All Topics / Help Needed! / Borrowing Capacity for Airbnb Side Hustle

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  • Profile photo of eskieski
    Join Date: 2004
    Post Count: 9

    Hi All,

    I’m looking at buying a property from the family and putting up some cottages for an airbnb, online calcs say I have borrowing capacity but an initial chat with a finance adviser seems to think it will be difficult, details:

    My income: ~$7600 fortnight gross

    Both loans below with same FI – which I have been told was a bad move..

    Current home loan: $790k
    Home value: $780k (not best buy I just fell in love with it and had to have it)
    Payments: ~$3400 month

    Investment property loan: $210k
    Value: $480k
    Payments ~$1200 month
    Income: $450/wk

    New property Plan
    Value: $450k
    Borrow initial: $300k
    Give $200k to family member and use savings / 100k to build simple cottages
    Then once up and running, refinance to give family member remaining $250k
    It has had rental income close to $300/wk
    I’m planning on putting 2 cottages on it which will rent for around $200 a night and should get consistent rent for the summer months.

    I want to keep the financing simple and hopefully use this as a leg out of corp life.

    Also do you advise to use mortgage brokers or lend directly? An online finance writer (guess who) seems to advise better to go directly though a FI like ubank.

    Thanks in advance for any advice provided – Go Cats!!!!

    Profile photo of TerrywTerryw
    Join Date: 2001
    Post Count: 16,213

    This won’t be welcome under residential lending.
    Most lenders will not lend for more than 2 on title. Some will, but if they think you will be running a short term rental business they will not include potential rent.
    You will need to consult a broker.

    Will you be buying for $200k or $300k or $450k?
    better speak to a lawyer too, especially if you are planning on buying for less than market value.

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Aust wide)

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