Help with Buying

Hi Hotproperty investor (arent we all? [biggrin])
Basically a company title is where the owners of a block of units form a company, with each becoming shareholders of it. Not real common, and as others have alluded to you will need to seek legal advice if serious about purchasing one of these type units. You actually don’t own the legal title to the property, but actual shares in the company that owns the title, which is the land and buildings. Obviously this is why financiers are not overjoyed at the propspect of funding one, and if you can find one that will, they will impose some seriously low LVR’s. (50-60 %?… not sure) The other ‘challenge’ is that the majority of shareholders are required to approve of any decision to transfer ‘shares’, so you could be locked out of their little company even if you want to ‘buy’. I understand even though you would have exclusive possession of your unit, you will need approval from the company to renevate or alter the building too. Phew! Hope that give you a better idea. You can appreciate why most property is strata titled now too I guess. All the best with whatever you decide. [strum]

No worries. LVR is loan to value/valuation ratio. Ie, If a property was 4 sale @ $100000, and you borrowed $80,000 of it (you had a 20% deposit – $20,000 your loan would be @ 80%LVR. A lot of investors try for higher LVR, such as 90 or 95% (in the above scenario, you would only use a $10,000 or $5000 deposit respectively) but loans over 80% LVR require the lender to pay ‘Lenders Mortgage Insurance’, which can run into thousands of dollars, depending on the property purchase price. Higher LVR over 80%, the higher the LMI as a rule of thumb. You can appreciate that a loan with an LVR of only 50 or 60% means you have to cough up a bit eh? All the best with your investment journey too! [strum]

Hi

What is attracting you to this particular property?

They are harder to get finance for and harder to sell and have some of teh challenges already discussed.

There would have to be something pretty special about this property to make you choose it over the thousands of properties avaliable for sale.

Michael Yardney
METROPOLE PROPERTIES
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