What is Commercial Buy-to-Let?

Buying a property to let it out to one or more businesses is referred to as a commercial buy-to-let mortgage. Many investors find commercial property attractive as not only will you benefit from a rise in the property's value over time, but you can also expect to generate income from renting the building out. Additionally, commercial properties usually have longer lease terms than residential properties, giving the investor a better sense of security.

How to apply for a commercial buy-to-let mortgage?

For landlords who wish to rent their commercial properties to businesses, a commercial buy-to-let mortgage is a must. Most lenders will likely include the following steps in handling mortgage applications:

  • Credit history check, both personal and business.
  • Your affordability check: how much rental income the property will likely generate
  • Any existing mortgages/loans you might have.

FAQ

Do I qualify for a Commercial Buy to Let Mortgage?

A property investor must meet strict criteria in order to qualify for a loan from any lender. Lenders use a number of eligibility criteria to determine whether to lend, including evaluations of the property type, demand, tenant, and lease term. Investors with experience who can demonstrate they own and manage other commercial investment properties will be more likely to get loans from lenders. The reason is that holding a commercial investment property is typically more complicated than owning a residential property.

How much deposit do I need for a Commercial Buy to Let?

Typically, a commercial buy to let mortgage deposit ranges between 25% and 50% of the total purchase price. Investors often aim to pay the least amount as a deposit, so it's well worth shopping around to see what lenders can offer.

How quickly can I get a Commercial Buy to Let?

As you might expect, arranging a commercial buy to let mortgage can be a complex process. You'll likely be looking at a time frame of 4 to 8 weeks if you, your lender, and your solicitor work together as quickly and efficiently as possible. However, mortgages that are more complex may take two or more months. If you need to close the loan in less than four weeks, you will need a bridging loan.