Finance - Build to Rent

Discussion in 'Loans & Mortgage Brokers' started by Kay Dubya, 28th Oct, 2017.

Join Australia's most dynamic and respected property investment community
Tags:
  1. Kay Dubya

    Kay Dubya New Member

    Joined:
    28th Oct, 2017
    Posts:
    3
    Location:
    Brisbane
    Hi all,

    Just needing some general tips on financing a build to rent development. LVR should be pretty strong (70%+) and by all indications the potential rental income will be solid too. I've always just done construction loans before so I don't know if there's any differences in how banks assess these deals and whether there are any particular issues/tips or even specific lenders I should know about.

    Cheers.
     
  2. shorty

    shorty Well-Known Member

    Joined:
    24th Jun, 2015
    Posts:
    1,207
    Location:
    straya
    Single property / duplex subdivision / multi unit development?
     
  3. Kay Dubya

    Kay Dubya New Member

    Joined:
    28th Oct, 2017
    Posts:
    3
    Location:
    Brisbane
    5 x 4brm 3 bath 2 garage "town homes".
     
  4. Peter_Tersteeg

    Peter_Tersteeg Mortgage Broker Business Member

    Joined:
    18th Jun, 2015
    Posts:
    8,130
    Location:
    03 9877 3000
    Build to rent is simply an construction loan for an investment property, rather than a construction loan for an owner occupied property. It's really no big deal at all, I'm not sure why there's a perception that it's anything special?
     
    jim1964 likes this.
  5. D.T.

    D.T. Specialist Property Manager Business Member

    Joined:
    3rd Jun, 2015
    Posts:
    9,189
    Location:
    Adelaide and Gold Coast
    Most banks don't like doing more than 3, it'll limit your choices. Are they joined as well?

    Make sure you find a broker who has done this before.
     
  6. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

    Joined:
    14th Jun, 2015
    Posts:
    10,599
    Location:
    Gold Coast (Australia Wide)
    Just outside of most resi lending parameters.

    Still very doable, just not as predictable and largely will be higher rates fees and charges, but with some potential benefit if all are being sold
    ta
    rolf
     
  7. Kay Dubya

    Kay Dubya New Member

    Joined:
    28th Oct, 2017
    Posts:
    3
    Location:
    Brisbane
    Thanks for the input. I was expecting that, if I wasn't selling, the finance might be a bit different. I got my first offer in this afternoon and it's a bit poor - 65% LVR, 8.99%. Need to keep looking!
     
  8. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

    Joined:
    14th Jun, 2015
    Posts:
    10,599
    Location:
    Gold Coast (Australia Wide)
    Shoul be able to do better, BUT without any data, its hard to gauge

    ta

    rolf
     
  9. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

    Joined:
    18th Jun, 2015
    Posts:
    41,667
    Location:
    Australia wide
    Under residential policy.