Forum Replies Created
Hi Mischeif
i agree with the other guys
but want to add get an “independant” rental assessment on the property to confirm your figures, be aware you are not buying a cash positive home and will need the property to appreciate for you to make some money.
regards westan
I live in New Zealand and for a fee find cash positive deals there, email me at [email protected] to join our database
Hi Guys
some interesting questions, this is the way i see it,
Auckland has been overpriced (expensive) for a while and set for some slowdown or drop in price. As Melbourne and Sydney have also.Regarding the regional areas that i keep a close eye on, the market has definately slowed down, the buying frenzie of the past 12 months has weakened. Interest rate rises have really given buyers a chance to stop and think before they put in an offer. Having said that there are more buyer than seller still and the markets we are in we are struggling to get deals.
Baloo your comment about the ripple effect. I feel that NZ has followed Aussie (thats why i bought up big here over the past 18 months), so far my guess has been right. Lets look at what is happening in Australia, the areas that i’ve invested in (in OZ) haven’t come back at all. In fact they have still risen over the past 12 months, so i’m not aware of the ripple effect hitting regional areas of Australian cities. Will NZ follow the OZ experience ???? i think while there are more buyers than seller the market will hold up well.
I made these comments in one of our newsletters dated 18 Sept 2004 (i send out newsletter every so often to people who are using our buying service).
Future Capital Growth
I’m often asked what do I see as the future for capital growth in NZ. My view is the commonly held one over here. The property market has had some great growth over the past 18 months. While not rising as much as the Australian market it has still performed very well especially recently. After a number of rate rises the market has certainly slowed down. While there are still more buyers than sellers, in most markets sellers are becoming more realistic on price expectations. So what about the future, for the short term? There have been a number of commentators who see the market likely to drop, this is much the same as we were hearing in Oz about 12 months ago. While the doomsayers were wrong in Australia, I think they will be wrong in NZ also. I see the market moving sideways for the near future. If you are buying today in NZ and expect to sell out in 12 months (without doing anything to your property) for a tidy profit, I certainly wouldn’t encourage that expectation. However, I feel that for the long term the prospects for New Zealand look very encouraging. As you are well aware property investing is usually a long-term investment. Dabble (gamble) in Call Options if you want the thrill of a quick profit (or loss).How can we try to increase the prospects of capital growth? It has been my practice in Australia to buy into markets that will experience some type of growth. Often this will come about by some major economic development in the community, such as a new industry being established. We can never promise capital growth to you, as we really just don’t know, but if we buy in areas that will be demanding more workers then we may be able to expect rents to rise along with prices as well, even in a flat market.
regards westan
I live in New Zealand and for a fee find cash positive deals there, email me at [email protected] to join our database
Hi Guys
my hotmail is 2000mb (or 2 GB), i know i paid a little more a while ago but its been that size for months.
regards westan
I live in New Zealand and for a fee find cash positive deals there, email me at [email protected] to join our database
Hi If your buying something showing the 11 sec rule (10.4%) the other things you need to check are
1. just because it shows a 10.4% retrun doesn’t mean it is cash positive, check all other costs eg rates , body corp etc. Sometimes 10.4% means cash Neutral.
2. check that the area has the chance of going up in value , don’t buy areas that are going backward with no hope of turning it around.
3. check that the rental assessment is accurate, ask an independant property manager to inspect the home for you.
that will do from me i’m sure others would like to comment.
regards westan
I live in New Zealand and for a fee find cash positive deals there, email me at [email protected] to join our database
Hi Toddo
i can personally recommend both of these guys
regards westan
I live in New Zealand and for a fee find cash positive deals there, email me at [email protected] to join our database
Hi Mbeu
sorry to be hard on you but why do you have debt of 30K? it looks like you are living way beyond your means, maybe you need to learn to live a cheaper lifestyle and learn how to manage money better. You have way too much bad debt.
If this is the reason for the 30k debt then any more debt will just get you in more trouble.
I’d like you to pay off the debt and get a handle on your finances.
regards westan
I live in New Zealand and for a fee find cash positive deals there, email me at [email protected] to join our database
Hi z1
i’m a fan of interest only loans. But i haven’t always been able to get them, i have an LOC which is effectivily an interest only loan. As far as what mortgages i have , well its a real mix i have some variable at 6.15% through homepath, some fixed interest loans with NAB at 6.69% and a LOC with citibank. The homepath one is interest only as is the LOC but the NAB had to be part principal also (they forced me to). My NZ loans are nearly all P&I.
Why i like interest only is
– if i was paying off the loan (P&I) i’d be in effect getting 6.15% interest on the money, (or what ever the interest rate is). I feel that i can reinvest that money and get a lot high return than that.Sorry if this is a big confusing
regards westan
I live in New Zealand and for a fee find cash positive deals there, email me at [email protected] to join our database
Hi Jordan
i always put in 20% and
1. avoid LMI
2. feel i have a bit of equity in the property
3. don’t put more in so i can purchase more deals so that will achieve a higher cash on cash return. I do this strategy while i can get a higher return than i would if i had the money paying off the mortgage
4. gives me a consistant “meter” that i can compare deals to see how they are performingregards westan
I live in New Zealand and for a fee find cash positive deals there, email me at [email protected] to join our database
Hi Darren
lower south Island is still presenting some good deals but they are harder to find all the time. i’m living in Balclutha.
Jo what i meant by you not being “aggressive” was you often mention how you don’t like having debt, i thought this is part of your strategy to own property freehold, clearly someone willing to take on debt can amass a far larger portfolio in a lot quicker time. Clearly in comparission to the majority of investors you are aggressive, but not as quick as some others.
can you clarify you attitude thanksregards westan
I live in New Zealand and for a fee find cash positive deals there, email me at [email protected] to join our database
Hi Alex
i agree with Simon, i wouldn’t be chasing 6.5% returns, you would find that this home isn’t really cash positive. I also agree with Simon that you should be looking for properties returning at least 10%. I’ve bought a lot of homes in Commission areas over the years (but not at 6.5%). Each area is different ask local property managers how they feel about managing properties in the street you are looking at, and ask how long do they sit vacant for.
I don’t know of many sizable towns in Victoria where this is possible.regards westan
I live in New Zealand and for a fee find cash positive deals there, email me at [email protected] to join our database
Hi Jeff
the problem with a company structure is a company doesn’t get the 50% discount on Capital gains tax. It think the better structures would be either in own name or in a trust structure. Often it also depends on the type of property you are buying, for example do you want to negatively gear the property losses again you personal income you maybe better buying it in your own name???? It comes down to each situation is different. Look throughout this forum for topics on trusts.
Regards westan
I live in New Zealand and for a fee find cash positive deals there, email me at [email protected] to join our database
Hi Darren
go for it, the market here is still good but not as good as it was months ago. I feel the real NZ potential is buy properties that need to be fixed up. I’m doing a few deals with some people here at the moment where i finance the deals and they do the work and we split the profit.
I’m a bit more aggressive than Jo and like you if i was starting again wouldn’t be keen on doing it the slow way. What part of NZ will you be relocating to. Jo -Just for the record the NZ economy is booming 5% the highest in the OECD (i think) there is very low unemployment which is a real pain for getting cheap labour over here. The expectation is the economy will slowe next year after interest rates were lifted earlier this year. I think the whole country is enjoying the growth (which is nice).
Regards westan
I live in New Zealand and for a fee find cash positive deals there, email me at [email protected] to join our database
Hi Guys
who organizes the expo ? i might look at getting a stand there myself next year.
regards westan
I live in New Zealand and for a fee find cash positive deals there, email me at [email protected] to join our database
Hi Rob
yes i agree that product sounds reasonable.
as far as tips go with settlement, make sure you do one last final inspection before settlement, check the appliances work (stove, hot water, heater etc.) Don’t forget the First home owners grant if you qualify. Have you concidered putting the property into a trust if its a buy and hold ? remember you loose the capital gains exemption (for own homes) if you do sell soon.
Regards westan
I live in New Zealand and for a fee find cash positive deals there, email me at [email protected] to join our database
Hi all
firstly to answer mini’s question since she isn’t here, Dolf claims his first purchase was in NZ at very high interest rates.
Secondly Techa,
Sorry but Im still not seeing any suggestions infact Im seeing avoidance.why the concerns with lots of strategies you only need one. Fixing interest rates will protect you IF rates rise.
Thirdly, it appearsto me you are attaching member of the forum for failing to prepare incase of a rate rise. If you are concerned about expose and risk whyallocating some funds to Trading on Margin.(I have been trading for 10 yrs)
Even a small successful account can offset pending interest rate rises and or give a nice return.This is high risk compared to having a variable rate, margin loans are a variable loan at a higher interest rate than home mortgages, If interest rates rise so does the margin account, plus you have the added risk of a falling market (the stockmarket is at record highs), which means margin calls. Sound Ok in a rising market but they go up and down.
fourthly the borrowing of funds from Overseas, is an interesting option (but with risk as you say), what security do you need to get the loans ?
regards westan
I live in New Zealand and for a fee find cash positive deals there, email me at [email protected] to join our database
Hi Tools
everyone knows that i’m a fan of cash positive (i’ve never bought a negative geared on)properties so it may supprise some with my answer.
I’d take the 10% capital growth and 5% return. The reasons are a simple matter of mathematics. Over any period the returns will be better with the capital growth being higher. The reason being that a 10% yeild doesn’t not make a 10% return, we need to deduct rates, insurance etc. Even with the leverage of an 80% loan, when its all worked out the return is short of 10%.
So i’d go for the 10% capital appreciation (not to forget that 50% capital gains is free money- not taxable).
It would be wonderful if we knew what the capital growth would be, sadly none of us are that clever.
In reality i don’t think we have to make the choice between capital gains versus yeild, find properties where you can expect growth also.Regards westan
I live in New Zealand and for a fee find cash positive deals there, email me at [email protected] to join our database
Good one wayne.
whatever the goal lets make sure we enjoy the ride. Take time to smell the flowers etc etc.
regards westan
I live in New Zealand and for a fee find cash positive deals there, email me at [email protected] to join our database
Hi Ken
Jehovah’s Wittnesses seperate themselves from mainstream Christianity. Apart from some of their more unusual practices (refusual to transfer blood, refusal to celebrate Christmas and Birthdays) they have one very major difference to christian teaching.
This major difference focus’ around the person of Jesus Christ, Christians believe that Jesus is God incarnate someone who was fully man and fully God. Jehovas Wittnesses whilst holding Jesus up as an important part of their faith see Christian teaching as blasphemy.
Unfortunately the two (Mainstream Christian Teaching and JW’s) beliefs cannot be reconciled.regards
westanI live in New Zealand and for a fee find cash positive deals there, email me at [email protected] to join our database
Hi Karen
sometimes you just have to be persitant, don’t give up. speak to a few of the mortgage guys on this forum. I remember a time when one bank said no to me so i found another that said yes.
regards westan
I live in New Zealand and for a fee find cash positive deals there, email me at [email protected] to join our database
Hi wmcd
good to hear some people are human out there and will bend the rules to help out.
Its interesting that ozforex were so helpful, i’ve actually found their service (on the small number of occasions i’ve used them) to be excellent. I don’t say that very often about companies.
regards westan
I live in New Zealand and for a fee find cash positive deals there, email me at [email protected] to join our database
