Hobby farms

From: Yuch .


People,

Has anyone had experience in buying hobby farms?
Is it just like investing in holiday houses?

Do you normally rent it out to local farmers? And how does the banks evaluate the investment?


Regards
yuchun
~ The secret to success is to start from scratch and keep on scratching. ~
 
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Reply: 1
From: Rolf Latham


Hi YC

Bad news re deposits required depending on the size, 70 % No Lenders Mortgage Insurance is the norm, though depends might be able to do much better

ta

Rolf
 
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Reply: 1.1
From: Yuch .


Hi Rolfie,

I spoke to Commbank in regard to hobby farms. I was told that hobby farms are classified as rural security, therefore can borrow up to 90% but depends on where the property is located as well.

Regards
yuchun
~ The secret to success is to start from scratch and keep on scratching. ~
 
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Reply: 1.1.1
From: Michele B


Bought one myself but there were issues, particularly about the size of the holding - most lenders don't like properties over 25 acres. ANZ were good and I guess more flexible as they had (at that stage) rural branches so valuations etc were no problem - even easier if you're part of a premier package setup. In my case I avoid sharefarming and just rent the land to a farmer on a 3 year lease. Works well for me!

Michele
 
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Reply: 1.1.2
From: Rolf Latham


Have fun

As always there's lotsa promises from various lenders till you ask them to put their money down ! Rural residential to 25 acres you can sometimes get mortgage insurance but it had better be a very watertight and airtight deal, and as an investment property even better fun.

Ta



Rolf
 
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Reply: 1.1.2.1
From: Gee Cee Cee


Have a friend that bought the wonderful Hobbie Farm to rent out.

That was 7 years. He has had that many tenant changes as the area declines and more 7 more properties become vacant. He has tried to sell it, Wrap it etc. It is now valued at about half of what he paid for it. the rent has dropped also.

(Now he would like to burn it)

I said to him in the start the area was declining and Supply/Demand would control the end result.

The dream was too much.

A good area may be Ok but not my scene.

Just my thoughts.

Good Luck & happy investing.

Gee Cee
 
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Reply: 1.1.1.1
From: Terry Avery


Michele,

I have also bought a farm and would like to discuss some issues such as the
lease and insurance. If you wouldn't mind discussing these offline could you
email me?

Terry

tavery@loxinfo.co.th
 
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