Investment properties are excellent investment vehicles as they produce powerful ROI in the long run. Are you too interested in investing in an investment property the coming year and looking for a decent commercial mortgage? Well, your mortgage terms depend on a number of factors. The bottom-line is you have to prove to your lender your potential as a reliable borrower with a high ROI-driven investment property.
The post below offers 4 expert tips for getting the best rates on commercial mortgages for investment properties.
Amp up your credit score
If you are looking for favorable terms for your commercial mortgage, boost your credit score. Your lender will expect you to come up with a minimum score of 680 while discussing mortgage terms. If your credit rating is below 680, work towards improving it. You will immediately rake up your chances for great rates if you can show a solid 700 score and can also assure over 30 percent down payment.
This is another significant advice for getting a commercial mortgage loan with excellent rates.
Location of a property determines its appeal to tenants and simultaneously influences the overall worth of the building. A smart lender would anyday prefer to shell out money for a property that can guarantee high demand and safe returns. As per the experts, properties in populous and urban neighborhoods make powerful investment properties. if you are renting a place, you will certainly want it to be located in a convenient, well-connected place- flocked by different amenities. So, if you can invest in such a property, you can always be assured of high demand among tenants. Likewise, your lender too will be assured of the high worth of the property and reward you with favorable mortgage rates.
High quality tenants
The return of your property is dependent on your rent roll. No wonder, your lender will be interested in the type of tenants you will be having in your property. Credit-worthy, responsible and matured tenants are always favored as they guarantee timely rent. So, focus on getting safe tenants who will be particular with rent which will assure timely payments from your side as well.
Longer lease terms
Commercial mortgage lenders prefer longer lease terms. Longer lease term guarantees easy cash flow over a lengthy period of time. This way, the borrower will have a steady supply of money to repay the mortgage over the years.