Forum Replies Created
I think Tokoroa is about 14000 people….
Oh yeah and re:leasehold land, there was a great place I was looking at a year or so ago, 35K, GV was 55k, freshly painted inside and out, 4 bedroom, right next to town and the polytech, in a south island town, would rent for 280 a week,
(41 percent return, anyone????) however the catch was it was on leasehold land.)After paying the lease of 8000 per year it was an 18 percent return. Still OK, but the reason i didn’t take it was because if vacant……it would be bad. And as it had traditionally been let as a student rental, i was worried about 6 weeks vacancy every year.
I discussed it with my lawyer who had a look at the lease for me. it was in year 7 of a 15 year lease, which meant it wouldn’t go up for another 7 years (meanwhile if rents did go up a bit your returns would have got crazily astronomically good) but then again I was finding 18 percent returns on freehold land back then easily, so why would I buy leasehold? Also like someone said, buildings depreciate, land appreciates, but if you don’t own the land………
you don’t get capital gains. Still the writeoff would have been OK though, as you could depreciate the entire purchase price at 4 percent….Dolf De Roos says leasehold can be great simply because a lot of people are scared of it and so therefore you get more deal for your money. but if you are vacant it’s about 5 times more of a liaibility (the different between paying rates and paying rates and the land lease!!)
my two cents
cheers-
MiniI just finished The Camino by Shirley Maclaine.
(it’s about how she did the famous 700k plus pilgrimage on foot through northern spain at the age of 62, which heaps of saints of old did too, and of course she had heaps of incredible experiences on the way! As you do, apparently!!)
If you’ve read her other books you’ll know the kind of thing but this one is the BEST, deepest, and freakiest yet of hers, (though I also love the one where she does the Andes, Lima etc)
Re the Camino, I’m still digesting it actually, the ‘freaky stuff’ she recounts in the book actually makes sense of a whole lot of stuff for me and ties it all in. The Bible, science and history included. It’s jumped to the top of my ‘great spiritual books’ list…
for more middle of the road fare, I agree with Celestine Prophecy as a great novel, not so much as a literary work, but for the EFFECT it has on one. I also loved Way of the Peaceful Warrior by dan Millman, and actually also got a LOT out of his semi-obscure second book, Spiritual journey of the peaceful warrior I think it’s called, anyway the one that’s kind of a work-book.
I also LOVE the one minute millionaire which I have been buying for friends on a regular basis lately – and they’re then buying it for their friends! it’s that kind of book, because it really does make stuff click. Especially if you’ve been reading too many ‘straight’ wealth creation books and have the dollar signs in your eyes, it kind of puts the focus back on the point being to be abundant so you can give back to the community, which was the ‘missing link’ for me which I loved getting from that book. And fun to read, with the choice of reading the right hand pages, the left hand pages, or both, depending on what kind of learner you are! and to me it’s even overtaken Kiyosaki as my fave wealth creation book because it ALSO has a spiritual vibe behind it, however it’s really nicely threaded through the book without being offensive to anyone’s faith (I reckon).
I have read a lot of other freaky stuff too,
joy to the world
I wouldn:t touch it if there is no rental manager and no tradespeople.
I have properties in whoop whoop towns of a few thousand myself, and they are fine, there is more than one property manager to choose from and say 8 or 10 builders, two or three plimbing firms etc.
My returns are around 20 – 24 percent yield CASHFLOW not to mention capital gains as well. to cover the `risk` that the rest of the world tells me I have there. (hehe). Now if your whoop whoop returns aren`t pretty much up there either for cashflow or capital gains, then by the time you@ve solved all the problems, is it gonna be worth it???? you@d have to be getting twice as much as a term deposit from it, wouldn@t you, to bother???cheers-
Minijoy to the world
i forgot to add– you know what i did with the 15 grand instead of buying a vending machine or five?
i bought a house for 16K. it cost a bit more cause I did it up and now it’s rented for 95 per week. It’s going great, though. 20 percent return and fully managed, so truly a passive income which has also increased in capital gain by about 50 percentin a year.!
joy to the world
i remember being quite taken by a chap called David Green at rpvending
at a stall at the investing expo at darling harbour last year. Not that i had ever considered vending machines in my life, but it seemed like not a bad thing to do if you had a spare few k.
15 k gets you about 5 vending machines and they site them for you in small to medium business. basically coke has the unis, railways etc sown up and their market is the rung just underneath the one underneath coke.I even went to a spiel with a friend, thinking I might put up the money and he’d work the machines (they said only 1 day a week to refill, and they site them for you within ten min of your home) – but in the end it sounded like a ‘job’ not really a passive investment. Still, the returns seemed ok with 50percent returns seeming doable (free machines in year 3, and they last for 10-15 years. they teach you how to repair, and the major repairs are guaranteed for 2 years.
the other thing he mentioned was that in the end it came down to the person. the more the vending machine guy or girl liased with the business and had people skills, the more loyalty was built up and the more sales – plus if you customised the stock…you could be on to a good thing.
in the end it just wasn’t what i saw myself doing with my life, and i didn’t want to be stuck with vending machines if my friend got sick of it.
in the end he decided to look for some second hand ones and place them himself. of course he didn’t do that either. So in a way RP vending is good because they do all of that for you.
plus i liked the guy. i mean, he was just a regular guy with a vending machine business, but he was somehow PASSIONATE about them!
they were in the woop woops of sydney somewhere, St Leonards or something, i don’t remember.cheers-
minijoy to the world
Hi there, to answer your question the ‘state’ they are in is NZ! Yes smaller towns of 1500 1/2 an hour out of town of 45000 and smaller town of 8000 about 2 hours or less from large metropolis w. international airport. So rural/regional but not remote.
Yack, welcome back, hahah, I was missing someone to disagree vociferously with,
“I prefer growth properties so I am not interested in rural properties. “
it’s a fallacy that rural/regional properties don’t grow. If Sydney properties went up 25 percent last year my regional ones went up more than double that in a year, more like 50-60 percent.
“So whats the use of having a rural ve+ property now but becomes neutral or ve- in 5 years time as interest rates hit their norm.”
Doubt that, rents go up. Like I said 20 percent return on purchase has become 24 percent or whatever less than a year later because rents are rising. rents tend to rise when interest rates do, because less people are buying and more renting…blah blah, the usual behaviour of a property cycle. So on one half of the cycle you are winning on cap gain and the other half you are winning on rental yields.
I’ll have a free house in 4 years which has given me all the cash back that I purchased it for, and then i could look at it as a free house giving me income for life. I can’t understand how come people don’t get it and still diss the strategy if they really understood it.!!“I dont believe we can sustain rural or regional property values in the medium to long term They may have been worth it 5 yrs ago but not now.”
You were never a purchase of my sort of properties back then when you thought they were ‘worth it’ so why would you be now? You’d never be, anyway sounds like!
When would it ever be ‘worth it’ to you? probably never. 60 percent cap gain and 24 percent rental yield still wouldn’t convince you. But hey, each to their own, no skin off my nose… if you can do better by doing nothing, so be it. your money, your decision. my money, my decision….
“Thats why Westan and McKnight have sold properties.”
they have sold a few properties I think, in Australia at the top of a boom and bought in to a different market or different kind of property.
AHHHHHHmmmmm I have been trying to tell you guys that for ages…don’t buy in Aus now, you won’t get the yields, and you won’t get a hell of a lot of cap gains for your troubles either, in my opinion. let it sink a bit more and when it’s really quiet and dead then take your pick and buy up large. but in NZ you’ll get both cap gains and +ve yields in my opinion, and right now.
i think a lot of the Mappers (oh yeah, you don’t believe in them either nor seminars…sigh) have been getting ahead by purchasing in NZ….“Why else would they sell ve+ properties.”
Let’s say you sold a 15 percent yield property for 90K and could buy two 45K properties with the same yields that will be worth 90 each in a couple of years, that kinda thing. trading one for two…I wouldn’t be selling my CF+ve properties unless either a) they stop performing or b) I want the money to do something else with i.e. building a business or putting it into own home, etc. But it’s a great place to store and grow my wealth indefinitely.
cheers-
Minijoy to the world
yeah yack, who’s going to annoy me if you leave?
come back soon…
cheers-
MiniPS
yeah i got jack of it for a bit when I was getting some grief but the parties have sorted it out in a win/win manner and all is good.
I’ve recently been away not cause of that but because I’ve been travelling and doing mucho deals with my mates castledreamer and
familyfirst.joy to the world
i bought a place for 19K a year ago which was dumpy but structurally sound and spent 8k on it, including a shower, new bathroom walls and vanity, polish floors, new fireplace, paint and curtains.
it has been rented at 115 a week for the last year (22 percent return) but it’s now been upped to $130 per week to reflect the market rising (25 percent return.) Also would have gone up in value about 50 percent.
I have another deal I got a year ago which i like even more because i didn’t have to spend any sweat on it. i bought it for 27300 and it rents for 110 p/w, Best of all I have never ever been there let alone spent anything on it, because it didn’t need it!
Even my poorest performing house (16K plus 8 to do it up rented for 95 p/w) has been OK at 20+ percent return but has had about $1000 maintenance issues on it so because that was in the first year it’s like paying an extra grand for it, it’s therefore now ‘only’ made me about a 19 percent yield, hahahaha
cheers-
Minijoy to the world
I am going to try to do some mad rescheduling and delegation and try to make it!!
cheers-
Minijoy to the world
hi benson,
well didn’t I just get sucked in then! hehe!!
So ummmm…
hi….
bye….
cheers-
Minijoy to the world
Hello Great Pig, ooh that sounds like an insult, but it’s your name…okay!!
sorry i haven’t been on the forums for ages, been travelling plus have a zillion deals on the go so really busy.
“Do you take on contracts specifically to match client requests, or do you just take on whatever you think is good and then try and find people interested in taking them over?”
We kinda do both. we only look specifically for clients who have already bought from us as we know they are fair dinkum. but these clients have bought from us because they wanted +ve cashflow which is what we specialise in. In fact we have never offered a negative geared property – if you want one of those, there are so many of them here already why would you buy in NZ!
“What if no one wants to take one on? Does that mean you end up having to take it yourself?”
no, although sometimes my bird-dog business partner says ‘i haven’t figured out which i want for myself yet. Put them all out to the list and I’ll take what doesn’t go.’
but we actually haven’t had to pull out of a deal yet because demand has literally been crazy. Also because all the deals are good! hehe
We have one with a few days to go before unconditional at the moment and if we don’t get one of our clients to take it we will pass the deal on to…i can’t tell you who it’s a secret…and if not, then we will pull out. Our clauses allow us to do that. The agents won’t like us much if that happens all the time, but if 9 don’t fall over and one does, we’re all good.
“And what sort of fees are typically charged for this service?”
we charge 1500, westan i think is a bit less or else the same, and most charge more, ie 2995, 4995, 4000.
I think generally the more they charge the more bogus they are.!!!A strong opinion, but one I can back up!
>Are they based on the price of the property, the >amount of leg-work that went into obtaining it, >or a flat fee?
flat fee up to about 100k property, then we might charge a bit more especially if the deal is very desirable such as a fully tenanted block of four flats say for 200K yielding 17 percent.
‘Just curious as a potential client.’
yep, totally, PM me if you want to know anything else. Our service is completely on spec from our point of view, so it’s no obligation from your point of view. at the very least you can get an idea of what good deals look like in NZ at this point in time, see if you can do better yourself, and if not, hey, use us!!cheers-
Mini
GPjoy to the world
I dunno benson, I guess it’s a fine line between being able to answer a question because i know this stuff – not only because I had to find it out for my own investing but also because i have the answers all ready written on my computer that I almost everyone who wants to buy in NZ but hasn’t yet wants to know this stuff. So yeah, I do have this info at my fingertips, because i have clients. So I can just go into the guff and copy and paste for everyone here and maybe help someone for free.
While I’m not trying to hide that’s what i do, on the contrary, I’m proud of it! –
i think it’s OK to talk about ‘this is what i do and why I do it and what i have found’ – I don’t know if this is advertising?or what the answer is – what I am and aren’t allowed to talk about and in what way. I guess that if any moderator has a problem with it just remove it.
there have certainly been discussions about bird-dogging from the kind of people that haven’t bought in NZ yet but would like to. I.e. most of our clients would fit that description. Others already have bought in NZ and are using us just to get more deals cause we’re on the ground there.
I only started bird-dogging because once I put spare deals up here for free (remember that thread??) and i got absolutely swamped with replies. And cause people asked me to find deals for them. So in a way the market made me a bird-dog rather than me trying to force my service on the market. We’ve never advertised for clients, and i don’t want to. i really want to attract people who will find us through word of mouth or property investing circles, rather than just a whole lot of ‘members of the public’.
Am i talking myself into a corner here?
Probably! Anyway, hope you’re well!cheers-
Minijoy to the world
Kaye – ” I mean, if a person was a very low income earner, it is pretty hard to accumulate property at a great rate.”
two people I know –
income 10K owns 3 properties
income 30K to start with now has over 30 propertiesumm, I don’t know the incomes of some of the other people I know with 14, 25 properties etc but they have day jobs of the ‘good’ variety but still what I would call normal people
buying 15 properties in a year doesn’t come down to how much income you have, which is a hard thing for people to get their heads around that believe the opposite.
The best way I think this concept can be explained that I’ve come across is by playing Kiyosaki’s game ‘cashflow’. You will notice that the janitor (lowest income player) often wins the game over the doctor, airline pilot etc
if you play this game and ‘get it’ then you’ll also be able to ‘get’ how people can buy +ve CF properties and keep on going.for a lot of bigger investors I know with around say 30 properties, lo docs finance has come into it.
don’t have be scared of an extra percent or two if you are getting the yields.
joy to the world
yes and I recommend westan and muppet too
cheers-
Minijoy to the world
The following is an excerpt from our client mail-out (3800 words in total) – let me know if you want the whole thing. No hotmail addresses though as they are a pain and always bounce.)
How much does due diligence cost? What other costs are involved?
LIM reports are around $130- 150 NZD from the local council.
Building reports (pre-purchase inspections) are usually between $150-550 NZD.
Lawyer for conveyancing of property is around $500-1000
Insurance is usually around $200-400 p.a. – you should organise this to start on settlement day in NZ (‘contract date’ in Australia). We would be happy to hook you up with an insurance broker.
Cost to connect electricity if required, i.e. for maintenance or tradespeople – approx. $120
Rates are usually $450-$1600 pa., it depends on town.
Property management fees: 8-10 percent (full service.)
Tradesmen: Builders $25-35 per hour
Handyman/woman $15-20 per hour
Labourer $10-15 per hourcheers-
Minijoy to the world
The following is an excerpt from our client mail-out (3800 words in total) – let me know if you want the whole thing. No hotmail addresses though as they are a pain and always bounce.)
How much does due diligence cost? What other costs are involved?
LIM reports are around $130- 150 NZD from the local council.
Building reports (pre-purchase inspections) are usually between $150-550 NZD.
Lawyer for conveyancing of property is around $500-1000
Insurance is usually around $200-400 p.a. – you should organise this to start on settlement day in NZ (‘contract date’ in Australia). We would be happy to hook you up with an insurance broker.
Cost to connect electricity if required, i.e. for maintenance or tradespeople – approx. $120
Rates are usually $450-$1600 pa., it depends on town.
Property management fees: 8-10 percent (full service.)
Tradesmen: Builders $25-35 per hour
Handyman/woman $15-20 per hour
Labourer $10-15 per hourcheers-
Minijoy to the world
Hi there,
I’ve not only done research on NZ, I LIVE it!! I am talking to NZ property experts almost every day, be that rental managers, building inspectors, agents, my bird-dog-on-the-ground business partners, or lawyers. i also subscribe to property investing magazines about NZ, news sites, I am on the mailing list for a couple of other bird-doggers (checking what the competition is doing and making sure our deals are still the best!! hehe!!)
not to mention having together with my two business partners about 15 deals on the go in various stages of completion which we are helping our clients purchase. And to get to that point we’ve got quite a good system in place if i do say so myself, and a lawyer who can keep up which our clients mostly choose to use (but don’t have to) because they’re so excellent.I reckon because of the above and spending months in NZ every year, and having lived there and travelled it for most of my life, I’ve also been really good at picking areas which are going to ‘go off’ heaps of times, one went up 127 percent in a year, others have doubled, and what’s more they’re still +ve CF (or were when I picked them.)
people say I’ve been ‘lucky’ but I find that insulting as if they’d done what I’d done they’d be ‘lucky’ too. it’s easy to say that after a place has gone off 127 percent in a year but to me it was easy and logical to predict that it would go off if you make it your constant business to keep your ear to the ground as I do. I do really put the time in about NZ property.
basically, if you don’t want to buy sight unseen jump on a plane and take a week or two and drive around. You’ll have fun cause it’s such a cute place and the driving isn’t that bad because unlike Aus NZ is compact and not remote. you’ll get an idea of what you can get for the price in various places – and you’ll see the kind of tenants you’ll get and basically do what we do – talk to people and look at zillions of properties.
In NZ The furthest you could be from a major city and international airport would be a few hours and even then you’d be in a glorious holiday resort area anyway. Flights are super cheap at the moment. so why not take a trip and get the vibe and feeling for the place.
If you *are* comfortable having some experienced investors who purchase for themselves (and how – my business partners have probably purchased about 10 times the amount of properties in a few months that the average person owns in their whole lives – !! ) – and me, well I’ve got three and will buy another three or four this year – and I’m really slow compared to most investors I know!
-so if you would be comfortable using a bird dog then there are people such as myself and westan who i would recommend. I wouldn’t recommend some of the others (the fancy web-site ones) as they charge way too much for not enough help/info/service/flexibility of contract in my opinion.
Also if you take one of the $4000 people’s deals and you have to go instantly unconditional and ours you don’t so they’re heaps safer.but then again don’t hold it against us if we end up getting a website too one day, hehe
We are getting a lot of repeat business too, as we are finding our clients are often buying not just one property but many!
I’ll stop the rambling now-
cheers-
Minijoy to the world
Hi Steven,
interesting thread. I have a couple of questions, i.e. how do your lenders feel about the smaller towns? like under 10000, and 5000? Will they still lend there but just at a higher LVR? Do they cross collateralise if properties are under 50K or just not lend at all? How would they feel about a town of 1500 that is 30k from a major city? And is all this available as a line of credit? And/or Lo Docs i.e. self employed?cheers-
Minijoy to the world
well as far as I can see it’s still got 5 percent to recover to the 1987 levels, which is not too much to ask, considering NZ is supposed to be in a boom…
cheers-
Minijoy to the world
DD, you should go down to Melbourne and do it! It’d only take you a week???
joy to the world
