new generation boarding construction funding

Discussion in 'Property Finance' started by hhd88b, 14th Nov, 2018.

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  1. hhd88b

    hhd88b Member

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    Hi All
    I am looking for funding option to develop a boarding house with 30+ self contained studios . my current serviceability is very tight, will the bank take future rent on those studios in serviceability calculation and how does it work? much appreciate for any advise
    thanks
     
  2. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    im assuming this will be a build and hold, and the studios will be all on ONE title ?

    ta
    rolf
     
  3. Shahin_Afarin

    Shahin_Afarin Residential and Commercial Broker Business Member

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    Potentially yes but the biggest issue is going to be a) the experience side of the proposal and b) the LVR. Lack of comparable sales depending on the area may be an issue and lenders will lender sub 50% depending on the strength of the application.

    Commercial development finance is quite tough but building boarding homes is even tougher.

    Neither myself or the lender would be particularly comfortable with sole/majority reliance on the boarding home income for servicing.

    Its going to come down to the numbers - some think they can service but don't and some even think they can't and they can.
     
  4. hhd88b

    hhd88b Member

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    Thank you for your input, yes, the development is for build to rent/hold, all studios in one title.