Forum Replies Created
Hi KP
i know you asked Nigel the question, but there has been no answer so heres a deal i’m buying
For a 4 bedroom/2bhroom duplex for a 165K
Income $2,100 (1050 each side) $25,200 PAMortgage Interest
$115,500 @ 6.5% $7,507 PA
Insurance and Taxes $480 pm $5,750 PA
Repairs – they are new so allow 500 per year $500 PA
Management 8% $2,016 PA
TOTAL EXPENSES $15773 PAProfit $9,427
Figures on fully occupied (perhaps allow 5% vacancy)Cash into deal 30% of $49,500
other costs 3,000
Total $ 52,500Return on Investment 17.9%
If we have capital growth of 7% on the appraised value of 190K the the value increases by $13,300 in the first year 13,300 plus 9,427 = $22,727
Return on investment 43.2%
We can never be certain of any capital Gains.hope that hopes
regards westan
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Hi auzzielad
i’ve heard lots of reports about the US property bubble. The thing about the US is it isn’t one market, its many.
There certainly is a Bubble in California, New York City, Boston parts of Miami etc, the east coast and the west coast.
But there are huge parts of the US that are not experiencing a Bubblelook at these acticles, look at what this article says about areas i’m investing in, in Texas. San Antonio and Houston are where i’m buying.
http://www.usatoday.com/money/economy/housing/2005-08-16-home-prices-usat_x.htmhttp://money.cnn.com/2005/05/12/real_estate/re2005_100markets_0506/
or if your really interested read 75 pages http://www.ofheo.gov/media/pdf/1q05hpi.pdf
or 42 pages http://www.ny.frb.org/research/staff_reports/sr218.pdf
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Good one foundation [biggrin]
regadrs westan
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Hi Kiwikid
i think you are being harsh on Kelly. I know Kelly and she manages a number of our clients properties. As all the Invercargill managers do.
they all underperform from time to time.
i don’t think she is as bad as you say. i’d recommend her on our experiences.
regards westan
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Hi Dr X
just my luck to request a survey before you offer money.[cry]
sorry i’ve been flat out will reply with my survey soon.
regards westan
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Hi Don
great news for invercargill.
is there any word on the push to make the SIT a University ?
I am sceptical if it would ever happen and even if it did would it be a benifit ? The SIT is currently great for the city.
regards westan
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Hi Bez3000
i believe this is the case
you will usually find that if you buy a property in a company then you will be asked to make a personal gaurantee anyway. So they would want you to pay any money owing.
Secondly if you buy in a company then you will loose the 50% discount on capital gains that you receive if you hold the home for 12 months. (companies pay CGT on the full profit)
Thirdly is you transfered the property to a company you would create a sale and have to pay tax on any profits, secondly you would have to pay stamp duty on the purchase.
I’ve lived in NZ for the past 2 years so maybe things have changed since i left Aussie ??
regards westan
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Hi Nigel
to make it easier for yourself to do the calculations on the in the city your in the property taxes are roughly 3% of the council assessed value.
regards westan
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Hi Guys
you might also want to PM “Minimogul”, a famous personality on this forum, but absent for a little while.
I know Mini has done a lot of research into this matter.
regards westan
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Ok Living in NZ (for another 4 weeks then home to melbourne)
Investments in NZ, Adelaide, stawell Vic, Shepparton Vic, Texas, Buffalo and Central America.
They don’t have to be next door for me.regards westan
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Well done seaqueen on the good buy
i reckon that this forum is the one place that we can share our success’ without thinking that we are showing off. Unfortunately often our “Non Investing Friends” don’t like hearing how much we are making. Especially when they know they should be doing the same.
So here us a place we can celebrate success. Lets do more of it.
regards westan
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Hi terry
i have a good friend in Osaka, who is also an investor
he manages the Hyatt hotel, where are you staying ?
he get on the forum from time to time, i’ll email him your post
regards westan
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Hi Matt
what is the problem ?
is it that the managers call you all the time ?
or
is it that when they do its with frustraiting issues ?
Unfortunatly when you own enoughh properties that becomes part of life. I have at numerous times owned 25+ properties and its just part of the deal. But as other have said be firm and consistant and if not happy move managers.
Unfortunately Property is touted as passive income, NOT ! You need to be involved with your assetts. If its not what you want sell and buy Managed Funds or Property Trusts.
regards westan
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hi all
asdf, sorry i can’t say on the forum where i’m buying. I don’t want to. Email me and i’m more than happy to tell you exactly what i’m doing in Central America, or PM me.
regards westan
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Hi all
ttman i was in the same situation in 2003 my accountant said he didn’t want to deal with foreign income matters, which was a shock as he is a very prominent accountant in Kilsyth. I was really disappointed as he is a top guy and great accountant.
I now use Active financial Answers, look up there web site http://www.activefa.com for there Melbourne office,
Just did it for you
Melbourne68 – 72 York Street
South Melbourne Victoria 3205
Ph: 03 9699 7310I’ve met Martienne Freeth from there is she is fantastic, very knowledgeable. Personally i use the QLD office and Barbara there who is also excellent.
hope that helps
regards westan
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LOL
good one, thats what happens when someone drags up an old post.[blink]
We will blame you hampster ! [biggrin]
Anyway SE of SA is a great spot to visit.
anyone else on the forum want to report whats going on in that part of the world
regards westan
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Hi Guys
wow a fair few replies here.
Wilandel- a CD ? maybe thats just a free plug for an excellent product ?
Kiwiduvet – Del made the coment about Buffalo being another Tok from the perspective that people like to slam Tok. I’m in agreeement with you that its better than Tok. I chose not to buy in Tok, yet i’m buying in Buffalo so thats my response. In regards to Buffalo being a sort after place for investor, yes you are right again, investor from all over the world are chasing opportunities in buffalo right now. Its not just Aussies and Kiwi’s as you have already pointed out. I’m also aware the Poms are big buyers. The UK pound is worth so much these guys end up paying next to nothing for the home (well thats an exageration, but you get my point). Californians and investors from New York city are also big buyers. i was talking to Dan the other day, he is one of our contacts in buffalo- he keeps telling me its amazing the interest buffalo has come under over the past 18 months- its been discovered !
Ozi- i agree with a lot of what you say, but think you are overstating it somewhat
Taxes- a 40,000 home is about $1600, (in NZ i was paying this in Wairoa for example) so its high but not extreme. if you buy in the Suburbs of buffalo then it really gets high (over $3000).
Management- well yes 10%, but thats always an expense with property investing. So a 40k home rented at $8,000 per annum thats about $800 if fully occupied for the year.
Insurance – yes a cost but once again $400 isn’t too bad.
So a 40k home renting at $8000 pa after these costs ($2,800) has cash flow of $5,200(a lot better than the $3000 net you mentioned. This goes towards maintenance, vacancies etc, so there is still lots left over. .
Regarding people being sucked in by the high yeilds, At least these properties are putting money in your pocket, can’t find them in Au or NZ now.
Mortgages- firstly it is possible. we have a guy in buffalo who is expense to set up and interest rates are 8.5%, expensive by US standards (still lower than the NZ floatong rate !)
Then there is Richard Taylor who can also get some finance on NY properties at a better rate and lower set up costs.
Maintenance- yes things in NY can wear out quicker than we would usually expect. But the costs can also be way less than we expect in Australia, materials are so cheap and wages can be also. For example roofs are a big ticket item, if one needs to be replaced it could cost as little as $2500 (if it can be layed over the top of the existing, usual practice in NY). If there are 2 roofs already you need a complete tear down it could cost $6,000). Roofs only last about 25 years so you are right to mention it, i’d go futher and if people are cash poor then they should be putting money aside for future repairs. At least put aside $500 pa.
As far as buying in Good areas i agree 100% there is a real danger in chasing even higher returns and investing in realy low areas. I know in Buffalo the bad areas there i wouldn’t buy at any price. We get a lot of our properties in better areas, One I own in Hoyt st is 4 blocks from a really beautiful part of the city near soldiers place (in north buffalo) and a lot of the properties we have sourced are in the University area (Buffalo has the largest Govt Uni in New York State, Remember the population of NY State is the same as Australia’s).
Nigel-Frankly I do not care what the market is doing at presentThat suprises me ,that you say that. As for me that is a key factor. I like to make money from day one. The stategy of buying at the bottom of the cycle has proved very rewarding for me. As i mentioned before i’d rather have my money working for me, than sitting by waiting for the market to come back. Assume i invest the money and get 20% PA return on my money then in 4 years i’ve doubled my money. I’m a full time investor so making my money work is important to me.
As far as Texas goes i’m glad you agree that (city deleted by westan) in Texas is a great spot to invest. I tried to keep it a secret for our investors, obviously someone has blabbed to you, (i know who it was). Now you have been there i will have some competition in sourcing properties. Anyway competition is good for the investors out there. I’m extremely happy with our contacts in (city deleted by westan) and (also deleted by westan). While i like Buffalo, more of my own investing dollars are going into Texas. But I will continue to aquire more real estate in Buffalo. You like my judgement on (city deleted) maybe you should look at Buffalo for yourself rather than rely on what others tell you ?
Just for the record, i think Christchurch will be a good long term investment for your clients (not good short term). But sorry NZ its Texas for me.
Regards westan
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Hi bec
how is the market there in SE of SA going.
i bought 2 properties in Millicent back in 2002 for about 50K (Stark st and Walker st) sold them a year later for about 88 and 93K off memory. Used the money to invest in NZ (which i’ve now sold also).
Just interested in the market , do you know Millicent and what do you pay for well presented brick ex trust homes now ?Millicent had heaps of “possible” and likely projects that had the potential to stimulate growth , (eg the wind farms, bio mass generator). Did they get legs ?
I live in NZ now so am out of the loop. Returning home to Oz in Dec.
regards westanProperties in the USA 15-25% returns- email to join our database [email protected]
Hi Nigel
thankyou for giving me the chance to explain why Buffalo has become an area i’m investing in.
Sorry if this seems like a sales promotion but i was asked the question. I’m in a hurry right now so i’ll back up the statements i make with more info later.
No one denies that Buffalo has been through the wars as a city over the past few decades. This city once had more millionairies than any other city in North American. Sadly its star has now faded.
After decades of not only no growth but actually negative growth i can underdstand why those who have never been there would think “why Buffalo”?Today Buffalo offers the opportunity to buy very high yeilding properties at a very cheap price. For example a 20% gross returning property even after all costs still shows incredible cash flow.
But what about Capital growth? Well while i never promote Buffalo as an area that you would buy in for Capital growth i actually believe that it will have better capital growth over the next few years than either Australia or New Zealand. After many years of no price growth buffalo is on the upward move, sure its slow at the moment just 5% but its heading up. Lets look at a $40,000 home, very cheap by US standards, it could rise 50% and it would still be incredibly cheap. Now i’m not saying that prices will rise that amount, but if they did it would still be cheap!
What about the ecomomic picture for Buffalo, well according to the latest figure the city showed job growth. Not really high growth but still growth, and growth better than many other cities in the US.So why am i investing in Buffalo, well for cashflow and i believe given time i’ll see growth also. But hey if there no growth i’ve still got cashflow.
Nigel i was put off investing in Buffalo when i read the statistics on the area, So i invested in texas instead. It was after i went there that i realized how superior this market was to anything i could buy in NZ or Australia.
I love the US so much from an investing view that i’ve sold 95% of my portfolio in NZ to finance my investments in the Northern hemisphere.Why the Us over NZ ? well as i’ve stated i feel that the market here (i live in NZ at the moment) is going flat for a long period of time and many of the market commentators are predicting a downward move. You make the comment that given time the market will show appreciation. History shows you are right, but why buy a property that will cost you money ? If its for capital growth then buy something thats going up now not something that will rise in value in 5 years. When you add up all the money its cost you to hold the property, plus the loss of opportunity to work that money, plus keeping up with inflation it may indeed be a long time before you break even. So its goodbye to NZ for now, who knows if the market drops enough i might be back to buy.
Thats why i’m investing in Texas and New York State.
Regards westan
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