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Hello All
I was wondering if you could help me determine whether developing my rental site would be a good investment. The site currently has 1 dwelling and has been deemed by Auckland council as terrace and apartment building zone. I am owing 100,000 on this and no other loans. I am receiving $540 rental per week. I pay into the loan account 4000 per month and soon may be able to pay 5000 per month.
The current situation is that now I have a site which is in terrace/ apartment building zone, I wish to build 6 terraces which may cost approximately 2 million. Each dwelling can generate income of 600 per week based on property appraisers. I do not have a deposit but I can secure a loan of up to 2 million according to my loan broker with my wifes income taken into account though I dont intend to touch that money as we will live off that.
I would like to know whether it is financially sound decision to go ahead with this project. Whether I would struggle if the interest rate increased. What to look out for?
I was told yesterday by a mortgage broker that if there is 3 or more properties on a land then the loan type will have to be commercial and therefore commerical loan terms are 15 years. He also told me that it may be financially safer to have at least 2 seperate titles so that if I got in financial difficulty, I can sell off some titles and pay a large portion of loan off.
I really need somebody with knowledge and experience in property development to tell me which way to go.
Your assistance will be greatly appreciated.
I was wondering if you could help me determine whether developing my rental site would be a good investment. The site currently has 1 dwelling and has been deemed by Auckland council as terrace and apartment building zone. I am owing 100,000 on this and no other loans. I am receiving $540 rental per week. I pay into the loan account 4000 per month and soon may be able to pay 5000 per month.
The current situation is that now I have a site which is in terrace/ apartment building zone, I wish to build 6 terraces which may cost approximately 2 million. Each dwelling can generate income of 600 per week based on property appraisers. I do not have a deposit but I can secure a loan of up to 2 million according to my loan broker with my wifes income taken into account though I dont intend to touch that money as we will live off that.
I would like to know whether it is financially sound decision to go ahead with this project. Whether I would struggle if the interest rate increased. What to look out for?
I was told yesterday by a mortgage broker that if there is 3 or more properties on a land then the loan type will have to be commercial and therefore commerical loan terms are 15 years. He also told me that it may be financially safer to have at least 2 seperate titles so that if I got in financial difficulty, I can sell off some titles and pay a large portion of loan off.
I really need somebody with knowledge and experience in property development to tell me which way to go.
Your assistance will be greatly appreciated.
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