Forum Replies Created
Hi Guys
sorry i just noticed there was already a topic on this forum about india, (You would think i’ve been on the forum enough to know to check these things[blush2] )
Oh well we can see what else people have to say ?
regards westan
USA deals, cash flow equity and capital growth all in one property.
International Property Consulting Pty/Ltd.
Property Investing New Zealand Ltd
http://www.iproperty.net.auHi Guys
I can’t think what else i’ve said may not be accurate, but if its about the currency and its direction then look at http://www.ozforex.com.au
and see what the “futures” are paying for the dollar in the next 2 years, they are saying the Kiwi will drop.regards westan
USA deals, cash flow equity and capital growth all in one property.
International Property Consulting Pty/Ltd.
Property Investing New Zealand Ltd
http://www.iproperty.net.auHi Don
my apology if i have said something out of date, You imply other comments are not true outof date can you name one ?
Re- the rates i got my information from http://www.goodreturns.co.nz, a well respected and accurate source i would have thought.
according to them banks have lifted there fixed rates none have lowered them. Which banks are discounting the rates and what are interest rates ?
regards westan
USA deals, cash flow equity and capital growth all in one property.
International Property Consulting Pty/Ltd.
Property Investing New Zealand Ltd
http://www.iproperty.net.auHi Kiwi
Ok this will be my last post on this matter also. I’m not trying to have a go at anyone here just loooking at the facts to back up my position. I even let you use one of your examples to evaluate. I’m trying to have a healthy robust discussion as to wether NZ is the market many belive it is and i say it isn’t any longer.
1% vacancy thats tremendous, you have better managers in NZ that i did. You must have a fantastic run with repairs also, because i think that most people would find $300-500 per year is the Minimum investors should be putting aside for future repairs even if they don’t occure in that year.
I see you only purchased this property in April so you wouldn’t have any Tax year figures for the deal. I think Kiwi we need to be honest to ourselves and be conservative with our own figures, no point doing projections on 52 week occupancy as we all know that isn’t going to happen. My belif is be conservative if i can live with conservative figures then i can certainly live with any improvement on them.
I just needed the figures to prove my point that these deals in NZ for a buy and hold are not Cash Positive, They are at best cash neutral which is fine for some peole . But the facts remain you need capital growth on a deal like the 79K for 170 pw rent.
The figure are the figures i’m not manipulating them to get a worse result. The interest rate on 7.5% was the only difference your paying 7.25% so that gives you an extra 188 per annum, on my figures. But today the best you can get is 7.5% from some obscure lender, most are charging around 7.8% for fixed rates and 9.5% for variable. Fixed interest rates are on the rise in NZ.
OK had my say happy to leave the matter here.
Oh and for those thinking the Aussie Dollar will lose value against the Kiwi, the financial markets expect the Kiwi to continue to lose value against the Aussie over the next 2 year
regards westan
USA deals, cash flow equity and capital growth all in one property.
International Property Consulting Pty/Ltd.
Property Investing New Zealand Ltd
http://www.iproperty.net.auThanks Kiwi
i looked at your figures and come up with different result, i think its more realistic.
rent $170 pw so rented for 50 weeks a year (thats being generous)
income $8500
Less expenses
you put in roughly $5 K so you loaned $74K at 7.5% (if lucky) Interest $5,500
rates 980
ins 400
management 800
Total $7,730Profit only $770 per annum or a 15% net return – Still nice
BUT you haven’t allowed anything for repairs, i’ve owned a number of these timber homes in NZ and you will have repair bills. I’d so you need to allow about $500 per year (even if the home is in good condition now), suddenly the real return is down to $270 per year or a 5.5% Net return, Ouch. A bad tenant and it could take years to make up the cashflow. And i hope you don’t have to pay a letting fee as that will eat away a years profit also.
Sorry Kiwi to disappoint you but with this deal you need to get capital gains to make money. And my whole point is i think you will really struggle in the next 3 years to get capital gains in most places in NZ.
Please go over my numbers and tell me if i’m wrong ?
regards westan
USA deals, cash flow equity and capital growth all in one property.
International Property Consulting Pty/Ltd.
Property Investing New Zealand Ltd
http://www.iproperty.net.auHi guys
Kiwi As far as this thread goes, i doubt that you will be able to achieve 15% net returns, more like 5-8% can you supply an example.
Nigel, is this another one of your attempts to have a go at me ? Im not sure whats your problem, but i’m more than happy to discuss it if you want to discuss Buffalo start a new thread, i’m more than happy to discuss this matter. I have great confidence in our recommended property manager.
regards westan
USA deals, cash flow equity and capital growth all in one property.
International Property Consulting Pty/Ltd.
Property Investing New Zealand Ltd
http://www.iproperty.net.auHi Terry and you other guys who do broking,
i wouldn’t have thought now was NOT the time to get into the broking game ? I thought more people would still be leaving the industry than joining ? or has a big shake ourt already happened. ?
regards westan
USA deals, cash flow equity and capital growth all in one property.
International Property Consulting Pty/Ltd.
Property Investing New Zealand Ltd
http://www.iproperty.net.auHi kiwi
my experience tells me a very different story
I sold 25 homes in Australia these properties that would have gone up by $0 since i off loaded them. I took that money to a new market and did really well, got the same cashflow but capital growth also. Now i’m taking that NZ money and investing in another market were i expect to do really well again. Way better than if i held on to those same NZ properties.
Your comments above are weighing toward the exact sheep that buy for greed and speculationI find this comment a bit baffling ?? Am i the only one who is trying to make as much money as i can through investing ? Is that Greed ? no, its what i do with that money that makes me gready or not. Surely its not wrong to work my investment dollars as hard and safley as i can. As far as speculation, i buy for cashflow so why not sell a cash pos property that will gross 13% and replace it with one showing 14% in an area that has less risk. In an area with more Capitsal growth potential. I thought that was smart.
On another matter there are better ways to make cash flow from real estate than buy and hold. Unlike years ago, I’m no longer content to make 10% Net from my investment.Regards westan
USA deals, cash flow equity and capital growth all in one property.
International Property Consulting Pty/Ltd.
Property Investing New Zealand Ltd
http://www.iproperty.net.auHi Kiwi
thanks for that, i didn’t take it that you were saying i’m a sheep.
I love NZ also , i lived there for two years from 2004-05. So i’m not a kiwi basher at all. Many of my good friend can’t say “fish and chips” properly!
But we all know that markets move in cycles, NZ has had great appreciation and has followed the Aussie market, with a few year lag.
One of my many concerns was that as in Aust when the market started to top out that buyers disappeared then the market headed south. I know countless people who have held on to properties in aust. that have lost 10’s of thousands and 100’s of thousands in some Sydney cases from the peak of the cycle. There is no harm in selling while things are good, because we know that the market will change. If people aren’t in for the long haul then selling might have been a good option. I know some parts of NZ the market has already Stopped and there are an absense of buyers. Those people may be stuck with properties for a long time.
When i first started buying in NZ in June 2003 in some places i bought there were homes that had been on the market for 2 years, great for me as a buyer not so good if your a seller.
The great thing with NZ is there is no Stamp duty so its easy to move in and out of the market.anyway time for me to head out to pasture , Baaa
regards westan
USA deals, cash flow equity and capital growth all in one property.
International Property Consulting Pty/Ltd.
Property Investing New Zealand Ltd
http://www.iproperty.net.auHi Guys
Ok i must be a sheep then Baaaa [biggrin]
History shows sometimes its better to be out of the market. Especially New Zealand Real Estate History.
I know you guys get sick of me saying this but why not move your money to where you can get the best returns. NZ was great i have over 80% in 2 years but for the next 2 years i would have been lucky to hold the money i made, so i’ll move the cash to where it can work best for me.
Sometimes buy and Hold is the a great strategy but sometimes it isn’tregards westan
USA deals, cash flow equity and capital growth all in one property.
International Property Consulting Pty/Ltd.
Property Investing New Zealand Ltd
http://www.iproperty.net.auHi Ed
what you are thinking is correct the prices have moved up significantly in NZ since 2003 when Steve and others were buying in NZ.
But properties have not moved as much as from 45K to 200K. but certainly doubled in many centers.
Many of us who were buying in NZ in 2003 have now sold out because of the growth.
I suggest if you want to buy in NZ do two things
1. Read the posts on this forum under “overseas investing”2. if you want to buy, use Minimoul, a regular on this forum although absent for a long time. Mini knows where to buy in NZ and what price to pay.
regards westan
USA deals, cash flow equity and capital growth all in one property.
International Property Consulting Pty/Ltd.
Property Investing New Zealand Ltd
http://www.iproperty.net.auHi Don
i don’t think i’m trying to have it both ways as i’m NOT buying in NZ and i’m not enouraging anyone to buy in NZ and i’m not offering NZ as part of our service through any of my business’.
In regards to our website http://www.iproperty.net.au under the “New Zealand” page we actually say
We do not actively promote investing in NZ, but we still have good contacts there, so if you are really keen on investing there, then contact us with your specific requirementsand we do not charge for any assistance we offer in regards to NZ.
As far as my Tag goes, it doesn’t say i promote NZ as “Property Investing New Zealand Ltd” is the Company name of one of my businesses.
So Don i’m not trying to have it both ways. I get contacted quite often from people wanting to buy in NZ, i could add NZ back in as a part of our service but i can’t as i don’t feel right about NZ. I have evaluate the the situation and decide NZ is not for me, then its not right for me to promote it to others. I’m sure your the same, except you evaluated the data and decided NZ is for you, fair enough.
Don i’m not trying to kick NZ all the time, just give a different perspective, especially late last year when everyone was promoting the heck out of NZ i was trying to give another perspective as an investor who had invested very heavily in NZ and decided it was time to move out. Back in 2003 it was Minimogul and myself who really lead so many Australians from this forum to invest in NZ. Then i was saying get out of australia and take it to NZ. A lot of people on this forum did exactly that. They did exceptionally well.
Who know one day i might decide that the situation has changed again and NZ presents itself as an opportunity i’d like to be involved in again. Today isn’t that day.
Regards westan
USA deals, cash flow equity and capital growth all in one property.
International Property Consulting Pty/Ltd.
Property Investing New Zealand Ltd
http://www.iproperty.net.auHi Rikky
well done thats great.
what i meant was hard to do in Oz was buy properties showing gross 14%. With capital growth potential.
i don’t doubt there are still people making money in real estate in Australia, its just very hard if you want to buy and hold.
regards westan
USA deals, cash flow equity and capital growth all in one property.
International Property Consulting Pty/Ltd.
Property Investing New Zealand Ltd
http://www.iproperty.net.auHi Mischa
i would only buy properties that were showing at least 14% gross returns.
I really would only invest for a net return of 20% (Return on cash).
Some stategies i’m pursueing are even better than 20%.
I need to get cashflow as i’m living off my investmment dollars so cashflow is very important, but not the only factor i really expect to make capital gains as well, so i’d buy in areas that i expect will appreciate.
I know what i’m saying wont make much sense to you as they aren’t possible in any market in australia that i’m aware of. You need to look overseas.
regards westan
USA deals, cash flow equity and capital growth all in one property.
International Property Consulting Pty/Ltd.
Property Investing New Zealand Ltd
http://www.iproperty.net.auHi Don
you seem very defensive about this, i was just asking questions.
I get the feeling that you are upset with me ! Is it because i chose to sell out of NZ. It was my decision, one i’m prepared to wear for better or worse. At the moment for Better as i see the Dollars Plumett to 1.24. I’m glad i got out of NZ. the currency is about 15% lower than when i got the cash out of NZ. The future will tell if i made the correct call.
However with the dollar so weak it may mean that NZ opportunities arise for those wanting to invest in NZ.
I was asking what your take was on the ground are buyer still there ? are vacancy rates high or improved?
In reffereance to the articles, I read them and i think you have overlooked some of the Facts
A $7 Billion deficit doesn’t sound healthy for a small country. There were lots of other messages in those statements, even if NZ doesn’t move into Recession like i said 12 months ago it was going to The economy has gone flat. I haven’t seen the latest data but the last figure i saw showed the NZ economy had shrunk (Jan 06). One more negative and thats a recession.regards westan
USA deals, cash flow equity and capital growth all in one property.
International Property Consulting Pty/Ltd.
Property Investing New Zealand Ltd
http://www.iproperty.net.auHi guys
Don, there is certainly a great story about the possibilities for Invercargill – get a hold of the “the lost Oil field” or something like that i can’t find my copy to see the right name but the author states there is a huge reserve of Oil south of NZ that was found by Hunt Petroleum in the 1970’s. There is also the possibility of the Lignite power generator ($2 Billion project), silica smelter etc. So there is plenty happening but the big picture of invercargill may not help the local real estate market.
Whats your take on current rental demand , has it improived ?
As the economy slides i expect buyers will vanish- after all its all about supply and demand- thats whayt drives up markets.whats your take on the factures?
regards westan
USA deals, cash flow equity and capital growth all in one property.
International Property Consulting Pty/Ltd.
Property Investing New Zealand Ltd
http://www.iproperty.net.auHi Flash
there wouldn’t be too many nicer places to live in the world than Queenstown, when we were living in NZ we had friends who had a holiday home there. We would spend as much time as possible holidaying at it more than they did !. i loved the views. From the main bedroom we looked out at snow capped mountains (making me NZ sick – can’t say homesick as aussies my home). i haven’t missed NZ all that much except for friends and when i think of it the scenery is sensational everywhere.
Is dolf still active in these markets ? Or has he moved on to new places ?
regards westan
USA deals, cash flow equity and capital growth all in one property.
International Property Consulting Pty/Ltd.
Property Investing New Zealand Ltd
http://www.iproperty.net.auHi solomon
well it does come down to the individuals situation, paying cash wasn’t an idssue for me at the time and by paying cash when i did finance out the property 12 months later i got money out on the new appaised value of about 82k from memory.
And at the time i hadn’t meet people who could give me fiannce on the buy price plus the rehab cost.
So knowing what i do today i suppose i’d just buy the property with finance and finance the reno cost also.
My loans are at about 6.5% and are prinipal and interest loans.
regards westan
USA deals, cash flow equity and capital growth all in one property.
International Property Consulting Pty/Ltd.
Property Investing New Zealand Ltd
http://www.iproperty.net.auHi solomon
with the first property i purchased it was for cash in texas for $55k i spent about $13k on it and then later financed it on a 30% deposit no doc loan.
i haven’t purchase anything by assuming an existing loan but a number of our clients have woith the support of our us based team. i don’t have the full handle on all the facets yet.
In the US with the finance contacts i use we have to put down 20% for a ful doc loan or 30% for a low doc.
In some situations we can get finance to carry out renovations also which is fantastic.
regards westan
USA deals, cash flow equity and capital growth all in one property.
International Property Consulting Pty/Ltd.
Property Investing New Zealand Ltd
http://www.iproperty.net.auHi snowflake
you will need all the usual building permits to relocte a home to land as you would if you were building a home there.
I haven’t done it for a long time about 8 years but then it was reallly difficult to get finance for that type of project , i think wespac may offer it.
the cost to move 25Km will be nearly as much as mving it 125Km as most of the expense is befoire and after the move. The time on the road is negligable in the big picture.
I moved a house 100km it came in two parts and cost about $20,000 to relocate onto new stums we put a new roof on also. But then the expense really started.hope this helps little.
regards westan
USA deals, cash flow equity and capital growth all in one property.
International Property Consulting Pty/Ltd.
Property Investing New Zealand Ltd
http://www.iproperty.net.au
