Whether you are a seasoned property developer or a newbie, you may not know everything about financing property development. The following are 5 tips to get you started on the right path:
· How much you have in terms of down payment. In most cases, you will be required to meet the cost of the property. The financial institutions of development finance will require you to make an upfront down payment before they can even finance you.
· Your capacity to repay the loan. Don’t take a loan you can hardly afford to repay. Your repayment ability will be determined by your income together with the rental income you expect from the finished building.
· The type of commercial property you are constructing. It could be an office, shop-front, office or factory building. The type of commercial property is a key determinant on how much financing you will qualify for.
· The location of the commercial property. Look at it this way, there are some locations where commercial property is in high demand while others are not. If your property is in the right location, the lender has got no reason to refuse to advance the financing to you.
· Details concerning the lease and conditions of the commercial property. This will determine the viability of the project and the likelihood to bring returns.