hi mad-cat

That’s a bit like asking ‘what the vacancy rates are like in Australia’.!

The answer would be the same – it varies depending on the place.

Check with one or two rental agents in the area as to what’s happening. The last few agents I talked to told me the only ones they had vacant on their books were the most inferior properties for the price (which makes total sense). even inferior properties in saturated markets can be let, if you drop the rent to a competitive price.

In fact talking to a rental manager is a great idea before investing anywhere. What you want to hear is ‘we’re screaming out for rentals’ of a particular type of property – and then you go buy that kind of property and get them to manage it for you.

cheers-
Mini

joy to the world

I’ve done more than 30 property deals this year (for other people) for cashflow positive properties (all in NZ) with our lowest yield being 10.5 percent, but that was in a capital gains area with all the usual statistical indicators, and the highest being as high as 20 percent. The current typical deal is around 12-14 percent yield.

I also did about 10 or so deals last year for myself, my family and friends, while I was still just investing and bird-dogging on my own.

The demand in NZ is high at the moment, which is why you can’t get the yields you got last year – basically there is more competition for the properties, (someone must have been talking NZ up to Aussie investors on the forums or something, HAHAHAHAHA) but you can still get yields and capital gains in my opinion, though like anywhere else high yields can mean less capital gains likelyhood, and conversely, high capital gains areas tend to have lower yields.

but I have found that EVERY area will expect capital gains. let’s say you have a spike and one particular hot spot starts taking off. The people who can now not afford to buy there look elsewhere, which could be the next suburb out (cities) or comparable properties in a completely different market (i.e. Australian investors see a house here for 150K rented for $150 but they can buy the exact same comparable house in NZ for 68k rented for 150 p.w.)

For the time being, and for various reasons such as I know it cause i’m from there, I have connections and teams on the ground and know lots of relevant property investing kinda info on it, it’s close (ish) and I can visit my parents for a tax deductible trip, etc etc – NZ is the only place I am investing at the moment in property.

However this is just RIGHT NOW. Anything could change, and Australia will be very attractive again in the future, I am sure, one just has to wait for the appropriate point in the cycle. Interest rates, demand, rentals, prices, all have something to do with when you buy and how long you decide to hold for. For example doing a short term renovation and on-sell works in an up market but it’s a waste of time in a down one. Buy and renovate and hold for rental returns works great in a down market provided you can hold it for long enough. Because when nobody is buying, everyone is renting, so rental demand goes up and so therefore so do rents and yields. I have done the numbers on one property bought in 1991 and the cashflow yield in year 13 is 130 percent per annum! (it was 20 percent in year one) . This is in one of those classic kiwi towns where people always say (yawn) you won’t get capital gains. But you so do, as the prices in those towns tend to keep in exactly the same proportion to your Auckland etc prices as they always did. Plus your cashflow yields go through the stratosphere in year two. Now I am getting 24 percent cashflow yields in year two, so even though I have had capital gains and that might not go on forever, who cares, because cashflow yields are so strong and will improve over time as analysis of the past 13 years has shown. So it’s just swings and roundabouts. I always try and make my properties ‘painless holds’. this means I try to get the right yield on purchase, and I fix up every single problem first up and /or renovate to ensure that that property is as likely to be ‘sorted’ for a long time as possible. Now there are no problems and it is appealing, I expect that my properties will be continually rented with little maintenance. (and I have achieved that, give or take the odd instance of Murphy’s law. But if you are prepared for your (realistic, not panic-stricken) worst case, then there is nothing to fear, which is a wonderful place to be.

cheers-
Mini

joy to the world

Hi there!

Get a builder’s report and photos, and research (or have someone do it for you i,e, a bird dog) the context of the house in regards to area, demand, neighbours, price, etc etc – there are a lot of other important things that need to be in place to make a purchase a ‘good investment’, apart from the quality of the structure itself.

Steve says ‘money follows management’, and I have to agree. I now realise that the investments I bought in NZ weren’t necessarily good because of the purchase itself, but because of how I managed the investment. Because of the questions I asked, because of the phone-calls I made, because of the discounts I negotiated, because of the relationships I made. Because of the things I fixed and the things I left for later.

It’s the decisions and the way you handle things that make the difference between things going great for someone and badly for someone else – even someone who might even have got a ‘better property at a better price’ could end up buggering up an otherwise perfectly good investment.

Another person could have bought the same properties I did and had a nightmare with them. It’s not the properties! It’s how you solve problems.!!!

If you don’t solve the problems, your investment will go wrong, but it won’t be the house’s fault, it will be your fault!

It is my humble opinion that we are personally responsible for our investments, they are not things that ‘happen to hapless victims’. Forewarned is forearmed, and all that!

cheers-
Mini

joy to the world

As I understand it, taxable income is not necessarily ‘profit’ – because it’s profit minus what you can claim as a tax deduction. But what you can and can’t claim – like for example the difference between maintenance (you can claim) and renovation (you can’t) could be quite subtle which is why you need to talk to a professional – at least once! But no you don’t pay tax twice.
You bring your NZ tax return in on your Aus. one.

cheers-
Mini

joy to the world

Hi there,

Castledreamer and I don’t touch Invercargill for bird dogging for many reasons – one of which is that our good friend and fellow bird-dog Westan has got it covered. I believe he has some properties there at the moment for sale, so check in with him and get on his list.

cheers-
Mini

joy to the world

Ah! Niki is a total fake! Nikki? Niki? can’t even remember how to spell her name. Back of Burke? An Aussie saying that someone from the USSR wouldn’t know. And yeah, the english degeneration is another red flag…as is the ‘accidental’ russian spelling of Aussierogue’s name. HAAHAHAHA Busted!!

now let’s play the ‘let’s guess who Niki is’.
Which of the disgruntled and/or banned forum members with an axe to gring against the holy grail of +ve positive property investing could it be?
Is it a) billfromoz b) bbruham c) neil jenman

The winner gets a…er…um….a glass of water and a look around.

Now on to the real stuff.

“Without growth, cashflow is useless.”

huh!!!??? well explain why people work for wages. No growth there.
Of course cashflow is not useless. How are you going to buy groceries? On growth?

Or, you sell – and then you have cash, but no growth. (see, if you’d had cashflow, you wouldn’t have had to sell.)

or, you pull some equity out and spend that, but how are you going to service the debt? Well, you need cashflow…

I rest my case.

Now on to the next round in my usual rebuttal routine.
Kay henry:

“I used to think this place had so many plants saying how great positive gearing was, that pi.com was a nursery.”

I don’t get how you don’t get that Steve (an advocate of +ve gearing) has attracted a lot of people discussing the merits of +ve gearing on his website.

*ding ding*

Round three:

westan said “People like Minimogul was also promoting NZ as a fantastic investment, luckily some took her advise.”

No rebuttal necessary. Back at ya westan.
those days it just wasn’t DONE to buy in another country. I bought in NZ even before steve and westan. I was even name-checking towns and then I had the real estate agents talking on the news about how ‘someone in Aussie had been talking up the town’ and later the agent told me it was ME!!!!

well, hey – I had been to Steve’s seminar and found those exact magic ratios he was talking about – and BETTER – and DOUBLE – and PLENTY of them! So what was a Minimogul to do? Of course, I shouted from the treetops as loud as I could, ‘OVER HERE GUYS!!!” like mad for a year. It took a while for the fear paradigm to shift, but I’m so glad it has finally seemed to. Westan has done his bit in assisting others in and I am glad that I have been able to too. (and still am!!!)

swells with joy at some of her friends’ success stories such as my friend who is a freelancer and didn’t have enough for a house, so bought a section instead for 6k which would be worth 40 today, a year later. Now she is leveraging that to get into a house!!!!!!!!!!!!*

I was gonna say to Niki, Bikki, Nikki, Sicki, or whoever – you can’t have done what Steve outlined in the book, because otherwise you would have had the same result, instead of an opposite result. for example, buying an overpriced place in a town with a declining population without a builder’s report etc etc is a recipe for disaster. But you know that now, right? And BTW if your Dad has had Sydney houses for years, how come you don’t speak english better?

You are SOOOOO busted.

Hehe

I love busting people.

*bows*

That’s how come I know it’s probably one of the people I busted before.

joy to the world

Hi there,

the first question, what I do is have a NZ bank account both with internet banking and an ATM card. This means you can withdraw your NZ currency in local cash equivalent, anywhere in the world. brilliant. I also have internet banking, which I use not for o’seas transactions but to pay rates and other NZ bills etc online.

You don’t want to be bringing the money back here and then having to get money back there to pay stuff.

I agree with Wilandel – leave the NZ money there and use it to buy more, or add value to your existing properties. Or (if you’re me, naughty naughty, withdraw it in Aus and spend it!!!)

re hooba’s comment “I think it looks good now 1 kiwi = .93 odd aussie, but i noticed it had been down at .74 in 2000. I think comfortable band looks like .80-.90 range.Outside of that the downside looks a bit scary.”

you only really have to worry about it if you are borrowing in Aus (say) and buying in NZ and your NZ income has to repay an Aussie debt. Then if the currency moves in your favour, you’re winning, but if it moves against you, you could consider refinancing in the local currency. Which is what Dolf de roos recommends doing anyway, as a hedge against exactly what you’re talking about – currency fluctuations.

cheers-
Mini

joy to the world

yes, yes, and yes to all who posted after me!

I just hate how FEAR headlines have this kind of attraction for….OK I’ll say it….all the people who aren’t doing anything, who are looking for validation for doing nothing.

“look, these guys are crooks, leading people astray, it doesn’t work, they are hoaxes, I knew it, I am right to do nothing”.

cause we all know there’s a hell of a lot more of them out there (95 percent) than the doers and achievers who actually do create wealth. (5 percent.)

That guy is just leveraging off the fear of the majority. Huh! Oh, as is jenman. by the way.

hey, if I hadn’t gone down the path of finding out stuff for myself and getting off my ass and doing stuff and getting out the calculator and getting stuck into educating myself about anything and everything property-related, hours of phone calls, web research, the whole BIT, i would probably still be a chicken sitting here reading Treed or whatever the hell his name is and going nowhere.

joy to the world

I totally agree! Apartments….*holds up cross and gets wooden stake ready*

I too have read the sad statistics of Melbourne apartments and i wouldn’t imagine Auckland apartments to be much different.

Read this:
http://bulletin.ninemsn.com.au/bulletin/EdDesk.nsf/All/716CA9A406A48FDACA256C170010BF31

“Investors have rushed into new inner-city apartments in Melbourne and Sydney over the past few years, often in the mistaken belief they could make a killing by way of quick capital gains. A comprehensive study of resales of new apartments in Melbourne over the past 10 years provides the most damning hard evidence of the capital growth myth. The new study by property analyst Charter Keck Cramer of the 3000-plus new central Melbourne apartments sold since 1992 shows the average price gain was 1.3% a year after inflation. “

etc etc

And so now you get my armchair reasoning as to why that is. 1) too many built 2) they date quickly and so the resale value doesn’t hold, because people can buy the new ones rather than the two years ago ones….3) they are negatively geared and people realise that doesn’t work, especially when they’re not going up in value because of 4) Basically the more land you get the better the chances of capital growth. Land appreciates, buildings depreciate. So apartments have a small land component in the value and a whole lot of ‘building in today’s dollars’ costs, the highest priced building you will ever get… 5) Strata fees are out of the investor’s control, really 6) depreciation made it seem like a tax break, but in the end a loss is a loss

etc etc etc
joy to the world and my semi-photographic memory which meant I could find that article again…

What I so GET is how when you’ve realised how it all works yourself, you don’t want to be on your rich island alone, you want all your mates to be there too. it’s natural to want to share that with people. OK, not every successful investor is going to have the ‘calling’ to go public with information, and take it as big as demand will let them. But i still get it!

If I tell a friend everything I know and get them started with their wealth creation, as I have done! Loads! – – well, that’s fairly time consuming. I mean, one to one is time-consuming as a concept, not that I begrudge spending time with a friend and hooking them up!

but if…I over the months put it into a format that a lot of people can benefit from – writing it down, and structuring it a bit, such as what Castle Dreamer and I do with our ‘you know what’ mailing list (not wanting this to be just an excuse for a plug!) – then am I an info-preneur? maybe, kinda. In a different way than a seminar person, but with the same principle. If you have information and you package it, you enabling more people to get it in less time – hey, there’s the leverage.

So people get to leverage off information that we as investors – specialising in a particular area – have gained. Like nuts and bolts practical information. Whereas Kiyosaki and De Roos give you the theoretical information.

Kiyosaki writes about how he made his money from building businesses, (velcro wallets and whatnot!) losing it all, starting again, building it back up – and it was only when he ‘retired’ and had a think about ‘what next???’ in his log cabin (BTW his friends were all betting that he couldn’t just do nothing for very long!) – that he realised he was bored, and he wrote his book.

which he had to self-publish and stick on the counter of a friend’s gas station to get it off the ground!

Kiyosaki confesses all the time that he’s ‘not that smart’ and he doesn’t even fancy himself as a great writer. Nevertheless his book struck a chord. (with Oprah, which would have helped!) It’s s-i-m-p-l-i-f-i-e-d for people who may not own a calculator. But once you GET the principles the calculator can follow! And I don’t care if it’s a story or not. The one minute millionaire is a story, a made-up story. but the teaching of the principals of wealth creation are right there!

Kiyosaki also said that he always surrounds himself with people who are smarter than he is. Cue Dolf de Roos. Who Kiyosaki says is more of a property expert than he is!

And Dolf de Roos is certainly not making up stories. Some things he is doing in real life are visible for all to see.
Check out his website for the property ventures he’s doing. They are great, and he’s the first to do anything like that in his areas. his developments have a lot of style. I think he’s great.

So he may be a big time developer these days, but Dolf got started buying single family homes just like I am doing now. And that’s what he teaches. of course when you get to where he is, you don’t need the seminar. The seminars and the help are for people starting out.

cheers-
Mini

joy to the world