Forum Replies Created
Hi there – I wonder if your post "headline" is appropriate!! I am sure many people would like to have a property in London and be faced with the same "predicament".
Moving right along……I have made the presumption you are based in Australia and that your primary income is from the work you do in Australia? If so, you have already done well so far to have a mortgage in the UK (did you work in the UK previously?).
As you mentioned one way is to basically take the spot rate on any one day and arrange for the funds to be sent across (which then creates two issues – whether to convert to AUD while funds are in the UK, or send in GBP and have converted to AUD on arrival in Australia). While those two options seem minor, in fact they can mean significant costs or savings, particularly with the large amount of funding that is proposed to be sent over. It would be wise to do some "dummy" investigation and check conversion rates of UK banks and Australian banks, and the costs involved on the basis a certain amount of money was being sent.
Where you mention you have re-mortgaged does this mean you have actually drawn down the additional loan, and that it is sitting in another bank account ready for repatriation? Or do you mean you have an increased line of credit available to you that may be available to you to use?
My suggestion, and it would require a bit of investigation, would be to not get involved with the physical transfer of funds. If you transfer funds inter-country, you create an immediate FX risk which is what you are concerned about.
Perhaps if you looked at borrowing locally, from an Australian lender, or better still, a lender in the UK that has affilliations with Australia (ie a UK parent with a subsidiary or office in Australia), then the UK bank could simply provide a bank guarantee or letter of credit to the local lender. Of course, the local lender would need to be satisfied with the security offered, but should be manageable particularly if you already have an existing relationship with the Bank, other securities, etc. Ultimately the main thing the local bank will need to be satisfied with is your willingness and capacity to repay the local debt, and if this aspect is assured, then the security(ies) on offer should be acceptable to them (eg A letter of credit/bank guarantee from a UK bank with high credit worthiness).Using a letter of credit/bank guarantee removes any FX risk for you. If things go belly up, the UK bank simply sells your UK property, and the local bank makes a claim from the UK bank.
Simple really!!
Good luck – David
Buy Hold Never Sell
I like the strategy.
We have come to Sydney from Auckland – been here 18months and it took me a year to “get used to” the prices here.
Much of our time has been spent researching the market.
In our view, the market has carried on its growth pattern on unstable economic foundations. I am for one actually looking forward to a rise in rates, as I believe that is what the market needs.
Unfortunately the strength of the A$ is not making it easy for the RBA to increase rates.
For the time being we are going through the process of getting our borrowing and tax structure sorted out. We have a beachfront property (scarce asset) in mind as our first purchase, which will be a investment holiday rental.Our strategy is to buy investment properties going forward, but not just at the moment. An increase in rates WILL bring better opportunity to patient investors we believe. Sometimes the hard part is just being patient and doing nothing (except research).
Why buy and then sell investment properties?
It is okay to “trade” development properties, or property you have refurbished with a view to flicking on at a sizeable profit – however the key here surely is to maximise profit in the shortest space of time.
It makes sense to me, given onerous CGT implications, that if you want to sell something, sell your own home. That is what we would plan to do in time – buy a home for your own occupation, and trade it in every few years (assuming it is profitable to do so).
I am learning so much in this country, but people should be working within the tax constraints imposed by the Federal Govt, and using it to maximum advantage. Think smart.
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The Rank group is owned by G. Hart a self-made millonaire in NZNot bad for an ex tow truck driver (not many people know that) – but he has the tats to prove it. He has done very very well in the circumstances.
Hello to Forum members – have recently come across this site and think it is fantastic.
I am in the process of reading Steve’s book (amongst others) and think this sharing of ideas forum is great for everyone.
Just my own two cents worth – I have lived in Auckland, NZ most of my life, but now more recently based in Sydney.
For budding buyers of NZ property you may also like to check the property listing site of http://www.open2view.com (I took photographs of houses and uploaded them onto this website in my past life!)
Another reader also mentioned something about ASB (I have worked for them as well!) – I cannot recommend them highly enough. They are a switched on bank when it comes to technology. I suspect problems with customer service will arise with a potential ANZ/NBNZ merger, so would suggest you try and stay away from these two at present.
I would be happy to try and answer questions in relation to NZ if people want info – but I am eager for information on potential areas in Australia that we should research for investment. Email is totcars at bigpond dot com – Cheers David
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