All Topics / Overseas Deals / positivly geared in new zealand

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  • Profile photo of jamiedellamjamiedellam
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    @jamiedellam
    Join Date: 2004
    Post Count: 36

    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???

    Profile photo of Karen YoungKaren Young
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    @karen-young
    Join Date: 2007
    Post Count: 1

    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

    Profile photo of woodymanwoodyman
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    @woodyman
    Join Date: 2004
    Post Count: 2

    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%

    Profile photo of Kiwi-FullaKiwi-Fulla
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    @kiwi-fulla
    Join Date: 2002
    Post Count: 371

    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!

    Profile photo of emmajane06emmajane06
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    @emmajane06
    Join Date: 2007
    Post Count: 38

    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

    Profile photo of how2how2
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    @how2
    Join Date: 2007
    Post Count: 5

    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"

    Profile photo of reecoreeco
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    @reeco
    Join Date: 2007
    Post Count: 65

    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

    Profile photo of sapphire101sapphire101
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    @sapphire101
    Join Date: 2006
    Post Count: 203

    Hi Jamie

    Give me a call or email [email protected]
    I have a property in NZ I need to discuss with you regarding a joint venture arrangement.

    Regards
    Ian
    0410 638 657

    Profile photo of red123nzred123nz
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    @red123nz
    Join Date: 2007
    Post Count: 73

    Hey Jamie,

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

    cheers

    Sean

    Profile photo of Don NicolussiDon Nicolussi
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    @don
    Join Date: 2005
    Post Count: 1,086

    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!

    Don Nicolussi | Mortgage Broker - Home Loan Warehouse
    http://homeloanwarehouse.com.au
    Email Me | Phone Me

    "I think of finance as a technology, a way of getting things done." Robert Shiller

    Profile photo of Nigel KibelNigel Kibel
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    @nigel-kibel
    Join Date: 2005
    Post Count: 1,425

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

    Nigel Kibel | Property Know How
    http://propertyknowhow.com.au
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    We have just launched a new website join our membership today

    Profile photo of Don NicolussiDon Nicolussi
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    @don
    Join Date: 2005
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    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.

    Don Nicolussi | Mortgage Broker - Home Loan Warehouse
    http://homeloanwarehouse.com.au
    Email Me | Phone Me

    "I think of finance as a technology, a way of getting things done." Robert Shiller

    Profile photo of Nigel KibelNigel Kibel
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    @nigel-kibel
    Join Date: 2005
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    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 | Property Know How
    http://propertyknowhow.com.au
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    We have just launched a new website join our membership today

    Profile photo of henry13aucklandhenry13auckland
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    Join Date: 2007
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    Nigel Kibel wrote:
    Your right Don borrowing for the USA is not that easy, You will do far better than this in main cities in the United States.

    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.

    Profile photo of Don NicolussiDon Nicolussi
    Participant
    @don
    Join Date: 2005
    Post Count: 1,086

    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!

    Don Nicolussi | Mortgage Broker - Home Loan Warehouse
    http://homeloanwarehouse.com.au
    Email Me | Phone Me

    "I think of finance as a technology, a way of getting things done." Robert Shiller

    Profile photo of Kiwi-FullaKiwi-Fulla
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    @kiwi-fulla
    Join Date: 2002
    Post Count: 371

    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

    Profile photo of thearboristthearborist
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    @thearborist
    Join Date: 2003
    Post Count: 3
    how2 wrote:
    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"

    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

    Profile photo of Don NicolussiDon Nicolussi
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    @don
    Join Date: 2005
    Post Count: 1,086

    Employers set to lure skilled workers to Southland

    4:00AM Sunday Aug 31, 2008
    Andrea Milner

    Tim Shadbolt says Southland's economy is comparable to that of top OECD nations. Photo / Getty Images

    Tim Shadbolt says Southland's economy is comparable to that of top OECD nations. Photo / Getty Images

    Southland employers are set to launch a raiding party to lure Auckland's skilled workers to the region led by the Mayor of Invercargill, Tim Shadbolt.

    Shadbolt will return to his old home town at the head of a platoon of businesses, recruiters, educational institutions and real estate agents to put the case for Southland as part of the New Zealand Herald's Your Career Expo next month.

    Shadbolt says that the raiding party is considering establishing a village rather than a stall at the expo. Members will do everything they can to entice skilled workers south.

    The region needs an injection of 18,000 employees, Shadbolt says – and if oil is struck, that number will increase dramatically.

    "We're desperate. We have a booming dairy industry with 100 farms waiting for conversion, we've got dairy factories opening in Invercargill and Gore, and the Fonterra factory is being doubled in size."

    Scott O'Donnell, managing director of the Richardson Group, a major transport and construction services employer in Southland, is joining the delegation coming north to look for more workers.

    Economic statistics from the National Bank show Southland remains the fastest growing economy in the country, with annual growth of 3.4 per cent in the year to March – compared with Auckland's 1.7 per cent, below the national average.

    Retail spending growth is the second-highest in the South Island, ASB data shows, and unemployment is also the country's lowest, averaging 2.1 per cent during the past year.

    Car registrations have risen during the past year – the only region to register such an increase.

    "If Southland was a country it would be near the top of the OECD for economic growth," Shadbolt says. "Why wouldn't you want to live here?"

    Southland's healthy economic growth is partially driven by the comparatively lesser amount of speculative housing investment, Shadbolt says.

    "While every other region in New Zealand is suffering from a decrease in housing values, ours went up 8 per cent over the past year, which has helped stabilise our economy."

    House price growth there is cooling rapidly after last year's burst above 20 per cent year-on-year, but is still well ahead of anywhere else in the country.

    Sean Bellew, a real estate agent at Southernwide Real Estate, says property investor interest in the region remains strong despite the nation's market downturn, and that there is a lot of cash surplus available in the strong rural sector.

    Bellew doesn't expect the Southland property market to further regress and forecasts Southland leading a market upturn in the next three to four months.

    "People in Auckland have a negative view of Invercargill," says O'Donnell, "but the cost of housing is low – an executive house is $300,000."

    "The biggest commute we have is seven minutes and we have huge sports facilities – indoor stadiums, indoor velodromes and the best motor-racing track in the country.

    "It is also the entrance point to the Fiordland National Park, Queenstown and Wanaka."

    Shadbolt says the expo gives Aucklanders a chance to look at other opportunities while the country's biggest city grapples with problems, such as inadequate infrastructure.

    Having experienced life in both centres, he is confident of luring hundreds of stressed Aucklanders to a more relaxed and family-friendly life in the south.

    Penny Simmonds, of the Southern Institute of Technology, says a cheaper lifestyle and ease of employment is part of a package the community offers. "People need to look at what their money buys in Southland, the disposable income it can give them."

    The institute is still running its zero fees scheme and Simmonds says that is an important plank in attracting people to study, and hopefully retaining them in employment locally. Its representatives will be at the expo looking to attract staff and students.

    "Nearly all our students are working at least part time while they're here and we are working closely with employers to try to assist with filling critical job shortages," says Simmonds.

    Whether oil is struck in the region or not, Shadbolt says easily accessible areas of lignite coal will continue to power economic growth.

    "If we can find a way to convert coal into diesel in a way that doesn't hurt the environment, we'll be able to supply all of New Zealand's electricity needs for the next 200 years."

    Don Nicolussi | Mortgage Broker - Home Loan Warehouse
    http://homeloanwarehouse.com.au
    Email Me | Phone Me

    "I think of finance as a technology, a way of getting things done." Robert Shiller

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