Forum Replies Created
We’re thrilled to hear Steve’s classes have got you all so fired up – it’s fantastic! We’ve been just as excited about NZ property for 3 years now and often feel like a kid in a candy store!
But basically no one can answer those questions about where to invest in NZ except you! There is no one place is better than another solution – each has their pros and cons.
So our only piece of advise is work out your Personal Investment Strategy before you start. What’s your goal – cash flow or capital growth? Are you going to hold property long term or short term? Do you want development potential or not? Are you going commercial or residential? What investment vehicle are you going to use in Australia and in NZ? How are you going to manage your income and taxation (including potential capital gains tax issues for Aussie investors)? The answers to these questions and more depend solely on you.
Once you’ve worked out these you can begin to define your criteria more closely and have your wish list. You will then find when you go looking that areas and properties will self select according to your criteria.
Don’t forget to get yourself a good Australian accountant well versed in NZ property and bilateral taxation treaties. A good NZ accountant and lawyer is also an asset and can save you from costly mistakes.
And one final piece of advice…. do your due dilligence on any potential purchase (this includes inspection, building inspection and LIMs).
Best of luck!
Sigrid de Castella & Antony Anderson
Authors “The Guide to New Zealand Property Investing – Australian Edition”
Available at http://www.kiwiproperty.bizI know everyone is against real estate agents (and often for good reason), but for those unable to get to NZ themselves you can use a Buyers Advocate that specialises in NZ property.
Melbourne based Nigel Kibel is a reputable buyer with a good track history of purchasing NZ property for Australian investors. His web site is http://www.propertyknowhow.com.au
Sigrid de Castella & Antony Anderson
Authors “The Guide to New Zealand Property Investing – Australian Edition”
Available at http://www.kiwiproperty.bizHi Pavlina
It depends who you are using to manage your property and whether they are a member of a professional body (like REINZ).
Usually inspections are done on entry and exity of tenants and again every 12 or 24 weeks, more commonly 12 weeks or 3 months.
You don’t always see the reports, they are not furnished to landlords as a matter of course. They should be on file though and you can request a copy (it’s a good way of keeping tabs on the wear and tear of your property too).
Whom ever you are using you should have a signed property management agreement and the inspection timeframes should be listed in the agreement. It’s a good idea to check that they are doing the inspections on a regular basis – sometimes managers get a bit lax.
Sigrid de Castella & Antony Anderson
Authors “The Guide to New Zealand Property Investing – Australian Edition”
Available at http://www.kiwiproperty.bizCan’t recommend one in Christchurch – but any good NZ accountant can help out. We highly recommend John Phibbs at Lynch Phibbs http://www.lynchphibbs.co.nz for Aussie investors, or Ann Loudon at StreetSmart Group http://www.streetsmartgroup.co.nz for local investors. Both are in Auckland, but they are excellent.
If your Aussie based then you’ll also need a good Aussie accountant well versed in NZ investment – we recommend Stuart Smith of The ASG Group in Melbourne http://www.asgfs.com.au
Best of luck.Sigrid de Castella & Antony Anderson
Authors “The Guide to New Zealand Property Investing – Australian Edition”
Available at http://www.kiwiproperty.bizSteven is spot on with his advice.
And our NZ investments are stand alone – all funds are sourced via a NZ broker who is absolutely excellent at getting money for Aussies.
Now in all fairness it does also have a little to do with your NZ investment structure, and how geared up your portfolios are.
Our experience is that if you are 80% LVR or under and 80% of the rent for those properties will cover the mortgage repayments then it’s fairly straight forward to organise.
If you’re in the need then we can highly recommend that you have a chat with Bruce Patten of Designer Mortgages on [email protected]
Bruce is based out of Auckland but like all good mortgage brokers he can get finance on properties all over NZ.
Sigrid de Castella & Antony Anderson
http://www.kiwiproperty.biz
New book “The Guide to New Zealand Property Investing – Australian Edition”
Available at our web site along with other NZ Resources for Australian InvestorsHi,
Kiwi Property Investor Magazine does do reports on vacancy rates in towns. It’s a little difficult to get hold of if you’re not in NZ but try here: http://www.propertyinvestor.co.nz/
Landlords.co.nz has a useful article which says you can get the vacancy rates from REINZ:
http://www.landlords.co.nz/article1231.html
The article is well worth reading.Also be aware that if you are financing, you may have difficulty getting mortgages in towns of less that 40,000 people as banks see this as high risk investment.
Good luck!
Sigrid de Castella & Antony Anderson
http://www.kiwiproperty.biz
New book “The Guide to New Zealand Property Investing – Australian Edition”
Available at our web site along with other NZ Resources for Australian InvestorsIn NZ there is no certificate of occupancy requirement (although this is likely to change sooner rather than later) and it’s been easy for people to build extensions, units, granny flats, etc. outside the proper building code.
LIMs are, in a way, your certificate of occupancy. So it is definitely the inconsistencies in the LIM or what’s missing that is of importance here.
It used to be quite a simple process to have any uncertified works (i.e. items not in the LIM) certified. But new laws on 1st April this year makes the certifications much more cumbersome and expensive.
Consequently there has been a lot of recent talk in the NZ press about LIMs. Purchasers in the know are tending to steer clear of any flawed LIMs. Bottom lime is this can have a serious effect on the sale price of your property unless you are prepared to foot the bill to get the works certified and make good the LIM prior to sale.
One last thing to be mindful of with respect to uncertified works is that you may have problems getting insurance – or settling on an insurance claim if it has anything to do with uncertified works.
So if you can’t view the LIM yourself, it’s best to have an experienced building inspector do it for you so you don’t get caught out – unless you like to gamble that is.
Sigrid de Castella & Antony Anderson
http://www.kiwiproperty.biz
New book “The Guide to New Zealand Property Investing – Australian Edition”
Available at our web site along with other NZ Resources for Australian InvestorsAs Invercargil investors we must say that what is imprtant is not to put all of your eggs in one basket. Your NZ portfolio should have a balance of high yielding properties (and yes these can be found in Invercargill) and high capital growth properties (in Auckland, Christchurch, Wellington, etc.).
I have to agree with all of Westan’s comments – Invercagill has changed a lot. The biggest problem we have had is with Property Managers who just don’t ‘get it’.
Remember it is a big country town with a countrified mentality and they tend to do things ‘differently’ in Invercargill. So don’t expect big city service or response times because you will be frustrated!
So if you can resolve this issue and you have a good property with little maintenance and good tenants then it’s almost a no brainer and yes, it’s a good place to invest.
Sigrid de Castella & Antony Anderson
http://www.kiwiproperty.biz
New book “The Guide to New Zealand Property Investing – Australian Edition”
Available at our web site along with other NZ Resources for Australian InvestorsWe haven’t received anything of the like so I’m guessing you’re special! All jokes aside I would say that you’ve found your way onto some immigration list that identifies your forwarding address in Australia (e.g. are you having rates notices forwarded to you or something similar?).
I suppose you could solve this mystery by phoning one of them and asking them how they got your unlisted address in Australia?
Sigrid de Castella & Antony Anderson
http://www.kiwiproperty.biz
New book “The Guide to New Zealand Property Investing – Australian Edition”
Available at our web site along with other NZ Resources for Australian InvestorsHi
Yes, the definition of cross lease is “A legal means of facilitating joint ownership of a freehold section of land with individual ownership of the buildings on that section.”
Now thes best place to get a valuation is to checking out Quatable Value at https://www.qv.co.nz/default.htm or commission a valuation from a valuer.
We have a cross leased property in NZ (our others are all freehold) and have had no ‘problems’ with it. Purchase price was slightly cheaper than freehold but this was mainly due to land size as previously suggested.
It’s important to have a good lawyer check out the title though as we discovered that our fence was not in the right spot and our neighbour had quite a bit of our land.
Sigrid de Castella & Antony Anderson
http://www.kiwiproperty.biz
New book “The Guide to New Zealand Property Investing – Australian Edition”
Available at our web site along with other NZ Resources for Australian InvestorsHi Leigh
Did you get the book yet?Sigrid de Castella & Antony Anderson
http://www.kiwiproperty.biz
New book “The Guide to New Zealand Property Investing – Australian Edition”
Available at our web site along with other NZ Resources for Australian InvestorsHi Zucan
There are some great buyers agents around like Nigel Kibel of Property Know How or Karin MacKay of Australian Property Buyers (both in Melbourne but they buy all over Australia and Nigel in NZ). These two are reputable and will tell you upfront whether they han help you.
Whilst research and due diligence are incredibly important so is your need to identify your investment goals. Have you thought about these?
Are you looking for capital growth or yield? If yield, what percent is your minimum requirement? If capital growth is your aim, then how much over what period of time?
If both then what conbination?
Is this a long term or short term investment for you? Do you want to Buy and Hold, Buy and rennovate, etc.
How are you buying? In your own name, company or trust structure? What are the tax implications of doing this if you make a profit? What if you make a loss?
So, I’m not trying to freak you out here just saying that your investment criteria is an incredibly important foundation to you making the best investment decision for you in order to reach your goals.
Wishing you good luck and happy investing (although luck BTW is only where prior preparation meets opportunity!).
Sigrid de Castella & Antony Anderson
http://www.kiwiproperty.biz
New book “The Guide to New Zealand Property Investing – Australian Edition”
Available at our web site along with other NZ Resources for Australian InvestorsYep I’d have to agree with Anne. You need to start the legal process as soon as you can rather that waiting and hoping it will get better – it won’t.
The beauty of having a propety manager is that they do all of this for you, and they vet the tenants which is why we never manage our own properties.
But if you’ve chosen to self manage it’s a much more difficult process to navigate. Contact the relevant tenancy tribunal as they should be able to give you all the information you need. You may need to seek legal advise from a good lawyer if things get nasty.
Depending on the location and condition of your property you shouldn’t have too much trouble finding a new tenant who will pay their rent on time and your stress levels will be reduced.
Best of luck.
Sigrid de Castella & Antony Anderson
http://www.kiwiproperty.biz
New book “The Guide to New Zealand Property Investing – Australian Edition”
Available at our web site along with other NZ Resources for Australian InvestorsYes, Nigel – a small and unfortuante setback for property investors, that’s true.
However for those wanting to know more about this curly topic, here goes. You can still chose straight line or diminishing value for depreciation. Or you can choose not to depreciate at all.
Building, land and chattel values are based on the written valuation at time of purchase (if you get one), if not then the information is usually sourced from NZ’s Quotable Value (and will be some sort of aggregate of your rates notice compared with your purchase price usually calculated by your NZ accountant). QV’s web site is https://www.qv.co.nz/default.htm
The choice not to use depreciation usually depends on how long you intend to hold the property, as the amount you depreciate it by is added to your sale profit (i.e. it reduces your net purchase price and therefore the profit on your sale is higher). So if it’s a short term hold then it’s probably not worth depreciating.
As our NZ accountant said depreciation is only a tool used to defer profit – it does not eliminate it!
Have I lost anyone? There’s a whole chapter devoted to the thrilling topic of taxation, including depreciation, in our book. Otherwise contact your NZ accountant or NZ’s Inland Revenue Department to learn more.
Cheers
Sigrid & Tonyhttp://www.kiwiproperty.biz
New book “The Guide to New Zealand Property Investing – Australian Edition”
Available at our web site along with other NZ Resources for Australian InvestorsBottom line is if you want to take advantage of NZ’s depreciation, and the potential to not get caught with CGT in Australia you need to set up a struture in NZ that will enable you to repatriate money in OZ.
It’s important to understand that according to the ATO any Australian entity or person making a capital gain anywhere in the world is subject to CGT whether or not the monies are repatriated in Oz.
The good news is there a structure that can achieve these goals but it took us 12 months and thousands of dollars to achieve it (and it doesn’t include an LAQC which is what every man and his dog goes on about).
Anyhow there’s a bit more about the different types of structures in our book, but your best bet is to get a really good accountant in NZ who will work with your Australian accountant to ensure the structures in both countries are talored to your needs.
Happy hunting!
Sigridhttp://www.kiwiproperty.biz
New book “The Guide to New Zealand Property Investing – Australian Edition”
Available at our web site along with other NZ Resources for Australian InvestorsCouldn’t agree more – LIM (Land Information Memorandum) checks are essential, as omissions in these can seriously affect your sale price if you want to exit a property with a “LIM defect”.
Best bet if you can’t do it yourself is to get a building inspector to do it all for you – it’s worth the money – but make sure you get someone who is well known for their accuracy and integrity!
Otherwise you can use a property buyer like Nigel Kibel who’s had a lot of success buying for clients.
Regards
Sigridhttp://www.kiwiproperty.biz
New book “The Guide to New Zealand Property Investing – Australian Edition”
Available at our web site along with other NZ Resources for Australian InvestorsSorry Techhowse
Too many late nights and lack of coffee this morning – apologise for the mis spelling!
Sigridhttp://www.kiwiproperty.biz
New book “The Guide to New Zealand Property Investing – Australian Edition”
Available at our web site along with other NZ Resources for Australian InvestorsHi Technowise
There are some great areas to invest in but you will need to focus on a balanced portfolio – combining investments with positive cashflow (usually South Island or smaller towns) with investment which will generate capital growth (large towns, particularly Auckland).
Best of luck.
Sigridhttp://www.kiwiproperty.biz
New book “The Guide to New Zealand Property Investing – Australian Edition”
Available at our web site along with other NZ Resources for Australian InvestorsHi Del
Point taken – our apologies – will be more discrete in future.
Regards
Sigrid & Tonyhttp://www.kiwiproperty.biz
NZ Resources for Australian InvestorsHi everyone
I know I’m coming in at the end of a long conversation here but subdivision in NZ is very different – best option is to cross lease residential blocks with multiple dwellings on them. Commercial is a different proposition.
Rates and contributions vary depending on the city and the council fees involved, and will definitely be more in Auckland than in smaller towns.
There are a lot of traps with this so if you find a good NZ based lawyer experienced in this work he/she will become your best friend!
Having subdivided blocks several times in Oz and having bought blocks in NZ specifically for the same purpose we’re going down this track soon, so if we have any more information we’ll post it.
Regards
Sigridhttp://www.kiwiproperty.biz
NZ Resources for Australian Investors
