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There may be a shortage of student accommodation, but they aren’t in a position to pay any more for it. There will always be a ceiling.
There are some fantastic products available for people earning income overseas, unfortunately they require significant deposits.
If you saved for another couple of years to have another 80k you could seriously look at a product like this
http://www.exfin.com/foreign-currency-mortgages
Using this type of facility would result in extremely low interest rates (1.68% for USD loans for example).
Another option may be looking for investors that are seeking access to funding in USD but wouldn’t qualify on their own as they don’t have a USD income. They could provide a deposit and you meet the serviceability requirements.
Lets say for example that they have an investment property they wish to fund in USD. You could jointly purchase both that property and the one that you wish to buy for yourself. They provide the deposit and you obtain the loan at 1.68%.
This would ideally work best if there was another sharemarket crash in the next few months which would cause the AUD to crash again. Then you would have huge gains in time as AUD regained strength. This is known as a carry trade. Those people who are lucky enough to have access to finance to do these deals are making a killing at the moment.
Could you please post the site.
I get regular updates from Phil Jones (a kiwi now based in US) who is a strong advocate of these sales, are these tax liens?
Interested to hear from those that own in Dysart and Moranbah now. I am seeing rentals now at $500 a week to rent them out.
Can anyone tell me what was so special about Port Hedland and Karratha that make them $800k + homes that rent for so much consistently? Is there a lack of land for development? I’m trying to understand what the key features are to pick the next hot spot.
Thanks,
MattHave a chat with Richard Taylor, he will look after you. He is an active member on this forum and does many of these deals in Queensland.
Niice work Matty, what were your expenses on each and how much of the work did you do yourself?
I am a kiwi living in Sydney. I currently dont own property in NZ though. My understanding is that it is easy for an Australian Resident to get finance in NZ. All of the major banks there are owned by the Australian Majors. The best mortgage deals come from NZ government owned Kiwibank though. Interest rates are comparable to Australia.
I would suggest talking with Matt Gilligan at Gilligan Rowe and Associates in NZ. He is an expert on Australia / NZ property investments and seems a good guy by all accounts. There are actually some further advantages that he can talk you through, as you are able to claim depreciation both in Australia and in NZ.
For further details on the property contact the number provided, I have no links to them in any way.
Cheers,
MattOver the next 5 years don’t count on 5.5% interest.
Based on your $90k deposit requirement, you would only be making a cash on cash return of 9-10% if clearing $8,500 p.a.
Here is a deal in NZ for $205k in a very good central location, returning $489 per week. It is a 3 bed so you wouldn’t have the same problems financing as over 50 sqm (also no LMI, capital gains tax or stamp duty). Just guessing but would probably require a 10% deposit.
Also guaranteed tenancy for the next 12 years with no vacancy.
Its located a few doors down from the Reserve Bank of NZ (No. 2 The Terrace) so really is a premium central location.
Your 5 year fixed rate is actually great. They are currently sitting just under 8%.
Mortgage brokers, is there any way to sell the property with the mortgage attached at 5 yearsfixed for 6.64%? Then you could get a good price and the buyer will feel they are getting a great deal.
Alternatively you could look for a buyer that wants to do a wrap deal on a fixed interest rate for the next 5 years.
If the property is worth $320k you could sell it to them at $340k on low deposit (i.e. just the FHOG) even if they have no savings (in which case a bank won’t touch them). Provide them the finance at 5 years fixed at the current bank rate around 8%.
Key advantages for the borrower
1. by borrowing through you there is no LMI (likely to be 5-10k on this property) and
2. no stamp duty until they settle their loan with you
3. wouldn’t have been able to finance through a bank and are actually getting the same interest rate for the first 5 yearsAdvantages for you include:
1. They pay the rates, insurance etc
2. you get the sale and a now positively geared property
3. you can still claim the depreciation
4. you dont have to pay land tax
5. you are getting 20k more than the property is worth today and the interest rate differential on the extra 20kIf using this strategy you should draw down on the additional equity in the property before onselling. (You may even be able to demonstrate that it is actually worth $340k as you have been offered a contract at that price)
Sounds like it could work well in your position
Cheers,
MattI’m not an expert, but if there was nothing in writing stating that if you didn’t exercise your option to buy, that the owner would pay your costs, I don’t think you have a case.
It would be like entering into a long settlement contract to buy an old run down house, spending money to improve the value of it, but if you never settled, you would have no recourse to claim for the improvements.
There was an opportunity to take advantage of your option to purchase and make money on it, just by lining up another buyer to settle on the same day that you had to. You missed that window of opportunity.
Hi Joshua,
If going for an alfresco area, some designs are much better than others.
The best that I have seen have bifold doors which open up on both sides and tend to come off the kitchen, creating real indoor outdoor flow.
My favourite one that I plan to include in my dream house when I buiild it, has the bifolds on the exterior walls of the building and tiled floors, with a casual dining area. It allows you to still use the area when it is wet and cold for dining in, but also gives the same look and feel when you open it up and a fantastic indoor outdoor flow. Even if it costs an extra $5k to do this (on top of the $10k), it gives your house real wow factor and would easily pay for itself. I can send you photos if you want of this.
Don’t expect to be able to unlock any equity early however. Initially the bank will only value for what you pay, no higher.
As a building designer, are you doing this as an owner builder? How much are you paying per sqm for the total build cost?
What are you hoping to get out of it, if you don’t own the land? Are you just trying to stop the owner doing what you had planned to do?
Thanks Sapphire, interesting reading.
I’m curious to know if you were aware of these great deals before they happened, or have just been reading about them after the event in the newspapers? There is a big difference between having the opportunity to purchase an amazing deal and hearing about someone else’s that you never got to hear about in time.
As a Kiwi the best thing you can do is to set up their kiwisaver account with a free $1,000 courtesy of the NZ government. See details here http://www.kiwisaver.govt.nz/new/situation/under-18/
By the time they are 18 it could come close to paying their university fees if invested well.
You can also make further contributions as the parent over time. Under the current rules, there are tax advantages AND they can withdraw from their kiwisaver account to buy their first house.
Have watched the video Joel, great job and a very good investment.
It actually struck me that it didnt look that bad a property, just needed a few key things done to it, that made it look great at minimal cost. It made me rethink what ideal renos should be like.
Does your budget include all purchase costs? i.e. bank loan setup fees, interest holding, legals, stamp duty etc or is that only the cost of materials?
How long did it take you to find the right property that had a significant profit?
Thanks,
MattYes I have seen this before. Looks like we are just about to hit the second wave. Was also just reading about Japan’s huge public debts. Really scary to think what will happen the next few years.
If you cant buy cashflow positive with interest rates this low, you are looking at buying the wrong property. A bank wont lend more than a property is worth.
interest rates increasing is a certainty, the higher they go the lower prices will be. better to not buy and have interest rates go up significantly, than to buy, get stuck unable to afford the mortgage and have to sell into a weak market as everyone else that bought with rates at lifetime lows also gets jammed.
Great work Kazwood. Do you have a trades background? I would love to do this myself but with no experience would be concerned about stuffing up the order and timing of the build.
Where did you build, what size was it (sqm) and what was the total cost (including site works etc)?
Very interested to hear.
I guess the alternative could be to hire an experienced project manager and get them to engage everyone at competitive rates.
I imagine they could do a number of builds at once… perhaps 20-30k to see through to completion? If they could save you anywhere close to $150k on a $300k build it would definitely make it worth while.
Has anyone done this?
Thanks,
MattBuy in New Zealand, no LMI, no capital gains tax, no stamp duty.
