Is it a Good Time to get a Commercial Investment Property Loan?

Making a commercial property investment is always an interesting decision to make. It's not good buying a commercial property when theres a recession in progress and it's not a good time to buy when the economy is booming and the cost of commercial properties are going sky-high. Buying a commercial property at 'just the right time' maximises profitability and capital gains and seems to be at the cusp of a rise. The question is, how do you know where this cusp is?

How do you know where this cusp actually happens often depends on experience, judgement and good business information. To get this experience will cost you one way or another but if you do your learning right it won't break the bank and you will make enough incrementally to keep investing and gaining the buying experience as you increase your commercial investment portfolio.

It will always be a great help if you have a good business network in your area of interest so you have local information about what is planned for your area. Once you know that a development is being considered or talked about you are in in a better position to be an early beneficiary of the project. This does not mean you ever get involved in insider trading or anything illegal but with a bit of imagination you will be able to 'see' spin-off's from any new development and position yourself, your property portfolio or other commercial interests accordingly.

It's not a good time to buy commercial property during a downturn in the economy or in a recession because not many people want to start a business when the economy is bad. Getting a good rent paying tenant is too risky a business if they may have trouble making enough money to pay the rent. If it is a start-up business then the risks are even higher.

On the other hand, it can also be the best time to pick up commercial properties at basement level fire sale prices. This works well if you have a considerable percentage invested in the property and whatever money you borrow against it will not leave too big a dent in the bank account if you don't get a rent paying tenant immediately. If you can afford the mortgage and aren't financially geared dependent on finding a tenant you could be 'sitting pretty'. Buying at a time when there is plenty of properties on the market can give you the buyer a lot of leverage and you could pick up a really good deal.

Is December 2009 a good time to take out a commercial investment property loan? The answer to this depends on trusting your commercial real estate company advisor if you have one. Whichever way s/he advises, the ultimate decision has to be yours and you are where the 'buck' begins and 'ends'.

Personally, I wouldn't be venturing into highly leveraged commercial property right now simply because the world is not yet far enough away from financial catastrophe for my liking; but I'm one of these people who like to be embedded in a rock face, surrounded by a wide moat with a very heavy drawbridge across.

Commercial Property Investment Loan