All Topics / General Property / Equity in Australia and NZ incompatible

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  • Profile photo of twinpeakstwinpeaks
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    @twinpeaks
    Join Date: 2004
    Post Count: 8

    I recently spoke to a financial adviser and one or two banks who told me that you could not use equity in NZ to buy in Australia and vice versa.

    You have to develop each portfolio separately.

    Does anyone know if this is the case and furthermore do you see any economies of scale in focussing on one country rather than splitting your portfolio? E.g. would banks lend more if you have 10 pos cash flow properties in Australia rather than 5 in NZ and 5 in Australia, considering you would still be getting the same income from 2 sources?[cowboy2]

    Profile photo of TzakiTzaki
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    @tzaki
    Join Date: 2003
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    You could try asking westan or minimogul they should be able to tell you

    Steve Kerr

    Opportunity knocks softly, listen carefully!

    Profile photo of elveselves
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    @elves
    Join Date: 2003
    Post Count: 507

    why not get something organised like a line of credit, then buy what you want where you want?

    Some lenders will consider taking into account income and equity from one or the other, but from what I have heard, they kinda reduce it.

    But I cant really give you absolutes either.

    ” a blind man may see what a sighted man may not”

    Profile photo of Michael RMichael R
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    @michael-r
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    I don’t personally know of an institutional lender that would not lend on equity in Australia for investment in New Zealand – if the numbers stack up.

    If the loan is secured in Australia and you default, the asset in Australia is foreclosed or otherwise. The loan is not necessarily impacted by the New Zealand investment in this regard.

    However, if the property you intend acquiring is not capable of servicing the loan [in the country of origin] – taking other income/credit history into account, then it is not likely an institutional lender will finance the transaction.

    In terms of how many properties you should acquire in either market; the “number” of +CF properties you have in any given location is somewhat irrelevant in this case.

    The key is acquiring properties which maximize your portfolios ROR – offer the highest income/capital gains over a defined period, and demonstrate the least risk.

    — Michael

    Profile photo of geogeo
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    @geo
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    Hi Max,

    That’s not correct – Banks will lend you for NZ. I just spoke to the CBA – they said they will lend me a loan if I have security here for it. It’s like they lend you money for your security property, then you do what you wish with the money. As long as you repay the loan with interest to the bank, that’s all they care. Im sure the other banks will do likewise as the CBA.

    Kind regards,
    George.

    “If You never never ask, you’ll never never know”

    Profile photo of CastleDreamerCastleDreamer
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    @castledreamer
    Join Date: 2003
    Post Count: 288

    Hi guys,

    I have property in Australia. Had it valued, took out a LOC to 80% value (therefore no mortgage insurance). The LOC sits in a separate account, and I use it specifically for the deposits and expenses for purchasing NZ property. Your NZ portfolio is completely independent in that it is in no way secured against your Aus portfolio or vice versa.

    Then you just get to do multiple tax returns in two countries!!

    Cheers
    CD

    PS, with this setup I still had great success getting great lending in NZ based on my credibility as an investor in Australia.

    CastleDreamer

    Profile photo of SiboSibo
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    @sibo
    Join Date: 2003
    Post Count: 126

    I agree with George. If there’s any problem its probably related to the way your finances are structured. As George said, you can borrow against your house to do whatever you like.

    Regards,
    Si

    Profile photo of Hux001Hux001
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    @hux001
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    I’ve arrived a LOC here to use for purchasing in NZ, the LOC is secured against Aus properties. I’m hoping to use it for deposits in NZ and then borrow locally there for the balance, that way it will go further – so Castle Dreamer and others I may be looking for contacts for financing up to 80% in NZ soon. My bank also said they would take the rental income into account from NZ but not the property as they can’t put a mortgage on it.

    Profile photo of AceyduceyAceyducey
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    @aceyducey
    Join Date: 2003
    Post Count: 651

    It’s pretty simple.

    You take out a LOC over property somewhere in the world….Then that cash is YOURS to do with as you please!

    If you choose to use it to invest in O/S assets, the things to watch out for are the legal implications, not the lending ones!

    If you want to cross-collateralise assets in different countries – that’s an entirely different story!!!

    Cheers,

    Aceyducey

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