Commercial Apartment Mortgage Loans: Why It’s Still a Great Investment

Owning an apartment building may not seem like an obvious investment option, but getting commercial apartment home loans has never been easier. Real estate has suffered during the recession, there’s no doubt about that, but it’s still one of the safest investments a person can get into. The government is backing investors developing multi-family properties and there has been a big shift in the economy towards rental properties.

A lot of this has to do with the economy that affects people so much. Rental accommodations are becoming more valuable and viable for people who have had to tighten their belts during the recent credit crisis. Banks are not lending money to potential homeowners as easily as they used to be and there is a need for quality apartment buildings and rental accommodation across the country.

Applying for commercial apartment home mortgage loans is a process that has been further simplified by the rise of many independent finance companies. They are more prepared than the big banks to make commercial mortgage loans for apartments and can also offer different types of loans depending on the needs of the applicant. Government involvement in this type of lending has meant that banks and other financial institutions can offer loans of a higher percentage, sometimes even up to 80%, because the government is essentially guaranteeing the loan.

Commercial apartment mortgage loans come in different types. The conventional type of loan, which is offered for a long term of about 30 years and has a fixed interest rate, is the most common, but a good commercial loan company will advise you on what is best for your specific situation. This can be arranged through a bank or a smaller independent finance company, but it can be a slightly more difficult process to get the loan approved.

Another way to find commercial apartment mortgage loans is to contact a private investment company. These investors are looking for projects they can invest in on a daily basis, and while the loan may not be as high as usual, only 60-70%, it is a way to avoid a lengthy application process. Many forms of private investment take the equity of the property as collateral for the loan, so the rate is slightly lower. However, the advantage of this is that you may not need to go through lengthy processes and credit checks to get approved for a loan.

The most risk-free investment in commercial property is to form a joint venture with other people. This considerably reduces risk while increasing the investment portfolio. There are a number of finance companies that regularly partner with individuals to secure commercial apartment home mortgage loans so that development can proceed.