Hi All,
I have several IP’s and aim to continue buying +cf properties mainly in NZ,and was looking for advice from you more experienced guys about the best way to continue financing them without creating a nightmare for my accountant and myself. Here is a rough summary of my position :
ASSETS
PPOR in Aus. Value $450K (in own name)
IP1 in Aus. Value $200K (in own name)
IP2 in Aus Value $210K (in own name)
IP3 in NZ Value $50K (NZD) (in Trust)
IP4 in NZ Value $95K (NZD) (in Trust)
IP5 in NZ Value $48K (NZD) (in Trust)
LIABILITIES
Total debt of around $530K (AUD) which includes $44K on the PPOR, the rest are two investments loans against the above properties and a LOC used for NZ purchases.
IP 1 & 2 are slightly -cf but good capital growth. IP 3,4 & 5 are +cf in NZ.
Options:
Borrow in NZ against the 3 properties there and keep leveraging off them?
Extend the LOC in Aus against the increased value of the Aus IP’s?
As stated I want to continue the NZ investing but want to ensure that longterm it doesn’t become a financial bowl of spaghetti if you know what I mean. However I’m also conscious of not wanting one bank having a hold over all properties.
Your suggestions please !
Come on you guys with lots of experience, how about some suggestions…
I would suggest you keep NZ loans for NZ properties and Aust loans for Aust properties. That way you have no exchange rate risk.
As for future expansion – do what you can afford and dont go over the line where you cannot sleep at night due to worriying about making interest payments.
Hi hux
i saw your post earlier but wanted to think it through a bit first.
Yack has a good point about the finance for NZ properties be based in NZ. Normally i would not consider other options however the NZ interest rates are now higher than australia’s and maybe going higher. So the andvantage of having the debt based in Oz is lower interest rates. You can get 2 year fixed for about 7.5% and 5 year fixed for 7.95% here in NZ.
So the final verdict for me, I’d be tempted to keep the NZ finance in NZ (as Yack has said) but lock in fixed interest rates. Your NZ deals should be still showing some excellent returns even if the rate is 7.95%.
Your not tempted to sell one of your OZ properties? I’m not saying you should as i know nothing about them but just asking the question for you to consider.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
Does that mean when you go for a loan in NZ they are happy to look at you AUS income?
PK
Hi purplekiss
yes they want to see your income profile. It’s the same as what banks do in oz.
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
Thanks Yack and Westan. I think the general idea of keeping the NZ finance separate has merit. Now I have the 3 freehold properties in NZ it should be fairly easy to leverage against them if I buy right.
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