Hi again Purse,

Unless you want to become a forex trader it’s best to borrow as much of the investment in the local currency.

For vast amounts you can explore the options of hedging your currency swings but that can be costly.

Cheers
Jeff

Hi Luke,

Yes, both interest on the LOC for the amount of the improvements and the depreciation are deductible. Assuming of course your best option is to borrow the funds in the first place.

Cheers
Jeff

It’s commercial, paid $89k in 1991, net rent $12109 pa until 1998, $20k pa until 2001 and now back to $8900 net pa since talk of the roading changes.

It paid itself off and owes me nothing, last valuation was $110k. Great cashflow but lousy capital gain. Without the roading changes I’d be getting in excess of the $20k pa.

Does that help your…[Read more]

Wezwaz,

The registered valuations are determined by historical evidence, that’s the problem, they’re historical.

The banks and lending institutions require registered valuations as a reputable and consistent benchmark to satisfy their lending criteria – it’s their safety net.

As property investors we have to look at the future and your method…[Read more]

As property becomes further out of reach for first home buyers and the like, there will be an even greater need for rental properties.

I agree on net cash figures – the exception is depreciation as it is non-cash.

If you can determine a net taxable return then you can work out internal rates of return for comparison.

Your money has to be working best for you.

Jeff

Sorry Purse

No it is not all leasehold land and you can get freehold. My uncertainty is what will happen to the township once it is bypassed – it may thrive or it may die. They might even be good towns for wraps.

Ngaruwahia is very close to Hamilton and could well become another suburb. There’s a big dairy factory in Horiutu which is close…[Read more]

Olly Newland is publishing a new book due out in June 04 – “The Day the Bubble Bursts”

Look in http://www.empowereducation.com

This will be worth a read.

Cheers
Jeff

It’s a liability insurance taken out to protect director’s and officers of a company in case they get personally sued during the course of their employment. Often includes a number of exclusions.

Were you thinking of taking out a policy for yourself?

Jeff

Hi Pursefattener

State Highway 1 is supposed to be bypassing all those towns but I’m not sure on the time frame, check out Transit NZ’s website.

Huntly has a redundant coal power station with some mention of it being re-opened everytime there is an electricity shortage.

This is Tainui country so I’d advise you to stay away from any Maori…[Read more]

It depends who owns the chattels. You can’t depreciate something you don’t own and same for the business owner.

All my properties have the chattels separated from the building value and they are depreciated at different rates, hence a bigger tax saving.

If you do own the chattels such as grease trap etc you will more than likely require a…[Read more]

There’s a bargain in every market you just have to be a little more careful. It’s the people who don’t do their homework, buy overpriced and borrow beyond their means that are the first to get hit.

One point of difference with property as opposed to the sharemarket is people still need a roof over their heads. You can batten down the hatches and…[Read more]

The hard part about positive cashflow is it all sounds good on paper however, people need to live.

So you need to create a cashflow in excess of what you need to maintain your lifestyle. Those dollars over and above this should either reduce debt (especially with rising interest rates) or applied to more positive cashflow.

The rule here would…[Read more]

Imnteresting topic Philip,

Perhaps a turn in the cycle is due. The interesting thing about investment is that usually, when all men and sundry start jumping on the bandwagon you’ve literally missed the boat.

While eroding capital and even negative equity occurred back in the late 80’s early 90’s there were still bargains to be had. Those who…[Read more]

Hi Aussiemike

You failed to take into account council rates, insurance, property management commission and possible repairs and maintenance. These are all cash expenses which effect the cashflow – depreciation is a “non cash” expense, it effects profitability but not cash flow.

Cheers
Jeff

Hi Wezwaz

Most evidence of 10% + yields are going to be historic – the deal having already been done.

Sometimes, or should I say most of the time you have to create a higher yield by adding value or by buying at a significantly low price in the first place.

A property for sale may not be advertised at a 10% yield but by being able to tweak the…[Read more]

Thanks for that Mel,

Jeff

Hi Misty1

There is a minimum level of rent you will require in order to settle early and have them stay on as tenants ie to be CF +ve. If the current owners are not prepared to meet that level of rent and you are not putting in a substantial deposit then aim at delaying the settlement for a suitable length of time for you to get tenants etc.…[Read more]

Monitoring your property assets should be the same as if managing a share portfolio, perhaps not quite as regularly though.

This raises the question of “eroding capital and possibly negative equity”, something that did occur in the late 80’s ie post 87 crash.

As Steve put it you must ensure you have an exit strategy. Constant monitoring would…[Read more]

Marissa posted that her computer had detected a trojan, has she looked at this site?

Should probably delete Darkness as well

Jeff