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I agree about the importance of having a strategy written down and having defined, time bound goals. That is the part I am struggling with at the moment. I am finding it hard to settle on one strategy and keep jumping to one idea to the next without following one through. I am desperate to take action so determined to set the strategy and define goals in the next few days. Otherwise I will have fallen into the analysis paralysis trap. Good luck with the deal you have on the go.
Sinead
Hi Rob & Jo,
Thanks for the link. I have found this site to be very useful. Have you decided which suburb to focus on? I’m going to look in West Auckland this weekend, probably Henderson. Wish me luck!!
Sinead
Auckland City Council charge $210 for 10 day delivery, $270 for 4 working days. You can also go to the council offices in Graham St and view the file of any property for $12. You pay per sheet for copies of any of the documents you want to take away. This is a great option if you want to view all applications, correspondance, plans etc.
Great to hear from you all. I have also registered on http://www.propertytalk.co.nz. In Auckland I plan to look out west. I have friends who have found some positive cash flow properties in West Harbour. I am also considering commercial althought at this stage I don’t know anything about it except that returns are supposed to be higher than residential. I am keen to invest close to home i.e. Auckland.
I have also considered selling a property I own in Grey Lynn to try to reinvest in areas with a higher yield. The costs to sell are high which is making me think twice about it. I might be better off just using the equity.
Hi Paul,
I would also like to add my congratulations on your achievements.
Great idea about the clause re geting tenants, that adds a safety net.
I am curious, have you sold any properties. Before Saturday’s seminar I was sold on the idea of buy and hold and use the capital gains on existing properties to be able to buy more. Now I am having doubts… The costs to sell are significant with agents fees, depreciation recovery, advertising etc, etc.
Would be very interested in your views.
Hi,
Thanks for your response. I have the KPI magazine and there is lots of rental info in there but I can’t find anything on vacancy rates.
I have also been through the REINZ site and again there is lots of information including links to research done by AMP and Massey University but again I couldn’t find anything on vacancy rates.
I guess I will have to check out each town individually through the local property managers to get a good feel for it.
I think LIM reports are very important but only if you understand the information they contain. The limitation of LIM reports is that they cannot point out unpermitted work as the council don’t know about it !! You need to be able to recognise alterations which have been done which don’t appear on the report and require a permit.
I think you may be confusing depreciation recovered with tax on the capital gain when you sell. Depreciation recovery is always triggered when you sell a property at a profit(assuming you have claimed depreciation) regardless of how long you have owned the property and is not in any way related to whether you are a trader or investor. Depreciation recovery applies to all ownership structures equally.
The distinction between being a trader or investor is important with regard to paying income tax on the capital gain realised when a property is sold. If you are classified by the IRD as a property trader then regardless of how long you owned the property you will be liable to income tax on the gain. If you are a property investor the IRD will look at the original intent at the time of purchase (keep evidence of intent e.g. company minutes). If the intent was to hold long term but cirumstances changes and you ended up selling then you would most likely not have to pay tax on the gain. If on the other hand you always intended to sell the property then you would be liable for tax on the gain.
I attended Steve’s seminar in Auckland yesterday and he said that he and Dave have used NZ lenders for NZ properties to avoid the exchange rate risk. Because they are not NZ residents he said that the banks will only lend on 70% LVR.
Hi Rob and Jo,
Met you yesterday at the seminar. I too am feeling all fired up and ready to go. This is post number 2 for me. One more to go to finish todays homework. I have been reading Steve’s second book tonight and one message which I got is not to focus on where but to focus on how. I am still trying to work out how to apply this.
Good luck
Sinead
Depreciation is recovered when the sale price of the property is greater than the written down value of the property. This is the case regardless of how long the property has been owned. It also doesn’t matter how the property is owned. The rule applies to all ownership structures. The depreciation recovered is treated income in the tax year in which the settlement occurs.
