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PROPERTY LOANS - photo graphics man holding dollar rolls small house module

Depending on your commercial business goals, you may be the right candidate for a property loan. A property loan can help give you the funding to make your desired real estate investment.

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When considering where to invest your money, real estate can be an incredibly rewarding option. The average long term real estate return on investment is 10.6%, which is around the same as the stock market. For commercial real estate, the average return on investment is slightly lower, at 9.5%.

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There are ample real estate opportunities as a developer, corporation, individual or in a joint partnership. Purchasing as an individual has its perks – namely, being able to keep all of the profits for yourself. However, depending on your finances and credit score, it may be in your interest to seek a partner for your investments. Getting a loan to buy property can be easier as a collective.


The primary of a commercial property loan is to finance the purchase of a commercial space and/or income-producing property. Whether this be a singular Airbnb or an entire apartment building complex, a commercial mortgage can help you get the funding you need to make this business idea a reality.


When applying for a property loan, you are going to want to have a credit score of at least 660+. Some property loans will require collateral, however, not all of them do. When you apply for a secured loan, you can get approved more easily and get lower interest rates.

If you do have bad credit, consider applying for the loan with another person as a joint partnership.


TYPES OF REAL ESTATE LOANS - photo graphics person pointing where to sign on contract

The primary of a commercial property loan is to finance the purchase of a commercial space and/or income-producing property. Whether this be a singular Airbnb or an entire apartment building complex, a commercial mortgage can help you get the funding you need to make this business idea a reality.

Property Loans are generally issued on the basis of collateral. In most cases, the asset that you are purchasing serves as the collateral. Though this can make it easier to secure the loan, there are some risks involved. Namely, if you fail to repay the loan, the lender can take the asset away from you.

Due to the nature of the secured loan, property loans can be issued with lower interest rates. As of 2023, property loan interest rates start around 6.7% for a 30-year fixed rate mortgage.


In addition to purchasing land or a home for your own personal use, you can also acquire property for business or entrepreneurial endeavors. With a commercial mortgage, you can secure the funding for the purchase of commercial property including: office buildings, shopping malls, warehouses, apartment buildings and other commercial retail spaces.

To secure better interest rates, consider an owner-occupied commercial property loan. This is a situation where you use the commercial property as a primary residence and off-set the costs of the loan. Another idea for a more affordable loan is an FHA loan– which you can be eligible for if you plan to use the commercial space for a housing development.

COMMERCIAL PROPERTY LOAN - photo graphics man writing on tablet apartment building modules


Getting a loan for land purchase is an entirely different process than acquring traditional commercial property loan. When it comes to financing a land purchase, land loan lenders will often have stricter requirements. For one, a land loan is unsecured as there is no asset that can be used as collateral if you fail to repay the loan.

Because land loans are seen as a riskier option for lenders, you may need to work on your credentials before you apply. Furthermore, land loan interest rates are higher than other kinds of property loans due to the liabilities incurred by the lender.

When it comes to securing a land loan, you will typically need to have a higher credit score (700+). Moreover, a loan for land purchase will typically require some form of down payment.

When it comes to land loans, there are also a number of hurdles you may need to overcome. For example, it will be easier to secure the loan if the lot you intend to purchase is a ready-to-build lot. Depending on the land use restrictions and local zoning regulations, lenders may be unable to provide funding.

LAND LOAN - photo graphics land marked as square house location icon


If the property search is not going well, it may be time to consider building a home from scratch. House building loans (and general construction loans) are issued under different time-frames and eligibility requirements than a commercial property mortgage. Construction loans are considered short-term loans (1 year max) while traditional mortgages are usually issued over a longer period of time. Construction loans can help cover the cost of labor, materials, and permits. There are also renovation loans available which can help cover the costs of home maintenance or any form of renovation project for an already built home.

A loan for house construction will generally charge higher interest rates, and require that you pay interest monthly for the duration of the loan. Once the house construction is completed, you will be required to pay back the loan in full.

However, there are other kinds of construction loans that can convert to a permanent mortgage once the house is built. This is known as a construction to permanent loan and is based on the projected value of the house. Once the home is built, the construction transitions into a traditional mortgage. This is a simple and cost-efficient option, as it involves only one round of closing fees, applications and paperwork.

HOUSE BUILDING LOAN -photo graphics hand shake house module


PROPERTY MORTGAGE INFO - photo graphics house module pie graph stack of coins on cubes magnifying glass

There are numerous kinds of investment properties including short term rentals, house hacking, long term rentals (buy-to-let) and house-flipping renovation projects. With an investment property, you purchase the land, lot or property with the intention to generate income or make money via appreciation. Any real estate asset that is not your primary residence can be considered an investment property.

Moreover, there are also ways to use your primary home as a form of income. For example, if you have an extra bedroom or a guest house, you can rent it out to help make some extra money or to pay your mortgage. This is known as house-hacking.


If you are planning to purchase a home for the purpose of renting it out, be aware that rental property loans have stricter requirements than typical mortgages. Rental property loans often require that you put a minimum of a 15% down payment.

Rental property mortgage rates are generally 0.50%-0.875% higher than traditional mortgage rates.

RENTAL PROPERTY LOANS - photo graphics two person writing on tablet house module


In addition to renting out residential spaces as a form of income, there is also ample opportunity in commercial real estate acquisitions. When it comes to commercial real estate finance, there are many ways to generate income from businesses, hotels, malls, shops, offices, factories, warehouses and so on.

There are numerous loans and financial options available for purchasing various types of commercial real estate. For one, you can use the property equity of your commercial acquisition to take out a line of credit. In addition to lines of credit, there are also bridge loans, FHA loans, long term business loans and SBA loans available.

COMMERCIAL REAL ESTATE LOANS & EQUITY - photo graphics man holding phone and paper clip standing next to skyscrapers


HOW DO COMMERCIAL LOANS DIFFER FROM TRADITIONAL LOANS? - photo graphics couple singing documents at table

Commercial real estate loans are slightly different from your average loan. In general, commercial real estate loans are issued for shorter terms (think 5-20 years). Furthermore, commercial real estate loans will have lower loan-to-value ratios (around 65-80%). The interest rate to buy a house will generally be lower than the interest rate to buy a commercial property. Additionally, commercial loans will require a higher down payment.

IS AN INVESTMENT LOAN RIGHT FOR YOU? - photo graphics man holding magnifying glass stacking coins house module

Before you sign any contracts, be sure to do a thorough calculation of this financial burden. Calculating house payments is an essential part of the loan application process. Use our mortgage calculator so that you can estimate your monthly payments. When securing a loan for property, research all potential liabilities and advantages of this investment. Consider expenses like property taxes, insurance, maintenance as well as potential profit opportunities like maximum rental income and appreciation.

There are numerous advantages of an investment property loan. For one, they can be approved faster than other kinds of loans. However, they can be harder to qualify for. Additionally, investment property interest rates can be higher than traditional mortgage interest rates.

A LOAN FOR INVESTMENT PROPERTY - photo graphics woman pointing at board with loancosulting logo on it keys house module loan contracts

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