Rural lifestyle homes

Many of us dream of owning a few acres to give our kids room to play and explore, have a horse or two, or just to enjoy the privacy of a larger block.

rural lifestyleThe trouble is, depending on your lender, a block larger than 10 or 20 acres can be hard to finance, and will often be treated as rural in nature.

Why? Because bank lending and policy decisions are made in the CBD by people that think Birdsville is as far west as the country goes (well, OK, they may have heard of Perth and the big rock in the middle, but that's pushing it).

There are some common rules around these blocks to have the finance on them treated as a home loan: 

  • All weather access - Sealed is preferred, but a well-formed, all-weather gravel road may be acceptable.
  • Electricity - In most cases forget off-the-grid, you will need access to electricity.
  • Water supply - Most lenders worry about relying on rainwater and will really want town water. Trickle feed is acceptable.
  • Phone service - This used to be a big killer, but it is becoming accepted that fewer people have landlines.
  • Sewerage - Septic or other approved systems are OK. Just for the record, long drops are not considered "approved".
  • Location - Generally within 5-10 kilometres of a town.
  • Price - Lenders will be hesitant about a block (or house) where your sale is near to the highest recorded because it reduces their resale market.
  • Market - Evidence of a ready resale market. Recent property sales within the prior six months are usually used by valuers for comparison purposes and as these types of properties often don't sell quickly comparisons are often limited.
  • Size - This is tricky. If the property is not income-producing up to 100 acres it is generally all right. Once it gets bigger lenders are less relaxed about some of the points above and start to baulk at the block you are looking at.

Depending on the deal, any of these points may be negotiable. While it may sound hard, David Seymour has lenders on his panel who are more comfortable than others in this space. Why? Because they are smaller, regionally based lenders who understand our lifestyle and want or have a similar block themselves. Email or phone David on 0418 785 747 to find out more.

David Seymour is an Authorised Credit Representative No 477331 of Regional Finance Solutions Pty Ltd ABN 71163893945 Australian Credit License 484980. Article by Regional Finance Solutions. First published on 24 May 2018 - https://www.regfin.com.au/blog/rural-lifestyle-homes.php