Hi all,
Answer me this question, and I will be a very happy chappie!
Regarding serviceability of loans.
One house, (current property that the bank and I own) 7 bedrooms, rented out on a “room to room†deal to students, generates $715 per week, but the lenders will only recognise the $460 per week (from the valuation) that the whole house will rent for.
How can I get the lenders / banks to recognise all the income generated by a investment residential property, rented out on a room to room basis, instead of only recognising the amount of rent a standard REIQ lease / property valuation lists?
If I could work out a solution to this problem, I would be able to get 106% loans, the TOTAL income covers the serviceability, and I can find / make enough of these properties to keep me busy for a long time
I have found one perfect (subject to building inspection) house for $375 000 or less, that I would love to get into. Seven bedrooms, two kitchens, two bathrooms, two toilets, two lounges, fully furnished, two of almost everything, (except the animals [biggrin] ) 737 sqm, 11 kilometres to the Brisbane CBD, about 100 metres to a train station, I can build to 3 stories anytime in the future, and with 5 tenants from the get go.
And the answer is …. [exhappy]
Cheers
TMR
What about getting the place rented to a ‘third party’ who signs a lease for the whole property and then onleases the place room by room.
Many lenders will go on the lease if it is properly drawn up and executed.
Alternatively what about showing the rental income coming into your account each month. A history of this should help.
Terryw
Discover Home Loans
Parramatta
[email protected]
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Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Hi Terryw, and thanks for your reply.
The bank I am currently with (and it seems all others) does not seem to care at all about the amount of money coming in. They just don’t want to acknowledge room-to-room returns. Pretty stupid considering there is an 18-month history of consistent income.
I do like your idea about the 3rd party lease. I will have a look at that.
Thanks
TMR
Maybe PM Terry and ask him if he will help find you another lender – there will be alot of other factors in play but with a proven history of income you should find a lend. What is the gross/net difference in the income.
Sourcing Positive Cashflow Investment Property http://www.cashflowproperties.co.nz/properties-5.html
Hi again Terryw, I chased up the third party lease option, and it looks like it will fix 75% of the problem. So looking for or creating a third party ; ) Thanks for that. If anyone can find a lender that is happy with a room to room deal, I will be very happy, but totally suprised! I think I have checked with most.
I have a client with Bankwest. I think with one of his loans, we pushed them and the took the bank direct deposits as proof – less than 80% LVR = no LMI issues.
Terryw
Discover Home Loans
Parramatta
[email protected]
Sign up to my mailing list.
Just send me a blank email, with “subscribe†in subject line.Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
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