在澳大利亚 I am interested to find other peoples ideas on my present situation regarding a renewal of a lease for our PPOR in Cairns. The house has been continually leased, through a PM, to the same tenants while we have been living overseas. The lease is this a dumb strategy? Buy 20+ or as many properties in average+ areas which are cashflow neutral or just positive with low to average vacancy rates, or as many as i can afford Save as much $$$ for a buffer Wait 10 years, then on the assum
I have a friend who purchase a studio (more like student accomodation) off the plan in Carlton (Melb) in 2005 due to settle in Nov/Dec this year.
There are 8 floors, and each floor has 9 studio/bedsit rooms and a common lounge. The bedsits are quite small about 7m by 3m - so about 21 metres squared.
She has just started looking for finance, and has been told the maximum LVR she would be able to lend against it is about 60% - maybe 70% if she is lucky.
She needs an 80% lend to complete the purchase.
Any thoughts on this, has anyone ever bought one of these things before, how did you go with the finance and what LVR were you able to get.
In hindsight this is something she should have considered at the start, but hindsight is a beatiful thing, she is in a bit of a bind at the moment - any pointers.
Your friend may be able to get the finance from a non-traditional lender - at a much higher interest rate.
I can remember that when we were looking in the city, no traditional lenders would go over 80% or so, but there were some non traditional lenders who would - charged about 1% over interest rate banks charge - and I believe they would do studios as well. We decided to go further out to get the easy finance, so I don't know much about them besides what they offer, but I can probably look back through me emails to give you a contact if she's desperate.
Traditionally, studios, serviced apartments and student accommodation are for buyers with equity in another property.
It is quite difficult to finance anything less than 40 square metres and few lenders are interested in studios or any dwellings without a separate bedroom.
Really, if your friend doesn't have equity in another property then she had better start saving. A contract is a contract and while she may stand a chance if she is going to live in it, for an investment then even 60%LVR may be hard to find.
Probably a great investment but lenders don't usually find them to be acceptable securities.
Christine is absolutely right.
I don't see a big chance to get an LVR > 60% for an investment; however, as owner occupied she may be able to get 80% LVR.
Are these the same studios that are leased to the YMCA for 10 years?
Have done one in the previous release and doing another Oct/Nov.
Placing them with a boutique balance sheet funder out of BNE, 80% LVR, 8.7%
Is a case by case lend though.
Just refinanced mine with St George on a lo docs loan, studio 36m2 internal with 12m2 courtyard in Sydney. Interest only to 80% LVR.
Yes StG will do studio's no risk. And they are doing one of the buildings in the said complex. However I'll bet that Willy's friends isn't in that complex?
The main issue with these studio's is the lease it is for ten years to the YMCA, and the banks don't like that because if they have to realise the security then there is an extremely small market that can / will buy the property.
Another problem here is you cannot permantley occupy the property as an Owner Occupier.
Mortgage insurers don't want to know of them so that takes out all the securitised lenders, leaving only balance sheet funders. ANd there ain't many of them...
PS, if you are refi'ng with STG, you know they can give you 15 years IO )
Is this the D01 apartments on Bouverie St in Carlton? I actually live next door to them. They are v. small but the common area looks good and the build quality is good so far. LU Simon is doing the construction. Looks about 2 months out from completion. Also nice views of Lincoln Sq park and a cafe on the ground floor.
I hope your friend has not paid too much. In another nearby student accom block (Global House) some owners have attempted to flip after purchasing at $165k but are only advertising at around $120-$130k.
I think for student accommodation, you would generally get a far better price from an existing block rather than off the plan, simply because there are so many available for sale just in Carlton. In College Square, there are always around 50 - 60 advertised at any time.
Also, I understand these apartments are not leased through YMCA (i.e. College Square). There would be another company marketing the rental.
Cheers - Dave
Yes Dave, it is the D1 apartments in Carlton. She signed a contract for $207,000 - which sounds xxxyyy.
Her first foray into the investment market, she was sold one of these things by a slick salesman, without doing the proper due diligence, and getting educated first.
I think they are about 21 metres squared, as you mentioned pretty small.
ANZ have said they would consider it at 60% and Bankwest have said they would consider it at 65% - but she needs more like 80%.
Ed, if it is not too much to ask - who is the balanced sheet lender in BNE you were referring to???
I am thinking she should be getting some legal advice as to whether she can get out of the contract or not.
If a slick sales pitch was involved there may be some avenue - especially if assurances as to capital growth were given.
willy1111 said: ↑
ANZ have said they would consider it at 60% and Bankwest have said they would consider it at 65% - but she needs more like 80%.Hi Tim,
TimClick to expand...
Are these thru brokers?
Also, any chance of her getting loans from other sources - eg personal loans, family, friends, etc....
Has she already paid a deposit? If so, how much?