Ok interest rate with nab for New retail workshop/retail space?

Discussion in 'Commercial Property' started by seachange, 20th Mar, 2017.

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  1. seachange

    seachange Well-Known Member

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    Ive just bought a new commercial investment property in Sydney. I paid most of it , but have borrowed $350 k for the balance. Nab are offering me fixed interest only for three years at 5.46%. Is this a good rate? So far I only have residential rates to compare to, and this is my first IO loan, so there are a few new variables here for me.
    Secondly , it is currently tenanted. All the properties I am in as a commercial tenant go up 3 or 4% PA- which is standard? I'm thinking i should aim to increase their rent 3%, but it's negotiable. I want to keep them as tenants, and have no vacancy period.
     
    seachange, 20th Mar, 2017
    #1
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  2. Shahin_Afarin

    Shahin_Afarin Residential and Commercial Broker Business Member

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    Get some specific advice but its sounds a Suncorp loan.

    Variable rate of 4.44% (or fixed @ 4.44%), no valuation (NAB are probably charging close to $1k for the val), app fee of $800 AND you get an Offset! Boom time!
     
    Shahin_Afarin, 20th Mar, 2017
    #2
  3. Simon Moore

    Simon Moore Residential & Commercial Mortgage Broker Business Member

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    Assuming LVR is below 65%? There are some offers going around at 4.59% at the moment, but with commercial it's really hard to tell. Is it multi-use security? If it's specialised at all then the banks will look at it differently.

    On a loan that size, my experience is that I struggle to get the majors to compete on price. They often add on large upfront costs too.
     
    Simon Moore, 20th Mar, 2017
    #3
  4. Simon Moore

    Simon Moore Residential & Commercial Mortgage Broker Business Member

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    That's on a resi security, 4.94% on commercial security (if you wanted to use resi security look at Citibank or Homeloans)
     
    Simon Moore, 20th Mar, 2017
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  5. Shahin_Afarin

    Shahin_Afarin Residential and Commercial Broker Business Member

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    Sorry yes 4.94% - the NAB loan would be also up for regular reviews whereas you are not going to have that with several lenders like Suncorp.
     
    Shahin_Afarin, 20th Mar, 2017
    #5
  6. Simon Moore

    Simon Moore Residential & Commercial Mortgage Broker Business Member

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    All my investor loans I have done with NAB (I often do a standard loan with NAB where clients plan on doing a development in the future) have been 15-year loan terms with no reviews. A trading business would definitely have annual reviews with NAB however.
     
    Simon Moore, 20th Mar, 2017
    #6
  7. RickProp

    RickProp Well-Known Member

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    Is there a lease? If so you need to know this back to front. Your rental increase will be dictated by that.
     
    RickProp, 22nd Mar, 2017
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  8. Scott No Mates

    Scott No Mates Well-Known Member

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    • Is the tenant still under lease or on holdover? You will be bound by the lease.
    • There is no standard rent review only what has been agreed and documented in the lease
    • Any renewal is a risk some more so.
     
    Scott No Mates, 9th Apr, 2017
    #8