Hi
i own a 3 bedroom house in Auckland NZ, that is currently negatively geared, i want to try and get it in the positive by doing a wrap with our current tenants, does any one have any advise on working the numbers, so I’m not riping the tenant off? also what do i do in regards to contracts and the like? is it worth it? Can any one offer an incite to this.
Sean
Hi Sean
If you asked my opinion, I'd warn you off wrapping your property to an existing tenant. My experience is that they hardly ever move from a tenant's mentality, to a buyer's mentality.
However, if that's your decision,PM me and I can put you in touch with a reputable Vendor Financier in NZ who will be able to help you out.
Cheers, Paul
Paul Dobson | Vendor Finance Institute
http://www.vendorfinanceinstitute.com.au
Email Me | Phone MeAn alternative way to finance your home.
The best thing about doing it in NZ is that you don’t have stamp duty. Stamp duty is a huge cost in Australia that has to be added to the purchase price of the person buying the property off you. The deal should be much more attractive in NZ. The other benefit for you is that you wont have to pay a real estate agent to sell your property.
I would suggest you figure out the current market value, add a figure of around 20-40k on. Typically a wrap will have an interest rate around 1.5% above the standard variable rate. If you are able to get a deal of 0.7% below standard variable rate from your bank, that will give you significant positive cashflow, which is guaranteed as you are then indexed to interest rates increasing.
The wrappee will also have to pay all outgoings, so there are further benefits from them paying the rates, water etc.
Make sure you get a reasonable deposit from them.
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