Snow Lease Home Loan

Are you addicted to the slopes?

With a snow lease property, you can buy your very own piece of the snow field action and potentially earn great rental income as well.

How much can you borrow?

• First Home Buyer: We have two lenders that will accept snow lease properties at 60% LVR (loan to value ratio) over a 20-year term rather than the typical 30 year term.
• Investors: 60% of the property value
• Low doc: 60% of the property value with one of our lenders as a commercial loan.
• Guarantor: You may be able to borrow up to 105% of the property value by having your parents provide a limited guarantee.

Subject to a full valuation of the property and you meeting all other bank requirements, two of our lenders can approve as much as a 20-year loan term or whatever the length of the lease term is.

For example, if the lease is for 10 years, the lenders will accept a loan term of 10 years. For lease terms more than 30 years, the maximum loan term is still 20 years.

Our mortgage brokers can properly assess your situation and can tell you if we can get you approved for a home loan.

Call us on 1300 889 743 or fill in our free assessment form today.

What is a snow lease property?

Snow lease properties are located on crown land in alpine areas across Australia, usually near ski resort towns. The following are the most popular ski locations in Australia:

• Perisher Blue
• Thredbo
• Mount Buller
• Mount Hotham
• Falls Creek

In a similar way to financing serviced apartments, snow lease properties need to be identified as residential in nature. They can come in various types, including holiday apartments, chalets and lodges, and are leased out for short term stays.

For sublease properties in Thredbo and Perisher Blue (including Perisher Valley, Smiggin Holes and Guthega), the Department of Climate Change and Water administers the lease area on behalf of the New South Wales state government, the landlord, with Kosciusko Thredbo Pty Ltd as the head lessee.

Thredbo’s headlease was renewed for another 50 years as at 2007 with the main change being that leases went from Old Systems Title to Torrens Title.

Mount Hotham, Falls Creek and Mount Buller resort properties in Victoria are administered by the Mount Hotham Alpine Resort Management Board, Falls Creek Alpine Resort Management Board and Mount Buller and Mount Stirling Alpine Resort Management Board, respectively, as per the Alpine Resorts (Management) Act 1997.

Effectively, the head lessee acts as the local council, providing the same municipal services including electricity, water, sewage and garbage collection for an annual “bed license” payment. In periods where you’re not occupying the property, a real estate agent would be looking after the complex and you would pay them a management fee as well.

The property will behave as if it is strata title as most of the subleases require an active owners association as part of the lease. Levies for the owners association are similar to strata levies in a body corporate situation and will generally cover building insurance and some maintenance provisions.

What you need to know

The global financial crisis forced many investors to rethink where they chose to put their money, particularly in residential properties where rental income is likely to fluctuate such as holiday houses in beach and snow locations.

Investors and buyers alike have been wary of snow lease properties in particular because of global warming and how it’s causing the winter period to shorten.

In recent years though, most ski resorts in Australia have developed or are developing themselves as spring and summer retreats as well in order to attract more visitors and potential renters. In addition, the Australian economy is doing a lot better and more people can afford to head to the snow.

Why are the banks so conservative?

Acceptable properties need to be identified as residential in nature (apartment, unit or house) and subject to a sublease condition of 6 month permanent occupancy.

When banks consider a property as security for a home loan, they need to be certain that they can sell it just in case you default on your mortgage.

Most banks don’t really understand snow lease properties because there really isn’t a large market for it.  Most people who purchase snow lease properties will use it for two or three weeks in the year, a weekend every so often and then rent it out for the remaining period.

Because of the seasonal nature of snow lease properties and the occupancy restrictions, there is likely to be a fluctuation in tenants and, therefore, rental income. If you’re relying on rental income to pay off your loan, banks will always take a conservative approach.

We’re experts in “out-of-the-box” property types and take a common sense approach when assessing your situation and investment strategy.

Call us on 1300 889 743 or fill in our free assessment form to speak with one our mortgage brokers today.

What locations can we finance?

We know lenders that look favourably on snow lease properties in the Thredbo area in New South Wales.

Despite this, Thredbo and the following locations are considered high risk by most lenders with LVRs capped at 80% LVR.

• Mount Buller
• Mount Hotham
• Falls Creek
• Perisher Blue

Luckily, one of our lenders can accept any location in Australia.

Please call us on 1300 889 743 or fill in our free assessment form to discuss your situation with one of our mortgage brokers.

Use our Postcode Location Guide to find out if you may have trouble getting finance in a particular location you’re keen on.

What is a sub lease?

A sub lease is a real property rental agreement between an existing tenant of a property and a new tenant. This sub lease arrangement must be approved by the landlord which, in the case of snow lease properties, would be the park operator.

Purchasing a snow lease property is great if you enjoy the snow and don’t want to worry about finding accommodation during the snow season. The best part is, you can earn rental income for the remainder of the year by sub-leasing the property and even earn rental income at a premium if you decide to rent it out during peak periods.

You won’t have to pay two rents or an expensive fee to get out of the lease contract and the head lessee doesn’t have to bother with having to find another tenant.

If you, as an incoming buyer, wish to block out time for your own use you need to understand that once a booking has been deposited it can be moved if and only if the traveller consents to it being moved.

We recommend dealing with lawyers who are familiar with the conveyancing of snow lease properties.

We can recommend you a great conveyancer so please call us on 1300 889 743 today!

Apply for a snow lease home loan

If you want reap the rewards of a snow field lifestyle and good rental income, speak to us today.

Most of our senior mortgage brokers are successful property investors in their own right and understand how banks view different property types.

Please call us on 1300 889 743 or free assessment form and discover if we can get you approved for a home loan.