchase price
or indicative purchase price.
Second number you need to put in is the lease income.
That number is actually exclude GST and also
excluding outgoings 'cause a majority
of commercial property,
the lease actually
doesn't include outgoings.
It's actually going to be take care by your tenants.
So, you can just simply extract that lease income
from the lease agreement.
Now, once you input these two numbers,
you will see three numbers below.
First number is the Rental Yield.
So, you can see in this example,
the yield is 6.5 percent.
While you think it's pretty high,
it's actually quite normal.
That's one of the reasons commercial property
are quite popular at the moment, right?
Compared to residential yield.
Now, the next number is the maximum borrowing,
if you purchase at that price with that kind
of a lease income.
Well, it is a magic number.
But in fact it's actually a combination
of LVR and also the lease income.
But, hey, you don't have to worry about
how it's calculate.
All you need to input is the purchase price and lease.
Then, it will tell you how much you can borrow.
And the last number is the remaining balance
you need to contribute to complete the purchase.
In this case, it's 411,000.
Right.
So, you can see it's really a simple calculator.
It will give you borrowing capacity instantly
if you, you know, looking to purchase
some particular commercial property.
So, if you're interested, please click the link below
to download a copy for yourself.
Just bear in mind that this calculator
is just indicative
numbers.
When the bank assist commercial lending,
they actually look at other information, as well,
such as building conditions and location.
More importantly, it's the tenants.
So, who are your tenants,
what industry they are in
and what kind of business
they're operating,
how long they been in the industry, et cetera.
'Cause the tenants' risk is quite important factor
when they consider lending you money
to purchase commercial property.
So, it looks simple, but it's actually
has a lot of things to consider.
So, if you are interested in investing commercial property,
best to give us a call, and we'll walk you through.
And it's actually case by case.
Great, that's it.
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Thank you for watching.
I will see you next time.
Bye, for now.
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