What’s Your Lender Looking For?
What’s your lender looking for? Real Estate attributes are fundamental. Apart from your character, capital, and capacity, your lender will focus on ideal real estate attributes. Does your property offer them?
Real Estate Attributes
From your lender’s perspective, there are ideal physical and locational real estate attributes. Having these features present for your property will maximize your ability to attract and retain quality tenants. And this will maximize your ability to generate and maintain high occupancy and income levels.
What are the ideal attributes for a property? Perhaps as importantly, what can one do if the property doesn’t have them? The reality is that most properties do not have all of the features one would consider ideal. That’s okay! Knowing what the features are, gives you the ability to have that discussion with your lender. You have a strategy to maximize the attractiveness of your property, and you know why your property is an ideal low risk lending opportunity! Awareness of the deficiencies your property might have, and the strategies you are using to mitigate these deficiencies, demonstrates good real estate acumen.
Speak Your Lender’s Language
For example, you may have a retail property on a busy commercial route, but have little or no parking. Located a block away is a public transit station, which results in a high level of pedestrian traffic at this location, mitigating the need for parking.
Similarly, your industrial building may lack a high ceiling warehouse component. You’ve been successful however at attracting tenants who need clean assembly type space. They have no need for storage, as would a more traditional industrial building tenant. A high ceiling height in the warehouse is of no use to them.
Now you’re speaking your lender’s language. Focus on what matters to your lender. You understand ideal real estate attributes. You know why they are important for your lender, and how you can advocate for your particular property.
In upcoming posts, we’ll explore ideal real estate attributes for specific asset classes in greater detail.