Hi Suzette,

Often, changing the nature of a property can be very lucrative. In your case, possibly from residential to commercial or possibly for future development.

I would enquire as to what commercial activity could go there and what sort of rentals they are paying on a square metre basis. The location is important as you would need growth in…[Read more]

You might have lost me on your figures

Property value $100k
Current Loan 80k (80%)

Use LMI to goto 90% gives you an extra $10k for a deposit.

Cost of this is 1.5% or $1.5k leaving a net of $8.5k

Deduct another $1.5k to goto 90% of new IP leaves net $7k. This means you can spend upto $70k.

I think you’ve increased your portfloio by 70% and…[Read more]

I doubt you’ll buy the property with only a 10% deposit unless you can do some creative financing eg vendor finance, equity partner, cross collateralisation etc.

Recalculate your figures. If the deal is any good try putting in an offer with a longer due diligence clause then try flipping it. Alternatively your contract could be subject to putting…[Read more]

Hi NLW,

Just think, one day you are going to die.

Best you get out there and do the best for yourself as quickly as possible. Fear of failure is the biggest cause of lack of success.

I remember talking to a guy who wanted to become a lawyer. He said I want to study law but it’s 5 years and by the time I finish I’ll be 36 years old. I said to…[Read more]

Hi Muppet,

I am quite well exposed to the Rotorua property market. It’s one of the few towns I still own residential property in. Will be down there this evening so will check out the progress on the Bunnings site on Old Taupo Road.

Cheers
Jeff

Hi Guys,

Didn’t Carter Holt announce a massive upgrade to their mill in Tokoroa recently? I thought it was late last year.

Muppet, you might have better knowledge of this being closer to the action and all.

Cheers
Jeff

Hi FM001,
Managing a tenancy yourself can be a rewarding experience and a great big learning curve. However, if your career goal is not to be a property manager then leave it to the experts.

When your portfolio becomes sizeable enough you will learn to treat it as a business. You employ the relevant staff and/or professionals to do the day to day…[Read more]

My second IP will bring in $320pw rent but my repayments will be $328pw, I know not much differece but do you think this is a good investment? My first IP however brings in $270pw and my repayments are $212pw so this will cover both.

This is a BIG problem. You’ll have 2 vacant IP’s.

The way to resolve this is to buy 8 more tenanted IP’s with…[Read more]

Hi Muppet

Yeah, the dog box – that’s happened before.
I actually thought my key didn’t fit but it was a stick pushed through the keyhole from the other side.

Jeff

What type of tenancy is it?
How many other vacant properties are there in the area?
What else can the building be used for?

I suggest you speak with the tenant to see if they can stay on (assuming their business is a viable business of course). To get an extended lease you may have to offer a carrot but that’s all about negotiation.

If the vibes…[Read more]

There has often been talk of introducing capital gains tax on property in NZ. It’s a bit of a political football and often used to distract us from the real issues.

At present CGT is not on the agenda but the Labour Govt is reviewing submissions on the officials’ issues paper “Repairs and maintenance to the tax depreciation rules”

Cullen seems…[Read more]

2. It can be an entirely separate room about the same measurement as above.Either can be built on piles(stumps) or concrete. Again with a toilet and shower, enough to be <u>entirely self contained.</u>

In NZ you usually find a “sleepout” cannot be fully self contained. If the sleepout has full kitchen facilities it can be classed as a separate…[Read more]

2. It can be an entirely separate room about the same measurement as above.Either can be built on piles(stumps) or concrete. Again with a toilet and shower, enough to be entirely self contained.

In NZ you usually find a “sleepout” cannot be fully self contained. If the sleepout has full kitchen facilities it can be classed as a separate dwelling…[Read more]

Hi Robert,

One of the major pitfalls of a boarding house is you get boarders. They tend to be more transient and less responsible with their money.

On the positive side if you are of the mind set to handle the problems that go with boarding houses then you can make extremely good money.

I presently own a pub with 40 rooms which is being run as…[Read more]

Try another broker.

Generally you’ll find you will always get a tenant for a residential property but there is more insecurity with commercial. Financial institutions are just assessing the risk.

One commerical deal I did I had to get money from a Solicitor’s nominee fund and Mobil Oil was the tenant for about another 8 years. If the deal is…[Read more]

Hi Mark,
It’s never too late to start investing or anything new to that matter. Ray Kroc basically set up McDonalds in his sixties.

Regarding commercial property, each investment will have its own pros and cons. I take it you are looking at offices so you need to research the rent rates for offices in the area to determine what the property is…[Read more]

I require $1million a year in rental income, how many properties will I need.

How many balls of string do you need to reach the moon?

I guess the answer is, only one but it would have to be a big one.

Cheers
Jeff

Valuations are based on “historical” evidence – that’s the science part of it, the rest of it is art.

I once bought a vacant retail shop with the intention of converting it to a restaurant. The valuation didn’t come up to speed making it difficult to finance.

The valuer sat outside the building from 10am to 11 am to monitor pedestrian traffic.…[Read more]

Yeah, there’s still a lot of lease hold land in Bay of Plenty. I’ve had IP’s on 999 year Maori lease land which were never a problem. Then there are the 21 year perpetual leases which demand reasonable ground rent. The last one I viewed had 7 year increases to market – it ended up moving to 8% of land value and that’s too difficult to make work,…[Read more]

Hi Westan,

Sorry about Te Puke I should have elaborated.The place has good growth potential due to its proximity to Tauranga and the coast.

There is more demand for rentals there now as people commute so no doubt in the future there will be pressure on rents.

As far as 10% deals go and do they exist – there is a bargain in every market.

Cheers
Jeff