The price of the property is not the only cost involved in purchasing a property.Initial cost + down payment is required, and you will prepare the necessary funds as your own funds.However, depending on the case, there is a possibility that a full loan will pass with XNUMX own funds.This time, I would like to explain the guideline of self-financing together even if the full loan is easy to pass.
table of contents
- 1 Real estate investment requires property purchase price + initial cost
- 2 Why is a down payment necessary for real estate investment?
- 3 How much down payment do you need?
- 4 What is the guideline for self-financing required when purchasing a whole apartment?
- 5 Even if there is no down payment, it is possible to receive a loan (full loan) if there is collateral.
- 6 Summary
Real estate investment requires property purchase price + initial cost
In a previous article “What is the initial cost of real estate investment?Thorough explanation of the breakdown”I wrote the contents. The initial cost such as brokerage fee, stamp fee, judicial scrivener fee, various taxes, etc. is about 6 to 8%.
If the property purchase price + initial cost cannot be purchased in cash, the shortfall will be covered by a real estate investment loan.
The brokerage fee is the most expensive of the initial costs, but in the case of the seller's property, the brokerage fee is zero, so the initial cost can be significantly reduced.
Why is a down payment necessary for real estate investment?
The down payment is necessary to appeal to the financial institution that the attributes are good.
This is because the examination of financial institutions has become much stricter than before due to a series of social problems such as fraudulent loans by certain financial institutions and building camouflage.Therefore, it is better to think that the loan will not pass if the self-fund (asset) is zero.As a point that banks look at in loan screening, personal attributes such as profitability of the purchased property, place of work, and high annual income are taken for granted, and there is a ratio of self-financing to the purchase price.
Since real estate investment is an investment that is managed systematically over many years, we examine how much you can systematically prepare funds when you start, and you can make a lot of efforts.
If the ratio of own funds is high, the monthly repayment amount will be small, but the leverage effect will fade.Also, if you force yourself to pay all of your savings as a down payment, you may be in a situation where you will be behind in repayment of the loan if some kind of trouble occurs.
It is absolutely necessary to avoid loan delays, so you need to have enough savings apart from real estate investment.
Financial institutions are also paying close attention to this, and even if you put a down payment of 1% to XNUMX% of the property, even if an unforeseen situation occurs and the rent becomes zero, or if you become unable to work due to an accident or illness, repayment will not be delayed for half a year. I need some leeway.
How much down payment do you need?
In many cases, it is necessary to prepare 1% of the property price.In the case of a proper loan that examines each case, depending on the attributes, there are cases where the loan can be obtained even if the down payment is less.For example, if you already have experience in real estate investment and have a track record of making profits, or if you own real estate that can be used as collateral.In addition, the asset quality of the desired property is also very important.Unless the vacancy rate is low and the property has high asset value, it is difficult to obtain a loan.
What is the guideline for self-financing required when purchasing a whole apartment?
Let's calculate the standard of own funds when purchasing a whole apartment concretely based on the down payment.
This is an example of a 8 yen apartment building that is an 6900-minute walk from the Tokyu Toyoko Line.We have received a loan of 6120 million yen because of the good attributes of this person and the high asset value of the property we want to purchase.Below is the initial cost breakdown.
| Item | Amount of money | Payment time | Remarks |
| Sales contract stamp fee | 30,000 | At the time of contract | |
| Registration and License Tax (Transfer of Ownership) | 287,183 | At the time of payment | (Land) 1.5% of property tax assessed value (Building) 2% of property tax assessed value |
| Registration license tax (mortgage setting) | 244,800 | At the time of payment | 61,200,000←Borrowing (0.4% of borrowing amount) |
| Judicial scrivener reward | 150,000 | At the time of payment | Reference: 10 yen to 20 yen |
| Property tax / city planning tax | 150,442 | At the time of payment | 365 days out of 365 (consumption tax may be imposed on the building settlement amount) |
| Real estate acquisition tax | 356,669 | 3 months after registration ~ 6 months | (Land) 1/2 x 3% of property tax assessment value (Building) 3% of property tax assessed value |
| bank charges | 660,960 | At the time of payment | Stamp fee, guarantee fee, administrative fee, etc. |
| Brokerage fee | 2,343,000 | At the time of contract/payment | 3% of body price + 6 yen (consumption tax) |
| Fire insurance cost | 250,000 | At the time of payment | Depends on building size (40 tsubo economy 10 years assumption) (lump sum payment or annual payment) |
| Deposit deposit | 65,000 | Offset | |
| Prorated rent | Offset | ||
| total | 1,838,385 | Separate real estate acquisition tax |
In this case, the self-fund required to purchase an apartment of 6900 million yen was 9,638,385 yen (down payment of 780 million yen + initial cost of about 183 million yen).The above is just an example, and there are various loan cases depending on the case, as there is no same thing in real estate.
Even if there is no down payment, it is possible to receive a loan (full loan) if there is collateral.
Financial institutions are always afraid of not being able to repay.Therefore, if you have real estate as collateral, you can collect the collateral real estate by auction instead of the loan amount, making it easier to get a loan without a down payment.
The loan amount is determined by multiplying the personal attributes and collateral valuation.Personal attributes such as age, gender, occupation, annual income, length of service, family composition, etc. Collateral valuation is calculated by multiplying the calculated market price by a factor of about 70% (ratio to evaluate collateral lower than the market price). Masu.
Since the collateral is evaluated from the perspective of assuming the event that the borrower goes bankrupt and the collateral is auctioned, it tends to be cheaper.
When lending beyond the collateral valuation, it is determined by how to put other real estate as co-collateral and creditworthiness of the borrower.If you are a manager, the financial situation of the company, if you are a salaried worker, it is deposits and savings, the size of the company, and the number of years of service.
Summary
- The standard down payment to prepare for real estate investment is 1 to 3% of the property price
- If the attributes are good and the property has high asset value, a small down payment is possible
- Loans are possible without a down payment as long as there is appropriate collateral
- If your own funds (assets) are zero, a real estate investment loan for an apartment building will almost never pass.
At Rich Road Co., Ltd., we will consistently support all aspects of investment real estate, from complete beginners to experienced people, from a wide range of real estate selection, loan consultations, post-purchase management, and renovations.
