I came across some stata titled apartments for sale in the CBD. This interesting thing was that all the outgoings are paid by the the management company with a guaranteed rental income.
These are typically one or two bedroom apartments. The price is not dictated by the the land value but the by the rental return.
I was thinking of this as an entry level in to investing in property.
However when I approached the banks they replied that they would not fianance against this type of property.Has anyone had experience with this type of property before?
Where can I get finance?[worried]Most lenders don’t like serviced apartments because they are looked on as a specialty security, ie not everyones cup of tea. If the bank is left holding the property due to a default by the borrower, they feel that the property may be harder to sell and subsequently revovery for the lender becomes harder. As a consequence their risk is increased and thats why most lender either refuse to lend on them or will do so but at a much lower ratio, normally 60%
Good Luck
Mr Mortgage
[email protected]Think you would get more than 60% LVR (we recently did one at 75%) but i agree with MrM.
Cheers
Richard Taylor
Residential & Commercial Finance Broker.
Licensed Financial Planner. Ph: 07 3720 1888
[email protected]
Looking for life cover – We Guarantee to beat any quote you have in writing.Richard Taylor | Australia's leading private lender
Thanks guys for your replies. I guess waht appeals is the simplicity of the deal. For instance the Manager pays all the outgoings and a guaranteed increased in income of 3% PA. And there is no vacancy risk. Hence the lower return. The down side is that there is nothing I can personally do to the property to make increase its value. Looks like I need to do more homework on the true returns.[blush2]
You must be logged in to reply to this topic. If you don't have an account, you can register here.
