Hi, can anybody help.Wanting to purchase 200 acres with a friend.We want to build two houses on the one title.Can this be done and what are our options?
Land is in country Vic.
Think you will struggle to finance such a property at a high lvr so unless you have good cash savings or access to other equity think this will be an issue.
Richard Taylor | Australia's leading private lender
How do you come to that conclusion?
Paul – what LVR arr you looking 4.
Is it a farm? Or non farming land?
Paul R wrote:How do you come to that conclusion?size!
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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I think what the guys probably mean is that they are guessing that since 200 acres is a lot, the pricetag is probably big. Let's call the pricetag 3 million. In order to get a loan, you have to come up with the deposit and stamp duty money (eg 20% deposit plus stamp duty which is normally around 5% of the property cost) plus also you have to be able to "service" the loan, which means that there has to be enough cash left over out of your salary, after you pay for your groceries and so on, to pay the loan off. The stockstandard person would be unable to stump up the cash for a massive property.
Jacqui Middleton | Middleton Buyers Advocates
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Its not really the price at issue but the size of the property. Depending on whether it is income producing etc you may need 40 to 50% deposit.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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Oh wow. There goes my dreams of owning a big chunk of land then!
Jacqui Middleton | Middleton Buyers Advocates
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Yes price has very little do with it but income producing land is not that attractive to the majority of lenders.
Richard Taylor | Australia's leading private lender
We don’t know if the land is income producing or not…
Vic is not too big. Depending on the use of the land, where they bank and if they have have other property you could get 80%.
For example. If they were in the top risk grade, had other property or assets, good income etc banks will bend if land size is the only exception to policy. If the deal was not strong in all areas it would be reduced to say 60% – as Terry said above.
Income producing would mean it’s an agri business deal. Not retail.
You will also need to contact the local council to find out whether you can build two houses on the one title. I live in a rural "watershed" area in SA and the local council won't allow more than one dwelling on each title, no matter how big the land is.
Cheers
K
JacM wrote:I think what the guys probably mean is that they are guessing that since 200 acres is a lot, the pricetag is probably big. Let's call the pricetag 3 million. In order to get a loan, you have to come up with the deposit and stamp duty money (eg 20% deposit plus stamp duty which is normally around 5% of the property cost) plus also you have to be able to "service" the loan, which means that there has to be enough cash left over out of your salary, after you pay for your groceries and so on, to pay the loan off. The stockstandard person would be unable to stump up the cash for a massive property.Thanks for replies.The land I’m considering is priced @ $1000 per acre and classed as “farming”.I plan to borrow 80%.
I do have another property and finance shouldn’t be a problem.Was wanting to find out more about different scenarios Re: two houses on one title. Cheers PaulPaul R wrote:JacM wrote:I think what the guys probably mean is that they are guessing that since 200 acres is a lot, the pricetag is probably big. Let's call the pricetag 3 million. In order to get a loan, you have to come up with the deposit and stamp duty money (eg 20% deposit plus stamp duty which is normally around 5% of the property cost) plus also you have to be able to "service" the loan, which means that there has to be enough cash left over out of your salary, after you pay for your groceries and so on, to pay the loan off. The stockstandard person would be unable to stump up the cash for a massive property.Thanks for replies.The land I’m considering is priced @ $1000 per acre and classed as “farming”.I plan to borrow 80%.
I do have another property and finance shouldn’t be a problem.Was wanting to find out more about different scenarios Re: two houses on one title. Cheers PaulThe property would be used purely as a holiday retreat and maybe sold with a dwelling in the future
Cheers Paul.Sound nice. I dream of owning 100+ acres one day!
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Me Too!
The deposit issue hadn't occured to me though. I may have to do my homework on how this works for QLD. If I have to have a 50% deposit .. It's going to be a long wait.
Depends how fussy you are:
http://www.realestate.com.au/property-residential+land-qld-blackall-2780255
Paul which bank will lend you 80% on farm land , I have never heard of any bank lending more than 65 % on farm land and trhat is if you have lots of other assets and a good income, except perhaps RFC but being a holiday home I guess that wont fit their criteria. Wont you also have to pay commercial rates of interest of 9-10%. You will also have maintaince, issues with weeds and vermin and need plant and equipment such as sprayers, tractor, mower, ploughs.
Thanks for the link JJ7.. but I think in that situation they are selling a lease, the use of the land rather than ownership of the land. and yes I am fussy, like everyone else I want the dream block for next to nothing.
They tell me if I work hard enough and focus positively enough……..
crusty wrote:Paul which bank will lend you 80% on farm land , I have never heard of any bank lending more than 65 % on farm land and trhat is if you have lots of other assets and a good income, except perhaps RFC but being a holiday home I guess that wont fit their criteria. Wont you also have to pay commercial rates of interest of 9-10%. You will also have maintaince, issues with weeds and vermin and need plant and equipment such as sprayers, tractor, mower, ploughs.CBA treats non income producing rural residential as standard residential up to 50 hectares or 125 acres. I recently did a 25 acre at 90 % LMI capped to 92%.
If the deal is under 1M – no LMI approval (LMI approval is automatic).
If the zone is rural and it has a house – it is treated as rural residential.
Banker
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