An individual can purchase an apartments for themselves as a permanent residence. Condos are common apartment types. If a client is interested in purchasing a serviced, student, or holiday letting apartment, the financing for each differs from a residential home purchase.
Serviced Apartments
A first-time homebuyer is less likely to receive financing for a serviced apartment purchase. This apartment type rarely serves as the buyer’s primary residence; it’s more often used as an investment. To receive a loan, the financing amount is based on the value of the property and doesn’t include any furniture or other furnishings. Lenders finance up to 80% of the multi-unit property’s value if criteria are met. Criteria include rental income potential, property size, and zoning restrictions.
Student Apartments
Student apartments are also an investment property, so the purchase does not qualify for a residential home loan. Lenders take into consideration if the applicant has purchased other property. Investors can work with a school’s housing office to lease the units, but there’s still going to be a high turnover.
Holiday Letting Apartments
Australians who participate in holiday letting have found that they can earn enough income in two months to cover a year’s worth of expenses. An existing homeowner can rent a portion of their home during the holidays. They can also acquire financing for a second home that will be let during the holidays. It’s best to speak with a lender like Mortgage Street to determine potential financing and loan terms.
Small Living Area Apartments
Small living area apartments can be used as a residence or rental property. Lenders take a look at the area’s rental history, forecast the market, and the applicant’s financial situation. To help a client obtain financing, brokers should walk their clients through lender expectations first.
Apartments Conclusion
Apartments are great to live in and great investments. Lenders are willing to fund these multi-unit complexes, but the financing includes some restrictions and requirements. There’s a risk involved in an apartment purchase. Brokers can contact Mortgage Street for more information.