Block of flats in Cairns - current rates

[laurieload]

Hi there,

Am thinking about trying for our first block of flats in Cairns suburbs. 4 beds on one title around 400-500k, rents around 800pwk.

Having never done this before can someone please tell me:
1) is it likely we cant go above a 70% val loan?
2) are I/O interest rates higher?
3) anything else I should factor in?

I am assuming also current rents are what are used in income calculations, or is it possible to use future rents if REA writes something to say they are due for an increase?

Thanks in advance keepers of block-of-flats knowledge

 

[Rolf Latham]

subject to a few things 80 % lvr at normalish resi rates should be possible

ta

rolf

 

[Peter_Tersteeg]

We've recently done a deal of 4 units in a block at 90% on normal residential rates. It's not a difficult scenario, but the number of lenders are limited.

 

[jonmardell]

As mentioned you could go above 80% with a limited number of lenders but at 80% you would have a bigger choice. Standard rates would apply as it is residential security. There should not be a loading for interest only and the rent would be determined by the current lease or what the valuer states on the report. The bank would not take into account future rent increases but this does help strengthen the deal if things are tight.

Hi there,

Am thinking about trying for our first block of flats in Cairns suburbs. 4 beds on one title around 400-500k, rents around 800pwk.

Having never done this before can someone please tell me:
1) is it likely we cant go above a 70% val loan?
2) are I/O interest rates higher?
3) anything else I should factor in?

I am assuming also current rents are what are used in income calculations, or is it possible to use future rents if REA writes something to say they are due for an increase?

Thanks in advance keepers of block-of-flats knowledge

 

[laurieload]

thank you for your input gentlemen, much appreciated

 

[DavidMc]

Don't forget to check out the cost of insurance up there!

 

[laurieload]

Thanks, they are hideously high aren't they. I am factoring in insurance based on estimations in http://www.rentcover.com.au . Finding rates are pretty nasty also.