Mixed Use Property Loan Yandina
Combining a commercial property loan and a home loan
A married couple with three children are selling their Buderim home and purchasing a home in Yandina. They intend to build a commercial shed for their business to trade from at their new home.
The client’s lending needs
They had been living in Buderim for the past 10 years and had built substantial equity in their home through a series of non-structural renovations. Their plumbing supplies business had been renting a warehouse for $82,000 per year and their commercial lease was due to expire. They were seeking to buy a family home on an acreage with room to build their own warehouse and operate their business from their home property.
The Refinancing Loan Lending Challenge
The couple had signed a contract on a property in Yandina that would be perfect for their family and large enough to build a warehouse to operate their business.
But, they had a 2 week finance clause.
- They had not yet completed their most recent year’s tax returns showing significant growth in their trading figures.
- They didn’t know whether a warehouse of this size would be approved by council under the current zoning.
- They needed to sell their existing home to access the equity required for their purchase.
The Mixed Use Loan Solution
Pre-approval commercial loan in Yandina
After Jim and Mary’s initial chat with us, we were able to determine that there was a likely lending solution for them, but we would have to move fast.
We referred them to a town planner to discuss the likelihood of council approval for their warehouse and began working on a solution that allowed them to keep their property at Buderim until after they had settled on their purchase in Yandina.
We found a lending solution for them through a major bank that provided unconditional approval to purchase their property, with a pre-approval for a commercial loan to build their warehouse on their new property.
Jim and Mary were able to stay living in their Buderim home while they sought council approval for their warehouse, completed construction, and move their business and their family into their new property.
They have since sold their Buderim home for a great price and used these funds to completely pay out their purchase loan with only a tax-deductible commercial loan remaining for their new warehouse.
The interest only repayments on this loan cost them less than half of the rent they were paying on their previous commercial tenancy.
Case Study Details
- Location – Yandina QLD
- Type of Loan – Residential home loan and commercial loan
- Purpose of Loan – Buy a residential property and build a commercial shed for their business to trade from.
What is a mixed-use property loan in Australia?
A mixed-use property loan in Australia is a type of financing designed for residential and commercial properties. These properties might include a residential home with a commercial shed, buildings with apartments or living spaces on the upper floors and retail shops, offices, or other commercial spaces on the ground floor.
Key Features of Mixed-Use Property Loans:
- Loan Structure – The loan might be structured differently depending on the property’s use ratio between residential and commercial spaces. Lenders may categorize the loan under commercial or residential property loans based on this ratio.
- Loan-to-Value Ratio (LVR) –The LVR for mixed-use properties is usually lower than that for purely residential properties. It might range from 60% to 80%, depending on the lender and the specifics of the property.
- Interest Rates – Interest rates for mixed-use property loans are generally higher than for standard residential loans but lower than for purely commercial loans.
- Eligibility Criteria – Lenders typically consider factors like the location of the property, the nature of the commercial business, the borrower’s financial standing, and the expected rental income from the property.
- Loan Purpose – These loans can be used to purchase a new mixed-use property, refinance an existing loan, or even renovate and improve.
Considerations:
- Complexity: Mixed-use properties can be more complex to finance due to the dual nature of the property. Lenders may have more stringent requirements.
- Rental Income: The commercial portion of the property might be subject to different rental market conditions than the residential part, impacting the overall investment’s viability.
In Australia, working with a lender experienced in mixed-use properties is advisable to navigate the specific requirements and optimise the loan terms.
Contact
1A / 14 Smith Street, Moolooalba, QLD 4557
How To Find Us
Driving directions
Our office is located on the corner of Smith and Muraban Street, just a block back from the Mooloolaba Esplanade.
Parking information
There are a few onsite parking spaces available, including disabled parking, as well as street parking and paid hourly spots, which are available in the multi-story parking facility across the road from our office.
Wheelchair friendliness
There is wheelchair access to the office, as well as wheelchair friendly restrooms and parking.
Pet friendliness
We are a pet friendly office; however, we do ask that you kindly keep dogs on a lead for their safety as we are near relatively high traffic road.