Benefits of Owner Occupied Commercial Real Estate in Texas
May 12, 2023
When your business is ready to expand or move into new facilities, it’s important to consider your short-term and long-term business needs. Although you could quickly move to a new rented commercial property, pursuing owner-occupied commercial real estate in Texas may be the more strategic choice for your company.
The key is understanding your financing options to support the big move to your own commercial real estate property.
Discover the various benefits that come from choosing owner occupied commercial real estate financing, the types of businesses that can utilize this financing option, and how Texas Gulf Bank can help you tap into the benefits of owner occupied commercial real estate.
Why Choose Owner-Occupied Commercial Real Estate?
Renting a commercial space may be prudent if your business is new and still building revenue. But, as your company grows, it may make more sense to invest in your own company by becoming a commercial real estate owner.
There are several distinct benefits of owner occupied commercial real estate.
Improved Cash Flow
When you purchase your own business property, you gain the ability to have a fixed, stable monthly cost for your loan rather than monthly rent payments that could be increased at any time. No more negotiating leases with the commercial property manager.
As an established business with steady revenue, your business may be able to qualify for owner occupied loans with fixed interest rates and monthly payments lower than your current rent payments.
Additional Revenue Opportunities
An owner-occupied commercial property requires your business to occupy at least 51% of the property as the primary tenant. The remainder can be rented out to other businesses to generate rental income and create greater cash flow.
Having a revenue stream from rental income potentially makes your company’s current working capital available for other business expenses.
Investing In Your Own Company
Choosing owner occupied commercial real estate could strengthen your own business by building equity in your property rather than paying a landlord. This effort may improve your ability to secure future purchases or loans, as well as gain the ability to sell the property and cash out your equity if needed.
Property Flexibility
Moving from a commercial rental space to an owner-occupied commercial property gives your business the flexibility to use your space as you see fit. You have the freedom to select which areas to occupy for your own business, which businesses rent out your remaining property, and when to make building renovations or property expansions.
When your company is ready to move to a better space or expand into larger facilities, an owner occupied commercial property may be the best possible choice for the long-term success of your company.
Ideal Businesses for Owner Occupied Commercial Properties
Pursuing owner-occupied commercial real estate can be a wise investment decision for many different types of businesses and industries. Some of the most common businesses to choose this type of commercial property include:
- Service providers: Doctor or dental offices, law offices, staffing firms, marketing agencies, and title companies.
- Industrial companies: Manufacturing, warehouses, and distribution centers.
Start the Application Process Today
At Texas Gulf Bank, we proudly offer owner occupied commercial real estate lending solutions to businesses throughout the region. We work closely with local business owners to help make the transition from renters to property owners.
The application process begins with an initial assessment to understand your business, discuss your specific loan needs, evaluate current financial data, and consider risk factors to determine loan viability.
For example, established businesses with steady revenue streams and ample cash flow to make the required down payment will be more likely to qualify for conventional owner occupied commercial loans. However, newer businesses may be better suited for SBA lending options through Texas Gulf Bank that require less money down.
Potential borrowers will need to submit the following financial documentation as part of the application process including but not limited to:
- Completed loan application
- 3 years of business and personal tax returns
- 3 years of income statements
- Year-to-date balance sheet
- Historical cash flow
- Profitability statement that supports loan repayment
Our experienced local lending officers will review all required documents and submit your application for final in-house approval. If approved for financing, you may experience a streamlined funding process so you can move forward with your property plans.
Get an Owner Occupied Commercial Loan From Texas Gulf Bank
Texas Gulf Bank has 100+ years of experience providing strategic financing solutions to businesses across the Texas Gulf Coast region. We truly value building relationships with the businesses and industries that make up the fabric of our market, and we offer a variety of loan options and bank services to strengthen businesses.
Contact our loan officers today to discuss the benefits of owner occupied commercial real estate and how to apply for conventional or SBA loan options for your business. Complete our contact form to get in touch with our team.
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