It’s always good to have options, and as financing boarding houses has always been challenging it is good to have another lender now.
This lender is focused on the boarding houses that are zoned residential rather than the larger commercial boarding houses that we see more in the central city locations. There are a lot of investment properties that fit this classification and of course the income generated from a boarding house is a lot better than the standard residential rental with a sole tenancy.
Like all lenders there is criteria, but it’s not too bad.
- Lending – they will be able to lend up to 60% of the purchase price or valuation. A registered valuation is needed in all instances.
- Loan Terms – can be up to 30-years with the initial 5-years as interest only.
- Property – as mentioned the boarding house needs to be zoned residential and be in an acceptable condition.
- Income – the rental income to be scaled at 65% if using room by room rental for those being the owner and operator.
- Interest Rates – from 8.90% (plus fees of 2%)
- Insurance – this is always required and must have the landlords cover to ensure that there are no issues at claim time.
This is an overview showing what the lender will look at providing lending on. They are really looking for those property investors that have one or two smaller boarding houses.
Of course financing boarding houses is not as simple as arranging a mortgage on a home or rental property, but I have the experience and lenders to help make this a lot smoother for you. My aim is to get your finance arranged in a manner so you can concentrate on managing your boarding house and making money.
I’m always happy to help people that are buying a boarding house, but also have found that I’m helping a lot of boarding house owners refinance to a better mortgage.
Let’s talk and see what can be done.
