No money down deal

[Jas]

Saw this in the paper on Saturday. Not for me, but I thought the forumites might be interested...

http://canberra.propertyguide.com.au/property.asp?u=405851
Owner needs to sell and will leave enough money in the property to cover all up front costs. If you have ever wanted to invest, now is your chance. For full details on the properties and this amazing deal, call now. Apartments are 2 bedroom and 2 bathrooms with potential rental of $370 $390. EER min 4.


HEre's a comp
http://www.ljhooker.com.au/property_listing.php?id=381511&type=residential&category=buy
$309,000
Situated in one of Canberra's most innovative Apartment buildings, this two bedroom unit, which is currently under construction, is located only minutes from the CBD. Offering a high level of inclusions such as European appliances, and quality fittings in bathrooms and ensuites, this spacious two bedroom home will also be fitted with Transact broadband data and digital entertainment cabling. Secure underground parking is provided for all residents, as is access to a spectacular swimming pool, a fully equipped gymnasium and a 4th level BBQ terrace. For the modern living, city worker, this property should be given prime consideration. EER:4*


Jas

 

[Andrew]

Sounds like someone has bought off the plan
and now can't complete the deal. Perhaps
they figure the deposit will be lost if they can't
sell so why not turn it into a loan.

andy

 

[WillG]

Perhaps they purchased the unit using deposit bonds.

How can somebody 'leave enough money in the property to cover up front costs'. What up front costs are they talkng about ?

 

[the_captain]

Leaving enough money in the property

Hi WillG and others,

Firstly I haven't checked the links as I am coming over a dialup internet connection

Assuming the unit is off the plan the up front costs you will incurr are as follows.

1. Stamp duty
2. Deposit Bond
3. Legals
4. Strata Mgmt fees
5. loan start up costs

So I think it means that they will tell you that the property is $400K........but they estimate that it will cost $20K to transfer over (figures used for illustrative purposes only), so they will sell it to you for $380K. Then you can go along to your bank and get a 95% lend on $400K which is what the property is worth, thereby putting none of your own money into the deal.

Assuming this is the case, I can tell you from experience that banks take a dim view of such practices and are catching on fast, so get a valuation from a panel valuer.

Also, are rents that high achievable in Canberra. I come here alot on business, but don't know the market at all.

 

[WillG]

Captain,

As you probably know, Canberra is the cultural hub of Australia (not Melb as you think) he he he . That's why rental demand is so high la !

 

[Jas]

Rents are very high in Canberra ATM. High demand fro housing in all its varities is driving up rents and prices.

Jas

 

[geoffw]

Vacancy rates were about 4% before the fires. They're close to zero now. The demand for buying houses is also high.

There's a possibility that extra tradesment in town as well as the 500 house shortage could be contributing to this demand. There's sure to be other factors.

I saw the ads Jas mantioned in the initial post. The Phoenix apartments are new- LJH called me about a launch several weeks ago- I didn't get there. It looks like something which could add to a glut of apartments- they're only one of many coming online I gather.