- KaviParticipant@kaviJoin Date: 2014Post Count: 18
Much appreciate if someone could please advice me on the below situation,
I bought a 3 bedroom brand new house in Wellington NZ last year(2013) for $391000 with a 95% of a bank loan (5.95 % +0.5 % interest rate.). Currently I am paying $2350 monthly repayment for the loan (Capital+interest)
At the moment I am planning to move to Melbourne and leave this house as an investment property. According to local property managers weekly rent would be around $450 per week for this property(agent commission around 10% including
Monthly Income = $1800
Less expenses – 2350 (mortgage) – 150 (Insurance) – 180 (commission) – 170 (rates) +50 (maintenance)
Loose = NZ $1100 per month
I can diffidently absorb this loose with my personal income and I believe I will get a good capital gain on the property in long term.
I will be able to top up the loan to bring it down to around 80% in future if needed. (this will then reduce the expenses)
Do any one think this will be a good plan. My main concern is about running this on negative in the beginning …
NB- I dint take tax implications at this stage but there will be some tax benefits as well.
Kavi.LinParticipant@linwoodJoin Date: 2014Post Count: 1
You are loosing 3.3% per annum just to keep the property. Unless you have particular reason to think that where you bought it will go up substantially in the future, it does not sounds like a good investment. You could try to top the loan so that at least you go in a cash neutral position. Is a strategy that could have worked well in Auckland or Christchurch where prices are going up 10% pa, but not in Wellington.Kyron GosseParticipant@roadhog260Join Date: 2011Post Count: 7