Hi Lucy, I bought twice under 20 and one under 30. All since April. The one under 30 is ‘delux’ in a grandmotherish way, with nothing to do
except plumbing, the other two were dumps and so i threw a bunch of money at them and they are super-fabulous now, new bathrooms, polished floors, painted, repaired, the works – and total for reno’s included is still for under 30K each. So I think another way to get a good rental property if you want to not spend much cash is to factor in 5-10 k for renovations and maintenance and buy a dump/doer upper. HOWEVER only buy it if it’s structurally sound as per builder’s report otherwise you could be wasting your money. And the area matters too.cheers-
MiniHi Rod
The 8.5% came from the 2001 census report so the figures are a couple of years out of date.
A Property Manager would have more idea.I think the number of retirees retiring,selling up and moving into a smallish town is increasing.
They are able to capatilise a lot of cash for their retirement that way.Also it is much cheaper, rent wise, for those on benefits to live in the small towns. Who wants to pay $300 per week in Auckland when you can rent for $100 to $150 per week in a smallish town.
Hi Lucy Lou
Welcome to the Forum
Do you want to swap email addresses and compare notes on Tokoroa.Regards
hi muppet,
the census figures I’ve seen show different numbers. The 2001 figures I saw for Kawerau had 19.3% unemployment!!
I hadn’t seen the figure for empty dwellings, but when I spoke to the local PM they had no empty houses on there books and only a few vacant units.
Rod.
Hi Rod
The figures I have been using I acquired from Diamond when she and her husband were over during the holidays.
Her husband had a very comprehensive computer program of all the cities, towns and boroughs of all areas in NZ. I was able to save it to my computer.
It shows graphs of rentals values for all types of housing, empty dwellings, ethnic groups, pop changes since 1991, employment status, and occupations.
Sheet 1 has it in graph form and sheet 2 has the numbers.The graphs show comparison of the particular suburb, the general area and the whole of NZ.
eg Kawerau, Bay of Plenty, NZ.
Unemployment for example. Kawerau at 11.12%, BoP at 5.9% and NZ at 4.8%.I think the figures were accurate to 2001.
Anyway who can believe Government Departments?
New tenant starts on Saturday. All houses are now fully tenanted.
Regards
Been following this thread with interest.
A few questions for you to all think about:
– Australian CGT and income tax still applies eventhough the IP is in NZ.
– as far as I’m aware there is no CGT in NZ.
– what about setting up an investment company in NZ to buy the IP. That way the income and cap gain would be taxed under NZ law (lower tax rates than here than in Oz).
– exchange rate risk. By holding an investment in NZD you are exposed to any increases or decreases in the exchange to the AUD. Over the last 5 years the exchange rate has fluctuated from a low of 0.7450 (9/00) to a high of 0.9300 (3/03).So if you had bought an IP in NZ in 9/00 it would have appreciated around 25% in AUD terms before taking into account any NZ cap gains. However this can also go the other way very quickly. In the ’80’s a lot of people got caught out taking out Swiss franc loans. At that stage interest rates in Oz were 17% but only 3% in Switzerland. And then the echange rate moved and people ended up owing more than they had initially borrowed.
The NZ economy seems reasonably stable so I wouldn’t expect any volatile movements in the short term but definitely something to consider in your overall investment plan.
This link has some good info on NZ economy:
http://msi-network.com/content/doing_business_in_newzealand_page2.asp
Hi Guys
None has mentioned Rotorua yet.
Check out this link….http://www.trademe.co.nz/Real-estate/Houses-for-sale/0350-0079-/auction-6434549.htm
Regards
muppet!!!
Oh my gahd that is exactly the sort of deal I dream about!!
And if I had cash tomorrow to buy I would definitely check this one out!!! rotorua is a decent sized city,,,tourism…mainly the houses are more expensive than this so this could be a really good deal…especially if already tenanted and renovated….wow!!Someone should check out this deal!
bridgette….???Are you looking at it muppet??
You rock!
All,
It’s been some time since I posted on this website, but here I go.
Mini,
I’ve just sent them an email asking for more information about this deal. Will let you know what turns up.
Muppet,
I’ve just sent you a private message on the Propertytalk website. Not sure if you’ve received it yet. You may find the information in the email interesting though.
Dingo 21,
You are right about some of the CGT issues in your posting above. I have researched this issue on & off over the last couple of months and can tell you that this is an area where angels would fear to tread! I don’t want to say too much in a public forum, but investing through a NZ company won’t necessarily protect you from CGT in Australia. Income and capital gains made within a NZ company can still be attributed to Australians under the Australian Foreign Investment Fund rules. Also, investments through a NZ company can raise practical difficulties when you bring profits back to Australia. Eg. profits would normally be repatriated via dividends and attract a non-resident withholding tax. Finally, if 25% or more of the shareholders in the company were non-resident in NZ, the company would be required to prepare and file audited account with the Companies Office (ie. more costs to you).
There are structures available from a CGT planning point of view, but I won’t say much more in a public forum. Happy to take discussions off line though. My mobile number is XXXXXXXX (I will remove this number tomorrow).
Regards, Neill [8D]
Neill
Thanks, I think its important everyone is aware of all the risks/rewards of property investing overseas before they take the plunge. Most of this discussion so far had concentrated on finding the right property but no one had yet discussed the appropriate structures.
The right investing structure is just as importatnt as the right property.
You’ve just touched on a pet topic of mine (I will restrain myself though).
Some people overlook the CGT aspect in Australia when buying property in NZ. A $100K capital gain without CGT means that the gain is worth $100K. However, if you make a $100K capital gain on property in Australia, then it’s only worth $75K because you loose approx $25K in CGT. Even if you decide to hold the property indefinitely, you still only have a $75K net gain because you will have to pay the CGT one day.
So, what does this really mean when comparing a NZ investment property to Australian investment property? Well, the short answer is that the long term capital growth rate on a property in Australia needs to be 33% higher than the long term capital growth rate for a well structured NZ property for the two net gains over time to be equal.
The maths are quite simple:
If the NZ long term CG is 9% and CGT free, then the long term CG in Australia must be 12% gross (less 25% CGT) = 9% net in Australia to be break even.There are other factors to take into account when comparing investment opportunities in the two countries (exchange rates, interest rates, yields, vacancy rates, etc). Also, tax rules do change from time to time. However, as I see it, if you do your research and are mainly driven by the fundamentals, you would have to be crazy not to be looking at NZ right now.
Hi, I’m not sure that I am even doing this right, yes I would like to swap emails and discuss Tokoroa or any NZ related IP stuff. Can someone explain the different types of members as I see some of you listed as silver etc.
Many thanks
LL
Hi RodThe 8.5% came from the 2001 census report so the figures are a couple of years out of date.
A Property Manager would have more idea.I think the number of retirees retiring,selling up and moving into a smallish town is increasing.
They are able to capatilise a lot of cash for their retirement that way.Also it is much cheaper, rent wise, for those on benefits to live in the small towns. Who wants to pay $300 per week in Auckland when you can rent for $100 to $150 per week in a smallish town.
Hi Lucy Lou
Welcome to the Forum
Do you want to swap email addresses and compare notes on Tokoroa.Regards
Lucy,
The type of member you are is related to the number of posts you have made. You’ll graduate from newbie to member when you’ve made 8 posts.
Muppet,
This is where I got my stats from:
http://xtabs.stats.govt.nz/eng/statsbyarea/area_urban.aspNeill and Dingo, you’re both quite correct, the correct structure is just as important as finding the right property. All of the issues that you’ve raised can be addressed, but it certainly can be a steep learning curve.
Rod.
Hi Muppet,
I have been looking at the posts on NZ in the treasure chest and following this as well and this seems great. Are you not interested in it for yourself? Would you mind if I went for it? Should I be wary abt anything in it?
Anyone else? Thanks so much too, for all your information, as well as Mini’s and Westan’s and others. There is so much to learn!
Regards,
LindaHi Sweetie
Rotorua like any town or city has good suburbs and streets and not so good suburbs and streets,
Property Managers are a great source of information when you want to find out about areas and which areas that appear to have great deals or easy to rent out in.
In Tokoroa for instance I know of one PM who will not handle rental properties in a certain street or streets.
Therefore with the deal I posted before, you would have to do your due diligence and find out firstly what area it is in. It is rented for $145 when the median for Rotorua 3 b/r houses is about $180 per week. Why is it so low? Are there unsavoury neighbours etc?
If I was interested in it I would shoot over pretty quick to have a look as we only live 120kms from Rotorua.
Also we have just taken possession of two properties in the last month so we are sitting quietly at the moment.
Go ahead by all means. Do your due diligence and first in, first served.Hi Lucy Lou
Go to http://www.propertytalk.co.nz and leave me a personal message. I will contact you via email.
Muppet is the same on both forums.
You become a 4 star gold general when you get 500 postings. Lucky Arty.Hi Rod
Thanks for the address. I will have a look later.
Our second house in our town has a tenant moving in on Saturday. Kathy has certainly done a good job.Regards
Hi Guys
Here is a North Invercargill property, right in the middle of Tim Shadbolt country.
http://www.trademe.co.nz/Real-estate/Houses-for-sale/0350-0079-/auction-6518875.htm
Regards
hello bridgette,
could you tell me how long it took your b/f family
to rent out their house in tokoroa. The town has
a decreasing population and I would like to know
how easy it is to rent out an IP there.Hi Paullam
Welcome to the forum.
One of mine already had a tenant whom stayed on but the rent went up to $155 per week.
It took one week to get a tenant for the second property at $140 per week.Both properties are +ive cashflow. One at 11% and the other at 13%.
People are approaching property managers all the time.
Hoever watching from afar there is a slow turnaround in properties. Some have been on the market for months.
The township always has alot of people about. But there are at least 20 empty shops. But there is a Warehouse, McDonalds and a Burgerking and a Mitre 10 shop.
Since the Kinleith Paper Mill went back to full production after the strike, the company has made millions in profit.
Regards
Hi Mini, A couple of questions I am aKiwi investor living in Oz I have several IP’s in Auckland I use Open2view and Realenz.co, I have not seen properties in this price range
1) Which towns cna these properties be found in and on which sites ?
2) What is the expected rent on these propertiesThanks L[?]
Quote:I bought twice under 20 and one under 30. All since April. The one under 30 is ‘delux’ in a grandmotherish way, with nothing to do
except plumbing, the other two were dumps and so i threw a bunch of money at them and they are super-fabulous now, new bathrooms, polished floors, painted, repaired, the works – and total for reno’s included is still for under 30K each.hello muppet,
thanks for your comments, I was worried about investing in tokoroa after reading ktkiwi’s article a couple of months ago regarding the township. I liked mini’s rebuttal, but wanted someone’s actual experiences there. Muppet I would like to talk with you further if I may. You can contact me at ************ at ******************. If anyone has direct
knowledge of tokoroa please contact me. I’ll
leave the e-mail address for a couple of days.
regards, paullamHi Neill, I have a question I would like to ask about structures and CGT for NZ property. You had a mobile phone number here, but I missed it. Could you email me lrobbie at netspace.net.au so I can ask you some stuff??
Cheers
Lisa R
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