If you are thinking of buying a commercial property, then do a proper analysis of the expenses involved in the deal. There are many expenses involved which come to the surface afterward. You have to bear the loan interest, notional interest, and also pay taxes for the property. See the mentioned slideshow to know more about the costs involved in owning a commercial property.

1. WHAT ARE THE
COSTS INVOLVED
IN OWNING
A COMMERCIAL
PROPERTY

2. Most of the time
commercial property
buyers consider it as a
single expense that is the
purchase price of the
property.

3. However, if one truly analyzes
the situation, commercial
property ownership consists
of several expenses.

4. Generally, people do not
pay any heed to these
costs involved in owning a
commercial property and
are surprised at the last
moment.

5. Here are the expenses
that arise when you buy a
commercial property.

6. INTEREST PAID

7. Most of the commercial
properties that are
purchased today are
bought using borrowed
money by keeping some
asset as a mortgage.

8. Whenever there is a
mortgage there are
mortgage payments and
these mortgage payments
also include an interest
component.

9. Moreover, the schedule of
payments is designed in
such a way that banks
collect all the interest first
and then collect principal
outstanding.

10. Thus, if these expenses
are capitalized that is
added to the value of
your property, then the
amount you pay for the
property is significantly
higher.

11. NOTIONAL
INTEREST

12. Besides the interest
paid, which is an out of
pocket expense for the
owners, there is also a
notional interest
involved in commercial
properties investing.

13. Most of the real estate
investments require the
investor to put a down
payment on the property
and this payment is 10% to
15% of the cost of the
property.

14. Experts opine that
there is an opportunity
cost in making this
payment because if the
money was not used for
the down payment,
then it would be
earning interest in a
bank.

15. Consequently, when it
is used to make a down
payment, it earns no
interest.

16. PROPERTY TAXES

17. When you are buying real
estate property, you agree
to make continuous
payments to the
government every year.

18. These payments are
known as property taxes
and every government
collects these taxes.

19. Therefore, these taxes
contribute significantly to
the cost of commercial
property ownership and
these costs are adjusted in
value over time.

20. Furthermore, these
costs rise with inflation
at the same rate and
while thinking to buy a
commercial property,
you must take all these
costs into account.

21. THANK YOU
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