I have almost no knowledge when it comes to commercial IP. I have found a property for sale that includes one shopfront on the main street, 2 x 2B/R flats, 1 x 1B/R flat and three rentable storage sheds. Fully tennanted it will meet the 11 second rule. Being a combination of residential and commercial, would this property require a commercial type loan? I understand these are different to purely residential loans – but in what way?.
Thanks
Sonja140p/w from the shop & sheds, 260p/w from the flats…
Interesting proposition Sonja.
Judging by the shp rental it sounds as if the town must be a very small town.
Perhaps a good idea to line up the finance before you sign a contract ?
Pisces
Yes, it is in a small town (pop approx 1000) but near a larger rural centre. I am aware that, for finance, this is not as important as the postcode. No way that I would sign without finance but thanks for looking out for me. The wierdest thing is that the vendor wants a 1 yr lease on the shop (at 100 p/w) so that he can stay there 2 or 3 times a month as he has been transferred to Melbourne for work – perhaps the shop counts as residential too? As yet I haven’t even seen this place and it is a bit of a hike from where I live but when I’ve had a look I’ll get back to you.
Thanks
SonjaHi again,
Just thought that I’d let you know that I decided not to go with that particular deal but still find the idea of properties that include a combo of commercial and residential interesting. Any general info on financing this sort of deal would be appreciated. How do you know if it is a residential or commercial loan? Is there any general rule here? Exactly what is the difference between a commercial and a residential loan? Is it just the LVR or is there more to it?
Thanks
Sonja
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