Hi.
Hey Zen, you are completely correct. I most likely couldn’t get the same results if I started today, that’s why I’m not starting today! and also why I have cashed up my IP’s. The great thing about residentaial property is that there are ways of completely eliminating your risk,(buy +cf in good areas where the demand is certain, etc.) The mistake some investors make is that they fall in love with their investments.In my view an investment is there to work for you, once it has done it’s job it’s time to move on.

Hi all.
I’m a kiwi (don’t hold that agaist me!) and have just sold all 10 of my IP’s. Not that I have lost faith in res property, I just think it will be a long time before we see any real captial gain after two very strong years. Most of my properties had doubled in the last 18 months so I’m taking the gains (tax free) and looking at other investments. My advice don’t expect CG for the next couple of years and you won’t be disapointed.

Hi HappyBandit,
Your question really is “how can I recycle my deposit ?”
when buying property I look firstly at how quickly I can pull the total money invested back out again, then after this I look at cash flow.
The easist method to do this is to buy under market value or a property that can have value added. Borrow 100% of the purchase price using a LOC secured against another property (PPoR), then after getting a valuation at a level above purchase price a mortage can be obtained at this level, releasing your LOC account to go again.
This truly is quite easy, Have fun and keep asking questions.

Hi Kay,
In NZ properties that meet my 2.5 rule can still be found quite easly !!! it’s just a matter of picking locations that will give low vacancies and better growth prospects. Happy hutting[]

Me too, thanks a million ross.katrina(at)xtra.co.nz

Hi Sue,
(LIM) = land information memorandum. A LIM is availble from the local district council and contains info concerning the property ie rates, water charges, stormwater drains, concents, certificates and any special features or characteristics that are knowen to the council.
Cost = $200-$300 and take 5-10 days.
Forms an important part of Due diligence

Hey Bear,
You can add Value by 1001 different ways, the more “bang for your buck” the better. Mow the lawns and tidy up the grounds is a good start, paint ( talk to a paint shop about mis-tinted paint, it’s cheap), carpert, carport or I’ve found getting a decent tenent with good furniture always makes the place appear much nicer so in turn increases the valuation.
Here’s some numbers
Purchase price $90,000
renovation $ 7,000
Total costs $97,000
borrow this amount from LOC. Then reno and get valuation eg $120000 Now finance at 80% = 120*.80 = 96k .Deposit 96,000 (from the new mortgage) into LOC ,The result is a property purchased with $1000 of your own money, $96,000 banks money .No re finance, No tax issues, No limits, No sweat .

Lazyboy

Yes I use a LOC over my PPoR to buy IP into, I add value then mortgage the property to pay back the LOC account, then buy next property into LOC. The advantage of this is you can act quickly when you see a deal you like and it keeps your equity revolving.

My pick is that they will leave it at 5% untill end of Jan, But with the Aussie going another .25 it will put even more pressure on . Inflation is not a problem at present, so the only reason they will lift it is to slow the property market down

Hi Rebecca,
I’m not for or against ESC. Give us some FACTS on why, In your books they are so dodgy !!! Or is it just your OPINION ?? I have researched afew of their deals in my own area in NZ. While I have not purchased any, they aren’t too bad either (I do know this market as have brought 9 properties in the last 12 months)

Lazyboy