I have one investment property (DHA) that I owe $120000 (worth about $300000); my own home that I owe $146000 (worth $300000) and borrowed $90000 to help my mum buy into an 'over 55' unit. The bank did not have a problem as I had enough equity in my other properties.
My mother has since passed away and I would like to buy her villa outright as an investment. I inherit about $70000 from Mum plus $90000 from the estate to cover the loan.
I am told that banks don't like to lend on these 'niche style' investments but given I need a total of $300000 from the bank for a property worth $400000 who might I approach to request a loan?
I have sought local advice from the estate agent and have been told I would have no problem in renting the villa for $400 a week so my expenses are not unreasonable and I can comfortably cover the loan payments.
There are no 'care or meal facilities' – the villas are really more a community of independent homes.Are there specialised lenders or financial managers who are prepared to lend on these properties? Any help appreciated.
Thanks
Janjan1234 wrote:I have one investment property (DHA) that I owe $120000 (worth about $300000);Line of credit loan against this property at LVR of 80% = 240,000 so borrow 120,000
jan1234 wrote:my own home that I owe $146000 (worth $300000)Line of credit loan against this property at LVR of 80% = 240,000 so borrow 94,000
So if line of credit facilities are ok on both loans then the bank doesn't care if you use it for retirement property purchase
Total funds $120,000 + 94,000 + 70,000 = $284,000
You would need to find $16,000 from somewhere plus stamp duty costs.
Maybe borrow it from other family members or vendor finance.Maximum lvr on an over 55's unit is probably 75% so based on those numbers and as long as everything else being equal it would appear doable.
Richard Taylor | Australia's leading private lender
Hi Jan,
Be careful with “Over 55’s” complexes as an investment.
1. Villages like these are not typically “registered” retirement villages so confirm what structures are in place to restrict entry age.
2. Many villages have strict “owner-occupier” provisions, so check to make sure you can actually rent it out.
3. The performance of your unit as an investment will also be dependent on the competency of the village manager (in the event that there is one) to let and manage your unit.
4. Your rental market is age-restricted – typically that age group will own their own home. If they don’t by that age it is likely that they cant afford $400 per week. Most rental retirement villages have to set their rent in line with the age pension and rent assistance allowance.
Cheers!
Richard
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