What is the definition of a studio apartment?
Banks defines a studio apartment as any unit that does not have a wall dividing the bedroom from the living room or kitchen. Unlike other forms of housing, a studio apartment contains a bathroom and, in most cases, a tiny kitchenette.
A studio apartment is often relatively tiny, measuring less than 40 m2 and sometimes as little as 25 m2.
Bachelor apartments, bedsitter flats, bedsits, and one-bedroom apartments are other names.
Note that one-bedroom apartments with a separate bedroom from the rest of the living rooms and above 50 m2 may qualify for a regular house loan rather than a studio apartment loan.
The size of the unit is crucial!
Every lender has its own set of requirements for the smallest unit size they will allow. Most lenders won’t approve a loan for a unit that doesn’t have a minimum interior living size of 50 m2 (excluding balconies and parking spaces). Title Loans – OakPark also available online for you money needs.
Depending on the property value that you need to borrow, we have lenders that would consider smaller properties.
Furthermore, a one-bedroom apartment poses a more negligible danger than a studio flat. This is because lenders feel that having a wall between the bedroom and the living space increases the marketability of a home.
Please note that the measurements are in square meters and do not include balconies or parking spots. They pertain to the unit’s interior living area.
How can I get a loan of more than 80% for a unit that is less than 40m2?
A guarantor house loan is another option for borrowing more than 80%. Because the lender has extra security in the form of your parents’ home, they may be willing to lend 100% of the purchase price.
Why are banks being so cautious?
Australian lenders consider small units odd and assume that there are fewer possible purchasers interested in such a property. Consequently, they feel that selling a studio apartment (which is often a modest property) will take longer than selling a regular unit.
This is, in our view, an out-of-date approach since studio apartments are becoming more popular as homes.
What kind of person buys a studio apartment?
Many young Australians live alone in studio apartments ranging from 25 to 30 m2 and smaller one-bedroom flats ranging from 30 to 40 m2.
The typical family size is falling, and more individuals are opting to live in a building with amenities like a swimming pool, gym, or sauna, often found in studio apartments.
Young guys residing in the CBD, in particular, hardly spend any time in their apartments. As a result, they just need a tiny kitchenette with a microwave, a bed, and a toilet.
Purchasing a studio unit
Many investors choose to purchase a studio apartment and then rent it out. The rent earned from the flat is generally rather substantial, mainly if it is located in a central location.
Areas like Darlinghurst in Sydney, the Docklands in Melbourne, and Southbank in Brisbane and Melbourne attract investors.
Benefits of Purchasing This Property Type
For many people, a studio apartment is a beautiful property type. The following are some advantages of purchasing a studio apartment:
- It’s less expensive than a typical downtown apartment.
- It is generally near the metropolis.
- In general, resale is simple due to the great demand for housing.
- They have a high rental return if you’re looking to invest.
- Advantages and disadvantages of purchasing this sort of property
The following are some disadvantages of buying a studio apartment:
- It’s possible to live in a loud apartment complex.
- Lenders’ Mortgage Insurance (LMI) may be relatively expensive at times.
- It just has a modest living area.
- Many charges are sometimes linked with residing in a studio complex with additional facilities.
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