“Q” for MiniMogul

hiya susie and leigh,

no I don’t have finance, ….well maybe i sort of do…my lump sum which I am playing with is an advance on future royalties, so I guess that’s a form of interested-free finance!

Anyway i intend to hold them for 6 months, maybe do some minor minor renovations (paint? lights? door handles? taps?)
if i get time to go over there….or by remote control…

Then go for finance on all three as a package. Maybe a revolving line of credit.
I will try a NZ mortage broker first. If I did it here I would try Just Super first – they are supposedly offer one of the best mortgage deals around…and they’re my fund.

or failing that a low docs as I am self employed.

I haven’t bought in Australia for several reasons….1) can’t find rates of return as good as in NZ 2) I know Australia pretty well having toured a bunch of times but I know NZ even better 3) closing costs are less 4) no CGT 5) prices are way lower in NZ so can get more houses for your money and 6) I like the web-site better! ( seems silly and trivial but try searching for properties on realenz.co.nz and then try searching on the Aussie sites and you’ll see what I mean. Once you put the hours in you want the interface to be pleasant…)

part two coming soon

I have found houses with existing tenants work well for me (that tells me the house is liveable, and at what price. also then if the tenant is OK then i don’t have to find a tenant.) Or else I look for just a great buy. I may or may not wrap to a tenant at some point but I haven’t ‘gone there’ yet.
I don’t really look for renovations as such.

Ex-state houses work well….they are becoming desirable, believe it or not. They are usually very solidly built.

I make an offer with my figures based on the fair market price based on what similar houses in the area in this price range have sold for in relation to CV. (i work out a ratio i.e, 20 percent over CV or whatever it averages out at.)
Although I am as much for a bargain as anyone i don’t want to lowball. I also ask the agent what the ‘real’ price is first before i make the offer. Often the answer is ‘I know the vendor wants at least X’ which will be a lot lower than the list price.
At this time of year sales can be quite slow so there is a chance to do better than say in January when there are more buyers around.
Beg, borrow or buy the data (i got it from estate agents for free – just ask them for a printout) as to what places in an area sell for in relation to CV/GV . I also find out the rates of course. and the property manager’s fee, and if the property manager will take the property on (sometimes they say no – that’s enough of a reason for me to not buy. They might say they wouldn’t touch it because they’ve had trouble there before in which case i don’t want to either.)
Then I put in the offer…

So after my offer is accepted (with conditions subject to LIM report, which is all the council documents about that property- quite important) solicitor’s approval as to all terms and titles, and builder’s report. I put in ten days to get that done then proceed with the reports and if all good then it goes ahead.
I teed up a local lawyer before I put the offer in which i highly recommend especially if you are a first time investor as i was, also just to get the scoop on what you need to know for NZ if you are from Aus.

I’ve only done this process three times, one property has closed, one I pulled out because the builder’s report was bad (and it was soooo worth the money to find that out) and one is pending the report.

Interestingly the thing that gave me confidence to buy sight unseen subject to report was the fact that when I looked at a house in person, thought it was brilliant, i was completely wrong. So i figure, there’s no point in me looking really!
Also it takes the temptation to fall in love with a place away if you are doing it more based on the numbers. As a chick I find this helps. actually.

What else…oh yeah this site has market rent info for NZ

http://www.minhousing.govt.nz/tenancy/Market-Rent/market%20rent%20region.asp

and this is the site I mainly look on
http://www.realestate.co.nz/

cheers-
Mini

hi peter,

>I see the main drawback being that the tenant may be >currently paying less rent than what you might charge if you >were offering the place to a new tenant.

Possibly true however there is the risk that the tenant will move if you put the rent up. Also I figure that if I have found a good deal that has already got a high yield why be greedy!
Basically, a local tenant and local landlord have set the price, and I don’t feel I need to argue with that for the time being. I will put the rent up in line with inflation though.

>then it might mean the buyer-investor might be able to get a >better deal, which is good for both the investor and the >tenant.
yeah – one of the properties I was looking at, the owner only wanted to sell to an investor for the sake of the long-term tenant. I didn’t go for it in the end because it was almost double the price of the one I ended up getting, but wasn’t pulling in twice the rent,,,,

cheers-
Mini