A strong aussie$ & buying in NZ
- Thread starter tony63
- Start date
there's also no employment. how will they pay the rent?
)I just spoke to my colleague last week who invested in properties in NZ (she did not mention the city so i am not sure where they are and whether they are houses or apartments). However she had to get rid of them at a huge loss as vacancy rate was high plus it is so far away so it was hard to manage the PM.
She also had one property locally which is doing well, no hassle and fully tenanted and told me that she would purchase locally from now on.
She also had one property locally which is doing well, no hassle and fully tenanted and told me that she would purchase locally from now on.
reminds me of when i was thinking of buying a 5m tinnie (boat) from NZ due to the doller being so strong and all , the other half looked over my shoulder "as they do" and said your f******* mad i said why ? you will drown bringing it back , i laughed and told her i was actually thinking of puting it in a container ??? she said OH!
Hmmm, I wouldn't be so sure of that.
On the property side of things, I would say investing in capital cities close to Universities and Technical colleges would return great value. NZ is a stepping stone for many people from all walks of life and countries. Their target is Australia, and as permanent residence here.
Migrants find it easier to gain a degree/diploma or other qualification and take out citizenship in NZ. Once this is gained, they have easy entry into Australia and permanent residency status, plus a qualification recognised here without any further education, because of the Trans Tasman agreement. Students in NZ make up a big proportion of tenancy of rented property. Not the best tenants in a lot of cases, but mostly reliable as the property agents have right to make application of rents payable from students Government assisted allowances. It's not a bad scheme, and if they should default, the agency makes application for black-listing the tenant and it appears on their record when re-applying somewhere else.
So I would say, property bought wisely in close proxmity of a learning institution would make a good return. Students are not fussy on what the place looks like, so long as it's a house with rooms and cooking/bathing facilities, they do not care.
They pay the rent using their dole money (govt guaranteed income).
WHen i went there to buy a place like many others at the time, i was told it's good to have unemployed tenants because they have a secure income. It's not like they'll lose their job the following week and can't pay the rent. I looked around and bought a house in Jan 2004 for NZ$50,300 then spent NZ$11,000 to reno. I was getting $170pw from a guy who'd been on the dole for years and came highly recommended by the property manager. Sold it in March 2007 for NZ$106,000. The x-rate when i bought was .89, x-rate when i sold was .88. Today it's about .75 .
Hi, cap gains in NZ is the same as anywhere else. A house in Auckland pre 03 would be I guess under $200K then there was an explosive growth in the early noughties. The cap gain just after the GST would have doubled the median price.
I'm just guesstimating. I bought in 03/04
From 05 onwards, it's flat to downward crazy.
It's not a bad idea to buy in NZ. Vacancy rates are no worse than other places during a downturn. Prices haven't really gone down that much.
The student units I bought are still chugging along at the same rate as when I started.
The interesting part is with P&I, every month earning extra $8, the cashflow after 8.5 years is fantastic, think of it, 102 x $8 = $816 extra every month
And that's all after tax, nett. I still have 5 years of zero tax.
The yield is around 8.5% nett ROI between 18-20%
So far, one unit had around 1 month of no rent otherwise it's fully tenanted.
KY
I'm just guesstimating. I bought in 03/04
From 05 onwards, it's flat to downward crazy.
It's not a bad idea to buy in NZ. Vacancy rates are no worse than other places during a downturn. Prices haven't really gone down that much.
The student units I bought are still chugging along at the same rate as when I started.
The interesting part is with P&I, every month earning extra $8, the cashflow after 8.5 years is fantastic, think of it, 102 x $8 = $816 extra every month
And that's all after tax, nett. I still have 5 years of zero tax.
The yield is around 8.5% nett ROI between 18-20%
So far, one unit had around 1 month of no rent otherwise it's fully tenanted.
KY
HI
When purchasing in NZ you don't pay CG in NZ or in Australia and you don't pay stamp duty on the property purchase.
I have used Mark Honeybone from MH Ventures who sources some great deals, some great cash flow + stuff,
and here is another link
http://www.property-investors.co.nz/
I am onto my second deal, am flipping. I think the strong Australian $ makes it very attractive proposition at the moment.
Cheers, MTR
that's to do with the FTA, isn't it? something about the loophole whereby NZ'ers who become Australian Citizens sell their NZ property *technically* should pay CGT as they are an Australian resident for taxation purposes.
so the FTA does away with this but also opens up the gate for "natural" Australian residents for taxation purposes being able to buy and sell NZ property without CGT as well, as the law only sees the "resident for taxation purposes", not "the bit before that".
