commercially zoned dwelling.

[Dylan33]

I'm interested in a house which is commercially zoned. Was thinking of a reno job where it can be converted easily to accommodate either a family or commercial rooms.

Are there any special rules or pitfalls I would come across with financing such a property ie, LVR special council rates etc?

 

[Aaron_C]

When it comes to these type of securities, you have to check several things:

1. Does the zoning allow the property to be used for residential use at all? Usually business zones do but you have to check. You might need council permission to do any substantial renovations like what you mentioned.

2. What does the property look like? If looks like a shop (lots of glass at the front, big shop windows etc) then it will most likely be valued as a commercial property, and therefore you will have to pay commercial properties rates and LVRs. Obviously, commercial rates are higher and max LVRs are lower. If you are able to get a residential loan for it and then try to convert it into a shop/office, you might be breaching your loan contract as the property will no longer be a residential security.

 

[Dylan33]

Thanks. Very interesting! The property is a house. It is rented out at the moment to a family. It is at the end of a main street.
There is one opposite that has been converted to an Accountants office. The end of the street has D.A. for a Supermarket mall. I thought there might be an opportunity there.
But wondered why it's been on the market for so long at an average sale price?