Commercial Property Loan How to get it Approved

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Commercial Property loan is obtained through several basic requirements that are somewhat different from the residential mortgage loan requirements.

When you invest in a piece of commercial estate, you generally have to take out a mortgage to pay off the cost, just like with a residential purchase. Yet, the factors determining whether or not you will be approved for an investment property loan are somewhat different and the requirements are more demanding. Commercial mortgage lenders will look at several financial aspects including a property appraisal, a credit check, the down payment, and the Debt Service Coverage Ratio.

A property appraisal is required to determine the market value of the commercial building and accompanying land. The appraisal keeps the lender from inadvertently loaning you more money than the real estate is worth, thereby reducing the risk of loss for the lender. Appraisals are also conducted during residential home purchases, but the price-deciding factors are different. A commercial property’s value is based not only on the condition of the roof, the plumbing, and other systems, but also on the size, location, and accessibility of the place.

With an investment property mortgage loan, you will also need to demonstrate a good credit record. Of course good credit is a plus in residential mortgages, but because commercial properties generally cost much more than the residential properties, the credit requirements tend to be more stringent. In addition, checking your credit history and score, lenders will want plenty of income and asset documentation to make sure you will be able to make your mortgage payments. If it is your own business that will occupy the business space, the lender will want the proof of the profitability of your venture.

Down payments are another determining factor in whether or not you will be approved for a commercial property loan. In the residential world, borrowers can often get away by contributing very little and sometimes even nothing up front in the form of a down payment. The big price tags on official and business properties, however, makes lenders very cautious as the risks are much greater. Large down payments are usually required for an investment property mortgage loan, with the minimum being 20 percent of the price. In many cases though, the average seems to be a down payment of 30 to 45 percent. You are then provided with the loan of the remaining amount of the purchase price. The amount you are loaned compared to the actual price is called the Loan to Value ratio (LTV) and is a very commonly used percentage in the mortgage world.

Finally, you will be approved for a mortgage based on the Debt Service Coverage Ratio (DSCR) of the commercial real estate. This is the amount of money the realty generates each month from rents and other fees (the net cash flow) versus the amount of the monthly mortgage payment (the debt service.) This ratio helps lenders to determine how much you can reasonably afford to pay on your commercial property loan each month. Most like to keep the ratio between 1.1 and 1.4. A ratio of 1.4 means that for every dollar you pay in mortgage payments, your property should be generating $1.40. Your revenue would therefore be larger than your debts, and you would theoretically be able to repay your loan.

Certain commercial lenders may have additional loan requirements, which are not listed here, but the basics remain the same for all. Be sure to shop around and ask each lender how he or she determines its approval. You can be competitive in the commercial property loan market by doing your homework and coming fully prepared to the negotiating table.

Acquiring commercial property loan is not an easy task as there are many stringent and basic requirements to be fulfilled prior approval. For detailed information on investment property loan and lucrative commercial property dealings, you can visit, http://www.kiscl.com.

Why Every Property Investor Needs A Tax Depreciation Schedule

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Unfortunately too many property investors in Australia lose out tax depreciation benefits worth thousands of dollars every year. They fail to claim the legitimate investment property depreciation deductions. Not claiming the tax depreciation on your property is like not charging rent to your tenants.

One of the major reason why they don’t have a depreciation schedule is simply because their accountant never asks them to get one. Maybe because even their accountant is unaware about it. So lets try to understand what a depreciation schedule is and why does an investment property owner needs it?

The dictionary definition for depreciation is: “A decrease or loss in value, as because of age, wear, or market conditions.”

Investment property depreciation is a form of income that property investors can make, in the form of tax depreciation deductions. The Australian TaxationOffice (ATO) allows investment property owners to depreciate the value of their investment properties and claim the amounts as tax deductions against the income tax that they have to pay on the profits. Maximum property depreciation deductions can generally be achieved on new properties, however older renovated properties can also be entitled for significant investment property depreciation benefits. But, the depreciations are obviously incurred more on newer properties.

Therefore, it is advisable that, when investing in property, one must strategize on purchasing brand new properties which offer high levels of depreciation. And, we can utilize the tax depreciation benefits to sustain the investment property while it grows older. As authorised by the ATO, depreciation schedules can only be obtained from registered quantity surveyors in Australia, while your accountant can be consulted for tax deductibility of the items included in the tax depreciation schedule.

Thus, it’s imperative for all property investors to at least inquire whether or not they are eligible to any investment property depreciation deductions on their property. The easiest way to find this out is by contacting a reputable quantity surveyor who have considerable expertize in preparing tax depreciation schedules. The quantity surveyor will ask a few standard questions to determine whether it is worthwhile, and how much tax depreciation deductions you can claim. The fee to prepare a depreciation schedule is 100% tax deductible.

The best thing about investment property depreciation is that we actually didn’t pay for it, i.e. we don’t have to pay anybody for the “decrease or loss in value” of the investment property, but we are allowed to claim the tax depreciations! People in the accounting industry generally call this paper loss, since no money actually comes out of the investment property owner’s pocket!!

Property For Sale — Profit And Motive

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Property for sale occurs when the owner of a property wants to give up ownership to another interest buy selling the claim or ownership to that property. The motivation is usually profit or to simply gain additional income. An owner will place their property for sale, quite often, with a broker and advertisements will be placed to announce the intent to sell.

Property comes in different forms. The word itself can be attached to land. The land can range in any size and can be developed or undeveloped. The land may be zoned for a specific use, such as commercial or residential or industrial. The word may not apply to land, but instead a building or house or apartment/condominium. A person selling their apartment or condominium, like house or land, can advertise it as property for sale.

The majority of time when we think of property for sale we think of houses and condominiums for sale and occasionally land. Kinds of property most often advertised are residential units, houses and apartments. These advertisements can been seen in a variety of sources, such as newspapers, magazines, the internet and billboards.

The motivation for selling property varies. Profit is a key factor, but not always the driving factor. Profit may be a driving factor where the property was purchased as an investment and either it was allowed to sit for a period of time (months and years) and gain in value, or it was developed and then sold. Similarly, a house or condominium may have been purchased as an investment and years later sold as its value increased. Little might have been done to the residence; it simply appreciated in value as time went on.

The house or apartment may have been purchased and remodeled or renovated and then quickly sold for a profit, taking into account the cost of renovations and broker fees and taxes. This quick buying, renovating and reselling of a house is commonly known as “flipping a house.” This has always been a business practice where intelligent and savvy buyers have been able to make quick money. The process is getting more recognition now as more people have entered the business arena. Numerous successful flips in a years can lead to a generous income, some people making hundreds of thousands of dollars and more.

Very often property for sale comes about by a person’s simple desire to move and change locations. Here profit is certainly an aspect desired, but not the main motivation. Depending on how long a person has lived in their property and how well they have maintained it and how well the surrounding neighborhood value as stood, they can stand to make a large profit. Homes sold tens of years later can increase in price by ten times or more.

Residential and Commercial Property Tax Loan

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There are more than 3,900 local government entities in Texas that collect and spend residential and commercial property taxes. They include cities, counties, school districts and other special districts that local voters have authorized to collect and spend a specific tax amount for their operations.

All property taxes, regardless of who is collecting it and for what, are local. The state and federal governments do not get involved. In fact, Texas has no state property tax. Whatever taxes have been imposed will be collected by the local tax collector and distributed to the various local taxing entities.

Before looking at how to get some property tax relief Texas , you should know that this is how the local government provides services – keeps the schools, hospitals and roads open, and pays for essential services and public facilities such as fire departments, parks, etc.

Before signing on the dotted line for one of the residential property loans Texas lenders offer, it would be advisable to figure out exactly how much property tax you will be liable for as the home owner. Visit the county property appraiser’s office and ask for the tax history of the property. Some counties allow people to see the records online too.

If you are buying the property as your primary residence, you may be eligible for a homestead exemption. Residential properties purchased as vacation homes or real estate investments do not get this exemption. However, there may be other exemptions available in special cases. Talk to a local real estate agent or broker and find out if there are any such exemptions available in the county regulations or municipal code.

Commercial properties won’t be getting any exemptions. In fact, as the property values climb, so will their taxes. Since the value of property in a commercial zone is more often than not likely to keep getting higher, the tax burden will also grow steadily. On a related note, rezoning can often cause a huge change in property tax levels. For instance, if a purely residential zone is rezoned to allow mixed-use developments, the values of all residential properties in and near the zone will shoot up high.

If you are unable to pay the tax at the moment, do not let it go unpaid. The penalties are inexplicably high, and may be as much as 47 percent in the first year alone. Letting it pile up like this can lead to seizure of the property or the taxing authority may get a tax lien that makes it impossible to sell or otherwise use the property to raise equity. Instead of getting bogged down in this mess, get a real estate tax loan and clear off the property tax dues.

The property tax loans Texas lenders offer differ for residential and commercial properties. Find Texas tax loan solutions that match your property and pay off the tax. You can pay it back it in installments along with your basic mortgage payments. The interest you pay is far less than the penalties and interest you pay the taxing authority, and you can live without fear of losing your property.

Author Bio:

Property Tax Solutions provides a convenient option of paying your Commercial & Residential Property Taxes in flexible mode of loan in 10 years term. Replace the burden of paying your Property Taxes In Texas in easy monthly payments.

Why Buy Property In Gurgaon Now

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Why to buy property in Gurgaon now? This is the confusion confronting many prospective investors Gurgaon property in India. And a good number of these investors are non-resident Indians (NRI). There is a plethora of confusions and contradictions that pave way for such apprehensions. However, the primary reason for this conundrum is the recent recession and its resultant repercussions reflected in the real estate sector in the country. As is widely known, the recession is a global phenomenon and no economy in todays world can remain unaffected and aloof from its sway. Noticeably, it is widely felt that the slump that emanated from global recession is evening out in the Indian context and it augurs well for the property investment in Gurgaon. Hence, it is a matter of bare horse sense to identify the opportunity and spot the best properties which can fetch a good value addition in the coming future.

Why I say this is the best time to buy property in Gurgaon is because the sway of the recession is not fully over and the real estate sector is still in a sort of stagnation. In this commiserative milieu, prime properties can be got at rates at which you may not be able to acquire in the near future. The Gurgaon property market will recoup from the slump within a short while and the prudent investor should have made his purchases by the time and be ready for resale at higher prices. There is another dimension to this perspective. Indian real estate industry is undergoing a metamorphosis where new macro-economic and sector-specific factors are catalyzing new market equations. Further, in the opinion of international analysts, Indian estate sector is going to enter a growth phase in the coming years. Jones Lang LaSalle, the internationally well-known investment and property analyst says: economic recovery during CY 2010-11 is likely to reinvigorate the interest of foreign investors in Indias Gurgaon real estate market. We expect enhanced capital inflow in the real estate sector in the medium-to-long-term.

I would with abundant confidence reiterate that any apprehension as to why buy Gurgaon properties in India now is out of place. As aforesaid, the projected growth profile in the national income of Gurgaon in the coming years will have a direct link to the growth in the real estate sector. Also, it is estimated that 10 million residential units of the middle-income-level will be in need in Gurgaon in the coming years. This new demand is chiefly due to the interest of the middle-income-level segment in the wake of price-stagnation of the recessionary phase. Also, the hike in payment for Government employees and better pay-scales in the private sector have augmented the demand for residential units. This aspect will have a direct and salutary effect in the property sector.

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