Confused about mixed-use properties and what they are?
  • 21 Aug 2020
  • 5 min read
  • By James Hawes

Mixed up about mixed-use properties?

Mixed-use properties, Buying, Investing

As mega-retailers and big brands continue to struggle throughout COVID-19, are boutique business opportunities on the comeback? Mix it up with a residential offering in the form of a mixed-use property and you might be onto a winning combination!


Two-for-one deals are normally reserved for the retail space. You know the kind: Price drops where the price actually goes up; buy-one-get-one-free deals that leave you out of pocket; and, special offers that are anything but...however, whilst retailers across the nation phase this antiquated marketing gimmick, it's kicking about in other industries - such as real estate.

"Surely, not?" I hear you say. It's not to say you'll be nabbing two homes for the price of one (although that can sometimes happen), but rather, some properties come equipped to act as both a home and business. Take for example the classic upstairs apartment above a street-facing restaurant, café or boutique. Or perhaps it's a freestanding home that uses one area as a shopfront, like famous Childers icecream shop, Mamminos. Most hostels and agricultural properties also offer space to live and work on the same plot of land.

When coronavirus reached our shores and unemployment levels suddenly soared, the autonomy granted by self-employment became highly sought after. It's easy to imagine many wishing to begin their own business. And doing so with an outlet that's also your home is an increasingly popular way to go about it.


Starting any business is difficult. Starting a successful one doubly so. Which is why it's important to play to your strengths and choose a venture that matches your know-how and experience. For example, if you want to open a cafébut can't make a lattéto save your soul, either hire someone who can or consider an alternative vocation. Once your plan is set, it's time to shop around - and this will be a long process. "Location, location, location" is the mantra, and it applies twofold in this instance. A great business in an awful location doesn't stand a chance, but living in an industrial complex isn't the ideal scenario either. Patience is key. Settling for a sub-par property will always result in disappointment. It's an even harsher reality when your home is also part of the equation.


SEE ALSO: Are Bed & Breakfasts on the Brink?

Mixed-use property loans also tend to be more difficult. Whether you'll qualify for a home or commercial loan will depend on how the property is zoned and the inclination of the lender in question. Just as it's vital to spend time shopping around to find the perfect property, it's necessary to do the same with your financing arrangements. Commercial loans are generally considered to carry greater risk, so they have lower loan-to-value ratios (LVR), higher interest rates and shorter terms. If commercial loans are all that are available for the property in question, it still pays to shop around and compare all available avenues.

Exactly how much can be borrowed will depend heavily on the exact nature of the property. If it's a typical house, for instance, and can later be returned to its original resident-only state, then LVR will typically be as high as 90% - similar to any home. If not, such as in the case of the upstairs apartment and downstairs shopfront, the maximum LVR can be as low as 70%. For rural properties like commercial farms, you'd be lucky to borrow more than 60%. As ever, having the biggest possible deposit will increase buying power.


While not always the case, mixed use properties are often found outside major metro central business districts, nestled among other residential properties in suburban neighbourhoods. As a result, relying on proximity and foot-traffic for business might not be enough. Instead, it's important to become part of the local community, get to know the neighbours and tailor the business and its experience to them. Understanding the area is vital for ensuring your business has a fighting chance. Opening the fourth café in the same street isn't ideal, but opening a vegan restaurant in a neighbourhood fond of its veggie gardens and plant-based diets may be the thing that strikes a chord with your target market.

There's certainly something idyllic about the prospect of operating out of a small space right below your home. If your dream is to own the bakery from Kiki's Delivery Service or the barber shop from Sweeney Todd (less advised), then investing in a mixed-use property is a step closer to making that a real possibility. Like all financial ventures it demands proper planning, discipline and clear goals, but it's an enviable lifestyle that‚'s most certainly achievable for the right buyer.

Important disclaimer: This article is provided for general information only, and the author is not engaged to render professional financial advice or services through this article. Readers should satisfy themselves as to the correctness, relevance, and applicability of any of the above content, and should not act on any of it in respect of any specific purchase, investment, or other financial activity without first obtaining their own independent professional financial advice.

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