You're SO lucky to have IKEA in Aussie  it was one of my all time favorite places to shop when I lived in Canada.  Unfortunately IKEA hasn't made it to NZ yet.

Vicky — pining for an IKEA fix!!!!

I like the old house with subdividable section best from an investment perspective because you are creating a "twist" that you can do something with the property when the market improves.  Or you could just add a minor dwelling on the back and rake in rent now and deal to subdividing later on (if this is allowed in the area).

Vicky

Yep, I think it's a great idea.  If you furnish it you may be able to get even more per room.  In NZ, we are getting $120+ for a furnished room for students and/or transient types that stay a month or so.  Make sure you have broadband in all the rooms and supply them with a big screen telly in the lounge room   Old furniture is fine, definitely don't give them your nice leather lounger to put their feet upon!  I would also have a cleaner come in once a week, especially if you're renting to uni students (kids barely out of nappies, probably wouldn't know a vacuum cleaner or cleaning cloth if it hit them in the face!!)

It's a great way to create good cashflow, providing you don't mind the extra management, i.e. keeping an eye on the place.  Maybe keep charge of mowing the lawns so you have an excuse to go there every couple of weeks. 

Vicky

I'm with investorswitch, carlin, reistar, diggerdigzit and posenterprises — it definitely IS a good time to buy!!

• Housing is more affordable that it has been for years! 
• Rents are going up
• Interest rates are going down
• Investors (in NZ anyway) all seem to be asleep, waiting for the "bottom"

Problem is, how will you know when we are at the bottom?  You won't actually know for at least three months AFTER we've been there and prices start to rise again.  And we all know what the banks do when the economy starts to look better; they put their interest rates up! 

I'm with the BUY NOW team!!

Vicky

Here is a couple of commentator's opinions on the current New Zealand property market, both published in the last few days:

1.  Kieran Trass' monthly "Property Cycle Commentary", http://www.tellmethetime.com extract from the February 2009 commentary, just released this week …

“IF YOU ARE PLANNING ON SELLING property then you probably will have a window of opportunity in the next 3 – 6 months to exit properties at better values than you could have achieved last year.

IF YOU ARE PLANNING ON BUYING property then you probably should buy sooner (yes now) rather than in 6 months time when it is likely that property sales volumes will have recovered to some degree and we know that volumes LEAD values. It does appear that very soon you will be able to get fixed interest rates low enough to achieve a positive pre tax cashflow! A word of caution though… I’m not convinced we will continue to see such low interest rates once our economy shows good signs of recovering from the current recession (probably in 2010). Of course we do expect rents should be starting to rise again by 2010 so that could potentially offset any interest rate rise.”

2.  Excerpt from the BNZ's Chief Economist, Tony Alexander, released on 19th January, 2009 :

“If I were borrowing at the moment I would still fix six months though I would have a high expectation of breaking the rate before it matures. If I couldn't be bothered going through that process then I would just float and look to lock in at a long-term fixed-rate sometime almost certainly before the middle of this year. Just to clarify what fixing long term means. A two-year fixed interest rate is not long-term and neither is three years. I would look to lock in either a five-year or seven-year fixed interest rate at some point within the next few months. Our view is that wholesale interest rates probably will bottom out before the middle of this year and one’s personal goal is to be able to recognise the low point in the interest-rate cycle when it occurs.

This is not to be as easy as it may sound given the huge uncertainty about what is happening with the world economy and potentially extremely high volatility in the economic data measures over the first six months of this year. This means that at some point this year, just as we have seen wholesale rates plummet over the period of a few days and weeks, so too will they soar.

 So if I were a borrower at the moment I would fix six months or float and gloat.”

Personally, I believe it's a great time to be buying in NZ at the moment, with interest rates expected to bottom in the low 5's!!!  Investors are seeing 8-10%  (or more!!)  yields but most of them are still either asleep or over leveraged that they can't take advantage of the bargains. 

If you're ready to shop for +CF properties in NZ and need some help with finding properties or getting a savvy mortgage broker, drop me a line.

Vicky

Personally, if I had a spare $12K floating around looking for a home, I'd put it into SILVER.  Stocks or physical…. educate yourself here for starters …… http://goldsilver.com/videos/?ss=07f43aeba99e54130997ca384d207813 

and …… http://www.silverstockreport.com/index2.html 

It's an amazing time to buy with metals so low at the moment and don't forget, Gold and Silver are counter cyclical to things like the US$ and economy tanking.   Good times are coming

Happy learnings….
Vicky 

Yep Crashy, you're onto it! 

That's exactly how a lot of traders doing flips and renos and investors doing lease options fund their next purchase here in New Zealand.  You've got to remember though  that the GST refund only applies to trades, NOT buy and hold properties. 

Interest rates might be a bit higher than in Oz, but the savings on getting your GST refund, NO stamp duty and NO capital gains tax more than makes up for that.

The amazing thing is that the banks actually fund 80% of purchase price INCLUDING GST  .  If you're really smart about choosing your settlement date you can have it all lined up so that you settle right at the end of your current GST period and you immediately claim the back, so you might only have to wait 2-3 weeks for the money!!

Before the credit crisis property traders were getting funding at 80% of registered valuation, so if you'd negotiated really well you were realistically being funded 100%. I know a lot of deals that were done that way.   That easy-money has all dried up now though!!

Vicky

Nick, I've never seen wraps or leases advertised on the internet as such.  They are more a thing that you need to "create".  I find them quite a fun challenge, a bit like "match making"!!!! 

If you're interested in planting some money in NZ, I have a house that the tenant is keen to purchase on lease option; he's currently renting the place.  It has about $148/week +CF and a nice little kicker at the end of 5 years of about $13K.  Check out my website below if you want more info.

I've not done any Rick Otton courses but I do hear good things about him, so he may well be worth checking out.  Hopefully some other forumites can fill you in and give you some more info on Rick.

Good luck on your hunt!
Vicky

If that happened to me I'd be stomping my feet and flapping my lips!!!

Definitely kick up a fuss!!!  You can be sure if the shoe was on the other foot they'd have their hand out for late penalty fees!! 

Maybe time to find a decent lawyer who understands who he's working for too.

Good luck
Vicky

Have a chat to Kris at Property Financial Solutions in Auckland and see what bright ideas he has for you – he's very innovative and has a team based in both NZ and Australia so may be able to sort out a way for you to release your equity …. http://www.propertyfs.co.nz/

Cheers,
Vicky