All Topics / Help Needed! / Is this property commercial or residential?

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  • Profile photo of kateej03kateej03
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    @kateej03
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    January 19, 2013 - 11:45 am

    Hi Everyone,

    I'm looking at a property at the moment that is zoned residential and is a house with an extension that has approval to be used as a daycare and has a lease in place for that purpose. In the banks eyes do you know if they would consider this residential or commercial? It is still a house in a residential area that could easily be rented as a house.

    Thanks,

    Kate

    Profile photo of RPIRPI
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    @rpi
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    January 19, 2013 - 12:17 pm

    From a Planning Law Perspective, a premises is defined by its use in most states.  

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    Profile photo of Alistair PerryAlistair Perry
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    January 19, 2013 - 9:30 pm

    Hi Kate, 

    banks will most likely make their determination based on the use, but sometimes properties like this get through as residential if the lender doesn't order a full valuation. If it was vacant possession the lender would be able to accept it as a residential property if they discounted the cost of converting it back into a house. Unless you were wanting more than 80% it won't effect what you can get in terms of rate or lvr much anyway.

    Profile photo of TheFinanceShopTheFinanceShop
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    January 20, 2013 - 1:42 am

    It depends on how the application is structured. If you want to use it as a house then it needs to be submitted that way. For example, you cannot use the lease of day care as part of the servicing. 

    Regards

    Shahin

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    Profile photo of Jamie MooreJamie Moore
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    January 20, 2013 - 7:24 am

    Hi Kate

    If it's zoned residential and can be treated in that way – I would have thought it would be possible to get a lender to accept it on that basis as well.

    As mentioned above though, if a full val could be avoided then that might get around the issue.

    Cheers

    Jamie

    Jamie Moore | Pass Go Home Loans Pty Ltd
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    Profile photo of kateej03kateej03
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    @kateej03
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    January 21, 2013 - 6:43 am

    Thanks everyone for your input – helpful as usual.

    Jamie – I have just sent you an email :)

    Profile photo of Jamie MooreJamie Moore
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    January 21, 2013 - 11:03 am

    Cheers Kate – will get back to you first thing tomorrow :-)

    Talk soon

    Jamie

    Jamie Moore | Pass Go Home Loans Pty Ltd
    http://www.passgo.com.au
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    Mortgage Broker assisting clients Australia wide Email: [email protected]

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