When acquiring a real estate asset, financial needs will vary. In most cases, they can be categorized into short and long term needs. A popular and widely used example of the former would have to be alternative property finance.
Such method has been used by many investors to help them in their purchases and deals particularly in terms of short term requirements. As a form of interim financing, bridging loans connect the gap between immediate needs and a permanent yet to be available financing source. We all know that majority of fixed asset financing mediums take time to be made available considering the values concerned. To remove the risks, the drawbacks and the delays, the said method is utilized by many.
Now that we’re into the topic, you may be wondering what immediate and short term requirements would be provided for by bridging loans. Below is a list of some of them.
Research Costs – Finding the asset you need and would want to buy is not as easy as doing your weekly grocery. You have to consider many things and put into account a number of important factors. You’ll have to research too and with all these comes the costs of such activities.
Professional Fees – You will hire several professionals even before you get to close on the property you like such as but are not limited to the following.
- Lawyer: Contracts and titles need expert knowledge. Legal requirements and papers will need a professional to handle them.
- Agent: If you’re not capable of or don’t have the time to go research properties yourself, you’re likely to hire an agent or broker on your behalf.
- Surveyor: Before you buy an asset, you have to get a surveyor to assess and examine it physically, financially and legally.
Security Deposit – This is a part of the selling price that buyers pay the seller to show sincerity of the purchase. This prevents the latter from selling the asset to someone else.
Property Taxes – Depending on the location, value and type of asset you are buying, you are bound to pay taxes for it upon purchase. This is something that you have to prepare for beforehand.
Down Payment – This is the initial payment that the seller requires especially if you’re not paying for the acquisition for full in cash. Without it, you won’t be able to garner the rights to a purchase.
All these and more shall be provided for by alternative property finance companies like, www.alternativebridging.co.uk.
