All Topics / General Property / How to go about buying Land only!

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  • Profile photo of StaceyWStaceyW
    Member
    @staceyw
    Join Date: 2011
    Post Count: 2
    August 31, 2011 - 4:12 am

    Hi there,

    My husband and I are looking at buying some land in WA (Hopetoun) but are not sure of how to go about it. We are currently living in a remote town in the Pilbara (mining) so using our First Home Owners Grant isn't possible at this stage. We would like to purchase (under finance) a block of land to hold onto for the future. My parents would like to build a barn style shed on it and keep a caravan there also. What is the best way to go about doing this and what should we consider???

    Any info will be highly appreciated

    Thanks
    Stacey

    Profile photo of Mick CMick C
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    @shape
    Join Date: 2010
    Post Count: 1,099
    August 31, 2011 - 4:20 am

    Hi,

    Hate to be the bearer of bad news but i promise you there is a solution :)

    1. Hopetoun is what LMI and lenders consider as Cat 4 (red Zone) area; meaning it’s high risk…so your lVR needs to be under 80%
    2. Hopetoun is also a rural area with Population under 10,000 – so LVR needs to be under 70% :(
    3. Vacant land only is not the preferred way a bank would like to hold a security – higher risk, harder to off load.
    4. If your parents wants to build a Barn on the land then it will be consider as income producing/ commercial
    5. Very hard to have one lender hold the land and another lender finance the build- as there is only one title to hold.
    6. valuation of the land would be one of the largest part- if the valuer can’t determine a value then your going to have trouble,

    Solution?

    – LVR needs to be under 60-65%
    – Land purchase as per normal but since it’s vacant land with no intention of a build – you will have to go thru a specialised lender- rate would be 7.9% + a set up cost of $900

    Also is your parents going to use cash to build? or finance? also is it income producing? farm etc? lastly what size is the land?

    Regards
    Michael

    Mick C | Shape Home Loans
    http://www.shapehomeloans.com.au/
    Email Me | Phone Me

    Same Banks. Better Rates. Served With a Passion.

    Profile photo of StaceyWStaceyW
    Member
    @staceyw
    Join Date: 2011
    Post Count: 2
    August 31, 2011 - 4:52 am

    Ok I should have also stated that we have no idea about any of this hahaha Can you please tell me what IVR and LVR means?
    Just spoke with my Mum and she said they will more thank likely pay cash for the shed and no it will not be a farm.
    We just wanted something easy and not too expensive for us to keep very long term.
    Would it be better if we were to go for the land and put a kit home on it at the same time?
    My Dad is the manager (or high up) at the Mine out there and was saying it will definately pick and also that there is a new mine coming too.

    Profile photo of Mick CMick C
    Participant
    @shape
    Join Date: 2010
    Post Count: 1,099
    August 31, 2011 - 5:02 am

    LVR = Loan to value ratio.
    Ie $100,000 for land purchase, and make say max LVR of 60% — means the max loan ratio is $60,000.

    Yes kit home is easier- as it’s consider more of a standard build VS a shed.

    Regards
    Michael

    Mick C | Shape Home Loans
    http://www.shapehomeloans.com.au/
    Email Me | Phone Me

    Same Banks. Better Rates. Served With a Passion.

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