positivly geared in new zealand

this is my plan
i have about 450k after i sell my house. I have a bussiness loan for $240k which is seperate.............
I want to invest my 450k into property returning 7.5% thus i can make the property cashflow positive by putting down a 25% deposit for each one. So i should be able to purchase 1.8 million of property without having to make a payment.
How does this sound? I am the only one of me and my friends/ family who agrees/understands this plan
I currently own and live in a nice house in atwell waters but i want to sell to to finance the above plan.
From my research i think the best places to purchase quality property returning 7.5% plus would be in new zealand. Although i am not sure where, once i have sold my house I will go to my broker and see how much i can borrow..to spend in NZ then i  defiently will travel there late this year/ early next year to see suburbs for my self. Any information or advice anyone could offer would be greatly appreciated. Can any1 see any problems with this plan???

Hi Jamie,

Our family have moved over to New Zealand 3 years ago  from Sydney and we live in Kerikeri Northland app 3hrs North of Auckland .Certainly wouldn't get 7.5% return here. I Have just started looking into house values etc in the different regions.For myself I like to be reasonable close to the investment property, if it is a do-up then travel costs are keeped down, property inspections are easier.
What appeals there is no capital gains tax here and land tax. I am not a seasoned investor , but am always looking. When the exchange rate improves you will also have more money to invest.

Karen

yeah the days of 7.5% return in NZ are gone. unless you can create it of course by adding an aditional bedroom or dwelling etc. probably the average return on invetment properties in NZ is now between 5 - 6%

Ian Wood
iwood@investorfinance.co.nz
Investment Strategist & Mortgage Broker

Hi jamiedellam ,

I like your ideas..... I would like to assure you that your plans is very strong and it will take guts and copious amounts of resilience to others opinions.... epectially if they differ in opinion from you (what else is new right??).

I can give you some quick tips based on my own expereince: ( lived in Sydney until Dec 06) and had brought properties in NZ while living there all in a period of 10 months in rapid succession..... anyway to the point here huh ?? :o)
1. look at financing in NZ with NZ brokers ( got plenty of finance upto 95% and all while living in AUS).
2. properties that are returning gross returns of 9% and higher are still easy to find ( I usually pass them onto other investors and keep the higher ones that I find).
3. Give youreself a 5-10% finance buffer (if you can) to allow for any blow outs in your carefully laid out plan to success (this will cover rent vacancies and the un expected repair or mainenance issue that arises from time to time).

4. Look for the hidden gems .... as the ones that stick out are gone before most find them (usually lots of cash to tantalise the sellers).
5. Build your team of experts .... don't kick yourself too hard if you make a mistake.

6. Do something.... take action ... and take it now!....... that is what success is all about ..... face the fear and feel the true reward for your courage.

Have faith that you will succeed.... I invested where many told me I was nuts and I made over 300% returns on my cash in the deals.... some were over 340% on my cash in..... eg I bought a house in Oct 06 in NZ and put in only 16K of my own cash and now have reaped the rewards and walked away with a net profit of  $61K (NZ) not back in 8 months = 1032% interest on my investment ....

Best of luck wit hyour plans and I hope you prosper !!!!
Best regards,
Kiwi!

Banks said no... We say Yes!
www.rent2ownaus.com
www.rent2ownnz.com

Hi Jamie Dellam

I am from Christchurch but live in Sydney and the return there is pretty good at the mo.
We (me, brother,parents 33% each) bought a wee flat in Bexley, Christchurch for 180k in April, it was tenanted for 190 per week but they were problem tenants so I went home for a few weeks and we got them out of there (their lease had expired so they were week to week, thank god) I spent some quality time with Dad painting and just generally tidying the place up and we had plans to ring an agent to manage the palce when an older man that Dad knew through work enquired about the place.
He is 63 and will stay forever, he was in a very cold dank place and he was getting sick from the lack of heating but he was paying 160 rent and couldn't afford anymore. Well I got in touch with WINZ (NZ version of Centrelink) and enquired about rental assistance and he qualified for it so now he is still only paying 160 per week but the govt pays 70 to bring the weekly rent up to $230. The tenant loves the place, we installed a heat pump for $1600 and paint etc would have bought the total of our reno to 2k but we now have a long term tenant who always pays on time, no need for a property manager ,and regular income. Plus a recent valuation showed the value as 220,000 so we are stoked with the place.
NZ is a great place to invest, especially if you have a good deposit, try to get your hands on a copy of the May issue of Australian Property Investor Magazine as it has a big spread on NZ investing.
If you have the time and the money you will come out on top.

Good luck,
Emma

Hi guys

Finding cashflow positive in NZ is really a thing of the past - in the last 5 years they have all been snapped up - the key is to develop as this is just starting to become the "Hot Craze"

Kerry Christian
How2 Property Limited
www.how2.co.nz Email: kc@how2.co.nz

Go to NZ and search the suburbs?

Travelling NZ and getting your bearings is alot harder then major cities in OZ. For the sake of convenience and time id suggest just  Auckland. What your suggesting is a big move logistically in terms of approach, though im sure you can achieve your goal. Best of luck

Reeco

Hi Jamie

Give me a call or email sapphire101@bigpond.com
I have a property in NZ I need to discuss with you regarding a joint venture arrangement.

Regards
Ian
0410 638 657

Hey Jamie,

How did your search go?
add me on msn  :)

cheers

Sean

" You only get what you put in "

" If you think education is expensive try ignorance " Robert K

Young property investor - From Auckland New Zealand

You can contact me via msn on red123nz@hotmail.com

I am very happy to talk to people from novice stage to people who are the Robert k's and Steve Mcknights of this world :)

we purchased a house six weeks ago in invercargill with yield of over 8% on a subdividable section in a very well regarded part of town which is now fully tenanted on fixed term leases. Granted they don't grow on trees these days so some say they don't exist - they do! 

See what's happening at www.cashflowproperties.co.nz

These days if you want positive cashflow, forget New Zealand, with interest rates at 10.25%, look at the United States  

Nigel Kibel

www.propertyknowhow.com.au
www.changingplaces.com.au
Buyers advocacy
Australian and New Zealand The United States Property Researcher and education

most banks in nz have fixed rates under 9%  at the moment. The catch is you would have to fix for 5 years to get those. If you have a good broker you would get at least .5% (probably more) off that as well as the bank paying for your legal fees, zero application fees, waive valuation fees, lends of 90% lvr to aussies (85% plus for self employed without income history)  without any restrictions and foreign income can be used  in servicablility calculations so it is pretty easy to get funds in NZ.  Some of  the nz brokers my help here but they do not charge LMI (have not heard of it there) either which is significant for self employed or full time investors. There are some excellent brokers on this forum servicing many countries but borrowing for usa is not that easy all the time.

See what's happening at www.cashflowproperties.co.nz

Your right Don borrowing for the USA is not that easy, however as long as you can prove income and have two years worth of tax returns it is easy. My concern with NZ is that it is at the top of the cycle. Invercargal is a cassic example. You were getting wel over 10% not long ago now 8% in looking good. You will do far better than this in main cities in the United States. 

Nigel Kibel

www.propertyknowhow.com.au
www.changingplaces.com.au
Buyers advocacy
Australian and New Zealand The United States Property Researcher and education

Hi, Nigel:

I am at auckland and I agree with what you said about NZ. Talking about USA, I heard that a foreigner need bear 6.95% interest instead of 5-5.5% which is applicable to US citizen or PRs. While it is always good to use high leverage for property investing, do you know some good brokers in US to help? Especially low deposit and good interest rate for a foreigner to buy US property. 

Yes nigel 8% is a very good yield for a residential property at the moment down south. I always stick up for my adopted home town as there are bigger things on the horizon which is why I am still buying there. I admit that it would probably be hard for an outsider to find good value but we are working on a deal (residential) right now that would return well over 10% with a nice equity gain on purchase.

I am also buying in OZ again right now which is a huge buzz.. Maybe the US would be the go also if there were more hours in the day!

See what's happening at www.cashflowproperties.co.nz

Hey All ... good to see some action happening here again!! We have been getting 14-16% (better cash on cash return though) Yeild.... using Lease options and sandwich lease options in NZ.

Some we have gained control (one for as little as $1.00) (yep...one Dollar) .... now that is a good way to get properties secured and develop some cashflow in a down or sideways market!

lots of good bargains to be found if you nose is to the ground.
but most of all .... have lots of fun out there.
Cheers
Kiwi

Banks said no... We say Yes!
www.rent2ownaus.com
www.rent2ownnz.com

Hey Kerry,

Not sure I agree with you here, as others have mentioned still possible to achieve 10% plus cahflow deals in the deep south. I know the market has changed since you made that comment, however property development would seem higher risk in a market where property is taking longer to sell & usually below asking price!

Cheers, Paul