Investment Property in Wellington - New Zealand

Viewing 4 posts - 1 through 4 (of 4 total)

Kavi
Participant
@kavi
Join Date: 2014
Post Count: 18
October 27, 2014 - 1:57 pm
Much appreciate if someone could please advice me on the below situation,
I bought a 3 bedroom brand new house in Wellington NZ last year(2013) for $391000 with a 95% of a bank loan (5.95 % +0.5 % interest rate.). Currently I am paying $2350 monthly repayment for the loan (Capital+interest)
At the moment I am planning to move to Melbourne and leave this house as an investment property. According to local property managers weekly rent would be around $450 per week for this property(agent commission around 10% including
GST)
Monthly Income = $1800
Less expenses – 2350 (mortgage) – 150 (Insurance) – 180 (commission) – 170 (rates) +50 (maintenance)
= $2900
Loose = NZ $1100 per month
I can diffidently absorb this loose with my personal income and I believe I will get a good capital gain on the property in long term.
I will be able to top up the loan to bring it down to around 80% in future if needed. (this will then reduce the expenses)
Do any one think this will be a good plan. My main concern is about running this on negative in the beginning …
NB- I dint take tax implications at this stage but there will be some tax benefits as well.
Kavi.
Lin
Participant
@linwood
Join Date: 2014
Post Count: 1
December 18, 2014 - 12:06 pm
You are loosing 3.3% per annum just to keep the property. Unless you have particular reason to think that where you bought it will go up substantially in the future, it does not sounds like a good investment. You could try to top the loan so that at least you go in a cash neutral position. Is a strategy that could have worked well in Auckland or Christchurch where prices are going up 10% pa, but not in Wellington.
Kyron Gosse
Participant
@roadhog260
Join Date: 2011
Post Count: 7
December 19, 2014 - 8:48 pm
I agree, Wellington isn’t particularly known for its capital growth. Did you buy it as a home or IP, and how long are you planning on living in Mel for? What would the property sell for?
Kyron Gosse
http://www.kyrongosse.com
Build Wealth, Create Freedom, Do Awesome
Kavi
Participant
@kavi
Join Date: 2014
Post Count: 18
January 23, 2015 - 4:44 pm
Thanks Lin and Kyron! Finally I sold the property in Wellington and moved permanently to Melbourne. Currently I am looking around Melbourne for good investment properties :)