Useful Tips

Rural Acreage or Lifestyle property

Every lender has their own terms and conditions, and this is intended only as a general guide to understanding this topic. Contact us to discuss your individual circumstances.

Definition
Thinking about a Tree-Change? Buying a home in the country has many benefits and is sometimes a dream of people wishing to escape the Rat Race. But before you fall in love with any property, make sure that you can borrow the money you need to buy it.

Things to consider
In general a rural property will take longer to sell than a home in a major metropolitan area, simply because the number of potential buyers is less.
When a lender offers you a loan, they take a mortgage as security over the property, and they have a preference for low risk securities.
Due to the higher re-sale risk, banks require other aspects of the property to be lower-risk. A mitigant that many lenders put in place is that you have to put in more of your own cash (or equity) towards the purchase price. Here are some other considerations:

Factors that make a rural property less risky:
Under 25 acres
Lifestyle property with co-incidental income
Sealed Road access to property
Established House
Nearest town with a large population & within easy driving distance
Services and utilities connected
Three comparable sales in the vicinity within the previous 3-6 months
Council zoning includes the word “residential”

Factors that make a rural property riskier:
Over 25 acres
Income Producing
Unsealed Road leading to property
No dwelling on the land
Long drive to the nearest town with a small population
No town water or not attached to electricity grid
No comparable recent sales
Council zoning includes the word “farming”