Forum Replies Created
Hey all,
I have read this thread and there is no answer to some of the questions. As far as NZ tax and Aussie tax implications go … we set up an NZ based Company and trust.– All income goes into an NZ bank account and stays here to cover repayments, Maintenence and to buy more properties.
The way we set this up was so that we did not have to pay capital gains tax in Australia on the sale of the proeprty.
– Total cost was $NZ650 and it took only 3 days … and best of all we did not even have to go to NZ to do this.
If you are looking for a great bunch of guys that set this up go to http://www.masteraccountants.co.nz
This way you can make a more informed decision.BTW … we use ANZ throug ha broker who has looked after us and negotiated good interest rates and repates on legals etc … including waiving setup fees too!!!…
Best of luck.
Kiwi[baaa]Hey Rumin,
You can get insurance to cover loss of income from tennants …. perhaps you should get a good solid policy so you can sleep at night.
Cheers,
Kiwi“A RECORD number of New South Wales families lost their homes last year as growing numbers struggled to meet mortgage commitments”
Hey HB …. Good point here…. however most people should get familiar with how money works and cover all your risks….
What are the risks with owning yourown house?1.Rising interest rates…..SOLUTION? = Set up fixed interest after you have worked out how many interest points you can afford to risk before you are hanging over the bread line.
2. Job security…. SOLUTION? = Income protection insurance….
3. House burns down etc: Solution? = Insurance
4. Servicability changes due to gambling etc…. just don’t do it!
cheers,
Kiwi[baaa]If you are looking to pay your house off quickly then I would suggest browsing over a couple of books by – Anita Bell.
– Your Mortgage and how to pay it off in5 years (buy someone that did it in 3)
– Your money (Starting out and starting over)Every $10 extra paid off your mortgage, saves $1,000 over the life of the loan.
cheers
KiwiYou could rent to own the property of the owner for say 4-5 years.
Pay the landlord $220/week (and you have the right to sublet) and agree on option price of $180K. (more than it is worth now … but hey you have 5 years for the market to catch up)
Put up $5K for option fee…… Then you can apply for a low interest loan to do the repairs, keep current tennants in place and depending on the wroks to be done… perhaps offer a reduction while you are completing repairs for thier inconvenience.
This way:
1. You do not have to apply for a mortgage.
2. Your borrowing capacity does not change as you have not increased your debt levels.
3. you should be able to get the smaller loan on either low interest Ccards or short term loan or increase your current loan to complete renovations.The landlord wins in the following ways:
1. Increase return on current rent by 19%
2. house gets a major upgrade without any cost to him/her
3. gets a higher than market price if you excercise the optoin.
4. $5,000 cash to use TODAY!go for it!
Cheers
KiwiOriginally posted by kiwiduvet:If you can finance outside of NZ it would be better as NZ now has the highest interst rates in the developed western world
Hey there…
This is all good however most offsore lenders will only back upto 80% ….. so if you come fro mthe school of the less money I have tied up in the deal the better … then you can get NZ onf shore lenderes that will give you 90% and you pay around 7.95%… however you have lenders here in Aus that are keen but only to the tune of 80% LVR and interest rate is 9.75% …
Although I do not mind interest rates much as long as the return is good enough to come out cashflow positive!!
Cheers
Kiwi[baaa]Q1:
You can get around CGT ruling if you have set up an entity in NZ and the income stays there.
If you wish to go down that path … PM me and I cna give you a contact that specialises in this type of structure.
Cheers
Kiwi
[baaa]Hey There,
If in NSW you have 7 working days cooling off … so you can get you due dilligence done in that time and still call it off.AS a habilt though it is a good idea to put in offers subject to satasfactory due dilligence as a condition. If they do not accept that then the property is possibly suspect anyway and it is not worth spending anymore time… move onto the next deal.
As for finding the peopple to inspect… I would use a specialist in each field … after all you would not ask a dentist to do a building inspection … OS I would not ask a building inspector to do a pest inspection.
Make sure you ask to see a copy of there current rellevant licenses and insurance cover…. otherwise you have no recourse if you find white ants have eaten half the roof out and are grinding thier way through the bathroom and kitchen. (It has happened to us – though we got a discount on the house + insurance due to pest company not completely getting rid of the vermin)….. still was a headache though.
Cheers,
Kiwi[baaa]you can either… beleive what a real estate agent says … (YEAH RIGHT)…..
Or research yourself to find the truth.
Cheers
Kiwi [baaa]jsut go to a solicitor and they will draw up an option … alternatively there are lots of products out there in the market place with templates for option and lots of other legal tools.
Cheers,
Kiwi[baaa]Hey There,
We did it for our first proeprty… and all was going well until we struck a snag and I did not feel comfortable going it alone in case we were buying a lemon……. However I would do it again as it is not that hard really. DIY Kit cost me $150.00 and the solicitors were avaliable for assitance witht he kit … however not for advice to our particular property we were buying.
Hope this gives a different angle on the feedback you have got sofar!
Cheers
Kiwi[baaa]Derek has some great input there!!!
Heres another idea!!!… or 2
Lets say the property is renting for $175.00/week.
Your so called agent is raking (or was in this case) say $18/week + initial fee of 2 weeks to get someone in there.
That is $1286/ annum for someone to do the job for you.
How about offering an incentive plan to your tennants you could:
Ask them what they would like done to the property (additions or repairs). and in return for making sure hte payments are in your bank ontime every week…. you will reward them with that upgrade.
Or you could find out what things the tennants like to do and offer to give a rewards bonus program for paying the rent on time…. dinner tickets, movies passes, adventure trips … anything … as you have $1286 of play money to self manage it.
hope it goes well for you.
Cheers
Kiwi[baaa]Chris is great and very dilligent in his practice. He has been fantastic assett in my Team of advisors.
Cheers
Kiwi[baaa]Hey There,
I did my complete kitchen and also ran a strip above the bench and also put in stainless splashback.
I simply drew up my design and measurements and then looked up the yellow pages for sheet metal companies.You can get different grades of stainless material and thickness choices make a big difference to the finished product…. if you havea wall that is not straight then go for the thicker option otherwise the 1.5mm will warp to the shap of the wall it is in front of.
The sheets come in 2400×1200 and the grain usually runs across the 1200mm (Most ovens/cooktops are 1200)section (remember this when planning out your pattern if using more than one cut as you do not want hte grains going up and down and sideways.All up it cost me less than $300.00 and looks fantastic … (Will send you photos if you wish to see the final product (Just PM Me).
Cheers
Kiwi[baaa]Originally posted by McHenry:Do you formulate your figures on a price mark up and charge a premium to std interest rates or merely a price mark up funded at the equivelant of bank rates ?
How big a mark up does the market accept ?
Set percent ?
Set dollar figure ?I am looking at properties around the 350-400k mark.
Thanks
Henry
Hey Henry….
To anwer your fantastic questions….
– Firstly … there are no set rules.
The main factor is the strength of the market at the time….
If youa re getting 50 phone calls of interest a day then you can set up a dutch auction and see who will pay the most vavourable for the property.
– Since you are using such a flexible tool … you can taylor the solution to meet the requirements of the Leasee…. your tools of this mix arePURCHASE PRICE,
TERM LENGTH,
OPTION FEE,
WEEKLY PURCHASE PRICE CONTRIBUTION AMOUNTPerhaps run some advertising with different prices or rent amounts and see which you get the strongest response from.
Cheers,
Kiwi[baaa]Hey Benderfile,
Well you found the right place for a sounding board!
Hope all goes well for you and if I can be of assistance please let me know!
Cheers
KiwiHi Henry,
Good Question…..Hope this answers it for you and puts the lights on.
You have to understand the type of market you are attempting to market a lease option to. These people fall into one of these catagories.
1. No Deposit or not enough.
2. Deposit but damaged credit (So lenders will not touch them)
3. People desperate to get into the housing market but currently locked out.Tell em the property has a slight mark up on it (due to you taking the extra risk).
You will find that if you give them full disclosure on what and how you make your money and justify them with the risks you are taking fackoring also that they have limited choices anyway…..
If they are serious they will see that they have no other choice.
I often compare it to the 24 hour convenience store.
“It is the same milk as every where else…. BUT because it is open 24 hours a day the price is higher”… “It is the same house but because we are looking for people with less choices than people with bank funding we have an alternative at a price”Cheers
Kiwi[baaa]Hey There….
Could I suggest a possible start ?????
Work out what you want.Could be
…. freedom from the daily grind
…. Financially free (Passive income = your expenses)
….. Spend more time with your loved ones or freinds.
… to had more spare time so that you have more choices….once you have worked out that crucial part … you need to focus on how you are going to achieve that and then put a time line on it with a plan on what or how you intend to do it.
For example you may perhaps wish to become financially free (step by step)… but have no cash to invest… so you could perhaps….
a. Save some
b. Borrow some
c. Form a joint venture with a time deficient investor
d. Get a vendor to fund part of a purchase
e. Rob a bank (Heh Heh… yeah yeah)
f. set a tighter budget so you are spending less than you earnThere are many other ideas you may also come up with
Once you find an idea that most suits your situation or skill set… then plan how to do it and how long it may take …
Blah blah and so on and so on…. I think you get the point?Just my thoughts on getting started anyway!
Clarity and Focus are the keys … otherwise the shotgun approached may burn you out and you would then even possible give up and throw it all on the too hard basket.
Cheers
Kiwi[baaa]Couple of suggestions prior to committing to a property.
I have wrapped a fewproperties @ over $360K (puchased @ 310K)
There is no fixed formula as you are dealing with some pretty big numbers with repayment and the like….
You need to.
– Test the market by perhaps running a couple of adds (when you get the calls …. you can say that you have one coming up very shortly.
– Remember if youbecome too focused on your profits or one formula… you may have a long time without a deal due to many things including market demand etc.NEVER GIVE UP!
Another couple of suggestions:
find an experienced spotter to do all the work and you setup from there….
– don’t put all your eggs in one basket…
– Don’t sink all your cash into one deal
– Start small (so you can sleep at night)
– Know your limits and build a team around you with the skills knowlege you may lack in.[baaa]Once you gain experience and confidence with all the issues and rewards of Investment properties… then you may decide to go it alone… find JV parners to share risk… or simply keep doing the same thing over and over if you do not have the time or experience.
Best of luck.
Kiwi
