Finance for house with commercial zoning

Rolf,

If a house is a house, does it really matter if the zoning is not residential? The zoning only says something about the possible use for a site- not the actual use?
 
Hi GW

Nice try, most lenders though will clobber you with:

Its zoned commercial so thats what it COULD be used for so the risk is higher due to the longer leases.

Similalry, if you have a place thats zoned resi with existing rights usage say for professional rooms, then you are alos generally looking at 70 %.

Ta

rolf
 
Rolf,

Then does that mean they could also clobber you with other commercial conditions like 10 years P&I loans? That could really be a killer!
 
If I tried to buy a residential property in an area which had been rezoned as commercial, and was refused because it was "commercial" property, I'd be looking for a "diff funder" anyway.

(though I guess it would come down to the mortgage insurers- both of them).

What about properties in which the usage changes from "residential" to "commercial"? Could that be a problem?
 
Hiya

Anything that has commercial in usage rights or zoning or existing use will attract a lower lvr usually, even mixed resi/comm max is usually 75.

As for LMI no go with anything commercial generally.

ta
rolf
 
Geoff

A house zoned commercial would need a permit to enable residential occupancy if the property hadn't been used for residential continuously or in the immediate past.

Zoning is different to approval to operate allowable by a planning permit.

For example, the municipal planning scheme / ordinance may carry a commercial or industrial zoning because the strategic planning is for an area eg major highway, flat land, railway, noise or pollution problems, whatever, and the 'highest or best use' of the area would be commercial or industrial.

Mixed use zoning would allow or tolerate a variety of uses as defined in the ordinance. eg a business district may allow retail, commercial, and residential, so hotels, apartments, shops, offices may all be in the mix together.

A permit, however - like the 'medical centre' permit, is for specific activities to be carried on at a specific property subject to specific conditions. It is not mandatory nor exclusive. If the business activity is not carried on, the property may revert to residential without further specific permits.

So, even when I have finished the medical centre, under the Class 5 BCA compliance (strong floor, ratios of natural light & ventilation to floor area, etc), for someone to live there, about all they need to do is install smoke alarms and it would comply with its zoning, Class 1, Residential.

And that person could buy it as a residential dwelling, even if it has a sign out the front and 200 patients per day.

That's why it's hard to make general assumptions, whether for finance, redevelopment, etc Each case is taken on it's merits, it's all the shades of grey which present the challenges.

Cheers

Kristine

By the way - if a person buys property / new car / holiday / 27 serviced apartments using their line of credit, then the criteria of the lender doesn't come into it. Failing that, a spot of cross collateralisation doesn't go astray. Where there's a will, there's always a way.
 
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