All Topics / Commercial Property / Student Accomdation!

Viewing 13 posts - 1 through 13 (of 13 total)
  • Profile photo of dust27dust27
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    @dust27
    Join Date: 2011
    Post Count: 3

    Hi, i have given 10% deposite alreayd for a student accodmation located in melboune, im having so many problem getting a loan for this becasue its 25 squ meters only- even my broker couldnt help me!!! any lenders im -thinking commerical now that could HELP!!!!

    Profile photo of BC MelbourneBC Melbourne
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    @bc-melbourne
    Join Date: 2011
    Post Count: 2

    I think commercial requires more equity or deposit. I would like to know myself as they have good rent return.

    Profile photo of dust27dust27
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    @dust27
    Join Date: 2011
    Post Count: 3

    I have just changed broker who deals with small/student accomdation all the time YA! last wednesday . still in the process of finding lender but it's looking possitve.

    From what the broker is telling me, if i have 400k plus in equity then it's possible to borrow as a standard loan with LVR at 75%.
    If i have less then 400k- then it be a commerical loan, LVR at 60% and rate is 9.5%

    Profile photo of michaelandre70michaelandre70
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    @michaelandre70
    Join Date: 2009
    Post Count: 34

    You will have a time time finding it i assume. Try to ask th e people those live nearby, they might come in handy since they faced this problem earlier…

    Profile photo of dust27dust27
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    @dust27
    Join Date: 2011
    Post Count: 3

    Sorry for the long delay in reply….been busy trying to get this deal through -and yes we settle TOMRROW! YA! finally…

    The broker was quick and found us the lender we required. LVR at 80% and rate of 7.6% with a international bank HSBC.

    And yes i did try to speak to the ppl next door- but they were all tenants/student so had no idea..><

    Profile photo of DerekDerek
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    @derek
    Join Date: 2004
    Post Count: 3,544

    This is one reason I tend to steer away from specialised property such as student accommodation.

    While I do appreciate they can be nice little cashflow earners consider the difficulties you have had getting finance – the same issues will probably apply to any buyers in the future should you elect to sell the property.  Finance difficulties can restrain the performance of the property from a resale perspective.

    Having said that I do hope it works out well for you.

    Profile photo of Mick CMick C
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    @shape
    Join Date: 2010
    Post Count: 1,099

    Dust27- your welcome and thanks for the feedback/ testimonial on our company website

    Hope to finance your next adventure!

    Cheers

    Mick C | Shape Home Loans
    http://www.shapehomeloans.com.au/
    Email Me | Phone Me

    Same Banks. Better Rates. Served With a Passion.

    Profile photo of kapilvkapilv
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    @kapilv
    Join Date: 2011
    Post Count: 3

    Hi guys! I am new so i want to ask why bank does not provide finance to student accommodation actually they need the loan and it should be supported by bank. is there any legal issue in this matter that  bank consider to be risky. 

    Profile photo of Mick CMick C
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    @shape
    Join Date: 2010
    Post Count: 1,099

    Kapilv WELCOME!

    I have argued in length with the banks and the bank’s underwriter and the LMI provider about this same issue! sigh….
    Here is their argument…which mind you, does make sense; but as you can read later on THEY have created this problem!

    1. Student accommodation influx in rent and can not be supported- meaning during certain season and month the demand for student accommodation is less ( ie during x-mas when all the students goes back home etc..)
    2. Student accommodation limits the type of use …ie can NOT be rented to NON-students and can NOT be used on the FHOG ( ie can not occupied the place UNLESS your a student)
    3. Student accommodation are normally under 50 squ meters,

    What does this mean? this mean it’s Hardier to SELL these places if the bank had to foreclose a loan! and they will be forced to sell under the original price.

    I finance plenty of Student accommodation, the most common pitt falls are FHO and investors who wants to buy this investment at a 90% LVR ( only possible if you have equity in any another home- PPOR or IP)

    End of the day, it;s not “hard” to get finance for Student accommodation… it just requires us broker to present the information about a client in a different and creative way and making sure we ask the right lenders.

    Regards
    Michael

    Mick C | Shape Home Loans
    http://www.shapehomeloans.com.au/
    Email Me | Phone Me

    Same Banks. Better Rates. Served With a Passion.

    Profile photo of kapilvkapilv
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    @kapilv
    Join Date: 2011
    Post Count: 3

    Oh God so much legal headaches are there for students. thanks a lot to you for giving welcome and for posting a nice informative post.

    Profile photo of angelinsydneyangelinsydney
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    @angelinsydney
    Join Date: 2011
    Post Count: 270

    Hi Kapilv,

    I sensed you were a little confused, I could be wrong though.  You may have been thinking we are discussing loans for students.  That was not the case. 

    The issue here was obtaining a mortgage for a specialised property called "student accommodation."  In other words, you don't have to be a student to find it difficult to get the home loan, student or not, if you're investing in a student accommodation under 50 sqm, higher LVR is required.

    I hope this cleared things up for you.

    Angel

    Profile photo of Mick CMick C
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    @shape
    Join Date: 2010
    Post Count: 1,099
    angelinsydney wrote:
    if you're investing in a student accommodation under 50 sqm, higher LVR is required.

    I hope this cleared things up for you.

    Angel

    Angel meant to write a “lower” LVR :)

    Regards
    Michael

    Mick C | Shape Home Loans
    http://www.shapehomeloans.com.au/
    Email Me | Phone Me

    Same Banks. Better Rates. Served With a Passion.

    Profile photo of angelinsydneyangelinsydney
    Participant
    @angelinsydney
    Join Date: 2011
    Post Count: 270

    Hi Michael,

    Lol 

    Elementary… Mr Watson.

    How embarrassing.

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