Dear All,
I am currently interested in buying a retirement village. It will be a +ve Cash Flow After Tax return. The questions is:
1. I contact my lending manager for 100% finance, his answer was I can’t borrow and use this retirement village as a security because it’s hard for the bank to sale it if anything happens. is it true? or it is just one bank?2. I also contact other financial institution but they only lend me 80% of the purchase price eventhough I use other property for the security. is there such financial institution who lend you 100% of the purchase price for retirement village?
Your input please.
Thank you.
Warm Regards
ChanDollars
[Keep going, you’re nearly reach the end of financial freedom]No Chan, I don’t think there is. I have tried (last year) to buy a unit in a retirement village and getting finance is hard. I think you can get a commercial loan, but I think even that won’t give you 80%. 60% more likely.[
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Most people must be buying them from a LOC, I figure.Do a search on this forum on retirement villages or aged care units and you will find some more info as this has been discussed in the past.
Regards!
Celivia,
Thank you for your quick responded. I already did a searches in the forums, but not much have been said about it in regarding 100% finances for retirement village.
May be I have to use my brain a bit more to dig out the solutions.
There is one way that I can buy the retirement village with 100% finance. That is by using 100% of my existing equity with my other IPs. By doing this will hold up too much equity for just one IPs. Therefore, I try to avoid doing this at the moment.
Any other suggestions?
Warm Regards
ChanDollars
[Keep going, you’re nearly reach the end of financial freedom]I agree, for the same reason I didn’t buy this unit – I didn’t want to reduce my equity (LOC) by that much just for one IP. Much better to keep the LOC for deposits on several IPs.[
]SHame though, the units seem a no-worry investment as they are fully managed, also 99.8% occupancy and elderly people make great tenants so I wouldn’t need landlord insurance, just contents.
Well not to worry we just will have to keep searching for something else.[
]Celivia,
Good to see what you are thinking is very similar to mine. At least I am not on my own here.
Still looking…..
Warm Regards
ChanDollars
[Keep going, you’re nearly reach the end of financial freedom]As you have found the only option is to take a 80% loan and source the 20% plus costs from another security.
Cheers,
Simon Macks
Mortgage Broker
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
No unfortunately banks will not lend 100% on retirement villages as they see them as a commercial venture.
I sell pensioner units that are completely freehold and yet banks won’t lend 100% on them. They only lend up to 79% usually which means that the borrower does not have to take out mortgage insurance.Is there any real reason for this? i thought they would be a good investment because of our aging population – there seem to be more and more coming on the market
cheers,
bluecatDo today what you want to do tomorrow
Originally posted by bluecat:Is there any real reason for this? i thought they would be a good investment because of our aging population – there seem to be more and more coming on the market
cheers,
bluecatDo today what you want to do tomorrow
Bluecat,
I agreed with you but the bank don’t see it this way at this stage, may be in the future. Who know?
Warm Regards
ChanDollars
[Keep going, you’re on your way to financial freedom]It would be so much simplier if they saw it our way
[
]cheers,
bluecatDo today what you want to do tomorrow
Just been looking at the retirement thing for the oldies, on resell you lose up to %25 fee (10 years +) Its a sliding scale starting at %4 first year %8% second. + %50 of the capital gains.
so I can see why the banks wont loan you even %80 as its resale value is decreased by the contract with the village.
Hi Tiger, welcome!
How did you find out that information?
If that’s true than I have now lost all interest in ever buying these units. No growth is one thing, but steady negative growth, can’t live with that!tiger,
I don’t think that is true of all these type of properties. I think you are talking about the major centres that residents buy into but never really own ie that cannot be resold on the secondary market.
Cheers,
Simon Macks
Mortgage Broker
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Hi Chan$,
In my research, If the retirement village Pricing $95,000, which inc. Furnish furniture value abt. 35,000, this mean the “net Unit” only “valued” $50,000, The +ve cf just come from the Depreciation form furniture, but it just last for 5 yr.
Do you think so?Regards
JulianHi,
Some furniture might have a longer depreciation schedule but that would make sense based on what you said there
cheers,
bluecatDo today what you want to do tomorrow
Hi Chan,
interested to know what you are loving about the retirement village. I mean about the deal. How do the numbers stack up if you borrow at 100 percent, 90, 80, 60? Just make sure it IS actually a good deal you are jumping through hoops to buy.
cheers-
MiniOriginally posted by Julian:Hi Chan$,
In my research, If the retirement village Pricing $95,000, which inc. Furnish furniture value abt. 35,000, this mean the “net Unit” only “valued” $50,000, The +ve cf just come from the Depreciation form furniture, but it just last for 5 yr.
Do you think so?Regards
JulianJulian,
I agreed to what you are saying. It also depend on which method you are using for the depreciation schedule.Mini,
The reason I am looking into retirement village because of it high rental yield, high depreciation, long term settlement, low vacancy rate. But now I am not looking at retirement village any more because of the researches I found.Warm Regards
ChanDollars
[Keep going, you’re on your way to financial freedom]
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