Hi, New member from Melbourne

Hello all,

First time poster, long time reader of the wealth of information from all the friendly peeps on this forum. Been dabbling in shares for the last few years, but ready to take the next step and looking to buy with my partner a PPOR. Then move forward with property investment and other wealth building opportunities, including debt recycling.

A PPOR property we've been looking at appears to be a standard 2 bed house that has been previously used as a residence, but the zoning is commercial 1. I had a chat to the local council planning dept and they mentioned if it was previously residential use, they would allow continued use.

Would the zoning factor affect the loan type (res vs commercial loan), valuations, and other ongoing costs (rates, water)? Just trying to decide if it is a bit risky

Thanks

A

 

Welcome to the forum!

It will most likely affect finance - resi lenders won't like the fact it's commercial zoned.

Also bear in mind that your buyer will face the same issues if/when you sell, so your buyer pool will be limited.

 

Thanks @Jess Peletier ! The finance issues would be my biggest worry. I assume this would entail a lower LVR and higher interest rates...

 

Yep It would be wise to assume you'd be looking at commercial finance.

 

Welcome to PC @Alby , it is a tricky situation there. What are you planning to do with this property in the future?

 

If commercial then 70% lvr and rates in the high 5's low 6's.

Get resi val done via a broker and see what it says about zoning and general commentry as a resi lender may do it depending on the outcome.

 

Thanks @Eric Wu , the plan is to possibly turn it into an investment property in the future, and/or use any increase in equity for further investments in shares/property.

Thanks @Colin Rice , I'll ask my broker about having a resi val done on the property. In the Sect 32, the council rates notice is at the residential rate classification.

 

Welcome @Alby