Adding a minor dwelling to a property is a great way of adding value and improving cashflows.

Converting garages to granny flats or sleepouts, sub dividing back sections, dividing a house to become 2 residences are all ways of adding value. You already own the land so you then only have to do the figures on the building costs. Just ensure…[Read more]

The question you have to ask is “can the existing system be repaired?” If it can and you replace it it is a capital expense which must be depreciated. If it can’t be repaired and you “up grade” the system it is also a capital expense.

If it can’t be repaired and you replace it with the same you may get it through as repairs and maintenance but if…[Read more]

Hi Wayne,
The right of renewal option allows the tenant to renew under the same terms and conditions as that set out in the original lease provided they have complied with those terms ie paid the rent, looked after the property etc etc.

The lease normally has a rent review clause in it which will determine how the rent is reviewed eg in line with…[Read more]

Chattels that appreciate could be antique furniture, art or sometimes you just get a good bargain and end up selling the chattel at higher than cost. These are anomalies though. The common depreciable asset that appreciates is the building itself.

Cheers
Jeff

Perhaps they should tinker with the oil prices instead of interest rates. That way I could go back to diesel heating instead of chopping firewood.

Cheers
Jeff

Tip: Tomakin, a coastal town on the south coast of NSW is about to boom

What have you got for sale in Tomakin Yorker?

Jeff

Empty banks make good pubs and cafes

Make sure the sale price is not based on an over inflated rent. It won’t leave any room for growth

Cheers
Jeff

Hi Wayne

5+5+5 lease means an initial term of 5 years with 2 further rights of renewal for 5 years at the tenants discretion.

Cheers
Jeff

In NZ residential property is exempt from GST however, rates, insurance, repairs and maintenance will include GST and cannot be claimed back.

Commercial property is “Zero rated” for GST if it is a going concern. A certain percentage of the property must be rented in order to be a going concern.

If you are a commercial property investor I suggest…[Read more]

I do agree Yack, soft landing not hard landing.

The problem with NZ is one of the highest rates in the Western world (NZ 6.0%; Oz 5.25%; US 1.25%)and inflation largely affected by oil prices.

With increased interest rates comes increased NZ dollar. A high dollar makes exports less competitive. Lower exports hinders growth. Low growth stalls the…[Read more]

The Diminishing Value method will give you more money in the hand in the first few years. How wisely you use this money determines the real advantage.

I use DV on all chattels. If you try to maintain the standard of your property throughout you will probably end up replacing certain chattels before the end of their useful life.

The cost method…[Read more]

This may sound stupid Diane but have you tried asking?

Firstly you need to know if the vendor is prepared to leave some money in the property, then, how much he/she is prepared to leave in, for what time period, what security would be required if any, and whether or not they want some interest on the monies left in.

If you can agree on the above…[Read more]

Hi G7,
I take it you’ve found a house for sale and want to move ot onto another block.

First you will need to ensure it can be moved onto the block of land you have. Contact the Council as a starting point. Ask about zoning, permitting and other requirements.

If you contact a house moving company they will generally give you a price to move the…[Read more]

Storage units are a growing market. There are various types for example: domestic storage for you average renter or people between homes etc; commercial/industrial storage; and vehicle storage.

Location is important in relation to your target market which is something you’ll have to assess. Easy access and security are also factors. Remember…[Read more]

I remember 1989 – 1995 when property prices were not moving much at all. This was also a period when I was buying heavily.

That period saw a drastic decrease in interest rates so cashflows improved while property prices had a delayed reaction.

The next 5 years will be different to that period but there is still a bargain in every market.

I will…[Read more]

Sustaining a competitive position in the global marketplace – and retaining successful companies, is reliant upon clearer financial and economic incentives – which the New Zealand government has still not addressed.

Spot on Michael, but one thing about Helen Clark the Prime Minister, she will never be late for a Rugby Test – especially when it’s…[Read more]

Yack

I would love to see a loan product where the upside is fixed ie. cannot go above that figure but you get advantages of decreases in rates. eg. fixed rate = 7.29% but if rates go down your rates too goes down.

There are products called “capped loans” which is what you are referring to. They are available in NZ, I am surprised you have not…[Read more]

Look at it from the tenants point of view, if you raise the rent – will the tenant be able to find somewhere as good and as cheap? If not the chances are he probably won’t move out and accept the rent increase.

The rent is probably low because the vendor has been a little soft, may even have become too friendly with the tenant. As Minimogul…[Read more]

Great Pig

Another did his PhD but then went on to become perhaps NZ’s most well-known property guru. I took the middle line and ended up working within my field of study (electrical engineering).

Is this man the reknowned “Dolf de Roos” who has never had to work for wages in his life?

Regarding the equity question I treat each acquisition…[Read more]

You would probably have a number of options regarding building. What you need to do is determine the cost of each option and the return you will get from each of those options whether it be by renting or selling.

eg 1 dwelling, 2 dwellings, units, commercial ??

It depends where it is and the particular zoning as to what you can do.

Cheers
Jeff