Where can I get mid 5s with no reviews? Ammortising over how many years?
My fixed term is up in Jan and am eager to bring on the savings!!
15 years....interest only for first 5.
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Where can I get mid 5s with no reviews? Ammortising over how many years?
My fixed term is up in Jan and am eager to bring on the savings!!
It depends. They will insist on annual reviews - which I detest.
A $5m site is a hefty investment however as for risk, you are probably looking at a multi-tenanted building. So unless the lease expiry profile is skewed to a particular time (exposing you to several possible concurrent vacancies), then you are also able to spread/lessen the vacancy risk.
When you talk about bank reviews, does this always mean a rise in interest rate for the loan?
No. An annual review entails:
1. Providing your tax returns / ATO running statements etc to the lenders each financial year. Depending on what's in there they may adjust the rate / LVR.
2. Requiring a revaluation of the property every 2-3 years at your cost. With a property of about $5m this would cost about $5,000-$10,000. You don't even get a copy of the report!
So something like this - a little shopping centre?
http://www.realcommercial.com.au/property-retail-nsw-erina-500746423
Yep, that's a corker. Not sure if it would be sub-$5m without more on the income/lease expiry profile etc.
Back on topic.It's too early to celebrate this. We've exchanged but not settled. I've now just heard from the agent that the tenant is going to walk out on the lease.
There were two leases, one was 1+1+1, and we didn't expect that option to be taken up. But we fully expected the other tenant to be around for a long time.
While the tenant is still responsible for the lease, and by law is obliged to pay for the full term, in practice I'm guessing it could be very expensive for me to chase her up. And it's always possible for somebody to declare themselves bankrupt.
There are three signatories to the lease, which might make bankruptcy difficult. But there is no guarantor.
It's possible that the seller knew about this- in fact I'd think it was extremely unlikely that he would not have known anything. It's also possible that he has been foregoing rent in order to sell the shop- speculation of course.
So we have the option of walking out before settlement (costs incurred maybe $35k), or taking a risk on the tenant continuing to pay, or being able to find a replacement tenant. Our expenses would be interest on $200K + outgoings- rates, land tax, insurance.
Back on topic.
We settle tomorrow.
The tenant is going to continue in the shop for the time being. She has a strategy she's putting into place to try to minimise stock wastage.
The property is in Wagga Wagga.