Obtaining finance
Obtaining finance for a golf resort property can be quite complex, depending on the property type and your personal financial situation.
Phil Ezzy, general manager of Refund Home Loans, says lenders will look closely at the title of the property when processing your application.
“It depends on the way the title has been structured on the property,” Ezzy explains. “The title could be freehold or leasehold. Leasehold basically means that you’re entering into a very long-term lease, so lenders tend to look at these applications on a case-by-case basis.”
If you buy a leasehold property, you don’t actually own the property – instead, you own the right to live in (or rent out) the property for a specified period of time.
According to Adelaide-based legal and finance group Fletcher and Lawson, a leasehold property is normally bought by the payment of a single premium.
However, a ground rent may be payable, and this ground rent may be anything from a peppercorn rent of a few dollars, to a more substantial amount of money.
As a result, Ezzy says it’s “much easier to get finance for freehold property”, as stricter lending criteria may apply to leasehold property purchases.
Ezzy says the type of rental arrangement – whether it’s permanently let or holiday let – may also be a factor when applying for finance.
“Also, a full deposit may not be necessary, as the borrower might be able to use existing security to release some equity; but again, that would be determined on a case-by-case basis.”