Qard, Sharia Compliance and Commercial Properties
Qard Definition: Taking at its most literal meaning, qard is a lone free from any kind of benefit. In the Islamic financing sense, that means that precautions have been taken to keep it free from riba. Where ijara loans are concerned, this is generally about a mortgage where no interest on the money borrowed is paid. A trust is set up to circumvent any kind of usury that’s more predominant in Western money products. All the definitions of this word stress the fact that the loan involved is interest-free and therefore benevolent.
If you’re thinking about purchasing commercial real estate with sharia compliant products, you’ll need to consider qard as well as some aspects of the property in question. It’s important to plan an enterprise like this carefully. Due diligence needs to be a cornerstone.
We offer a variety of commercial products for investors as well as entrepreneurs looking for owner occupied locations. Follow this link to find the information that you’ll need to buy commercial property and stay sharia compliant.
Because we consider ourselves an informational resource, we’ve put together a few tips for buying one of these commercial properties that involves qard and Islamic financing.
Know the Market
Making the decision to buy commercial real estate is one thing. However, every move needs to be carefully planned and the first of these is deciding where to buy. There are several different factors that you’ll need to consider like local tax rates. The land inventory in different locations will be another one of the deciding benchmarks you need to consider.
There are even a few features you might not think about at first. The supply of skilled labor in any given area should affect your decision.
Put Together the Right Team
Making sure that your budget suits the commercial property you finally decide on is as important as using qard to ensure sharia compliance. We suggest that you use our services and add to your professional team by hiring an accountant. These are the experts that can find any hidden costs in your endeavor.
Remember, making sure that any property you have your eye on is affordable needs to be a priority. Regardless of the Islamic financing product you choose, many aspects of the commercial mortgage will be very similar to the traditional varieties.
Other Issues
There are quite a few different issues that an accountant can help you with including whether the endeavor should be a personal or corporate transaction. Some of the other issues they can help you with include how to break up different assets if you decide to sell the company. Succession planning is another signpost to a successful business that an accountant can help you with.
Getting financing for any kind of commercial real estate purchase isn’t always easy. It pays to preplan and take the time to do proper due diligence. There are quite a few different areas including qard to look into.