Positively geared properties - do they exist?
- Thread starter Harriet
- Start date
NZ is best?
Hi Harriet - we were interviewed by the magazine you mentioned a few years back on the issue of positively geared properties in NZ.
The truth of the matter is that positive cashflow from property (finding it) is probably the easiest thing to do in property today.
I am not even sure how you would go finding finance for NZ now if you live in OZ (the last broker I spoke to claimed to be an expert and then had a brain aneurysm over an enquiry about a very very basic transaction) so that would be your first hurdle.
Then you have the various problems of management, legal structures and accounting and to be honest I think it takes a certain kind of person to be able to invest long distance. Email wont work, you have to visit and meet people.
I mean it really is different. Heaps harder to do (and probably riskier). However, the cashflow you get from a NZ property will always be higher than the returns you get here.
Hi Harriet - we were interviewed by the magazine you mentioned a few years back on the issue of positively geared properties in NZ.
The truth of the matter is that positive cashflow from property (finding it) is probably the easiest thing to do in property today.
I am not even sure how you would go finding finance for NZ now if you live in OZ (the last broker I spoke to claimed to be an expert and then had a brain aneurysm over an enquiry about a very very basic transaction) so that would be your first hurdle.
Then you have the various problems of management, legal structures and accounting and to be honest I think it takes a certain kind of person to be able to invest long distance. Email wont work, you have to visit and meet people.
I mean it really is different. Heaps harder to do (and probably riskier). However, the cashflow you get from a NZ property will always be higher than the returns you get here.
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Wow $50K for a residential block! The very cheapest rural town blocks in WA are nearly double that! And building a 4x2 for only $110K is amazing. Its $170K+ here.
Although they're in small towns (often with declining populations), there's heaps of blocks in the $10 - 30k range in regional WA.
Above $30k you can get something near a large town (> 3000 pop).
Eg http://www.realestate.com.au/property-residential+land-wa-kukerin-2658731
http://www.realestate.com.au/property-residential+land-wa-dowerin-2606098
http://www.realestate.com.au/property-residential+land-wa-tammin-2774528
http://www.realestate.com.au/property-residential+land-wa-yealering-2732701 (this even has a house on it)
http://www.realestate.com.au/property-residential+land-wa-katanning-2783941
http://www.realestate.com.au/property-residential+land-wa-merredin-2760721
Land tax is the silent killer if it applies to you. If it does, your numbers would be well in the red. At current int rates with land tax, get anything less than 9% gross return and you'll be tipping money in.
with the new multiple dwelling codes in WA we can now get CF+ after depreciation (on ITWV) in high growth suburbs.
it's incredible.
add NRAS and it's just insane.
it's incredible.
add NRAS and it's just insane.
Nope. Still under threshold.Rates have gone up a bit( half fixed) but rents have also with another step up in the next month. Depreciation is actually a bit higher than i suggested so my final figure is probably $20 to $30 better than my first figure.
And if my figures are sound for the house im building on the back of this block. I should see a similar return after depreciation on the new build also.
There is another block nearby that is the same as this. Not quite as good rent return but after development it would return some good cash or atleast reduce the original house to a positive geared one after sale.
I'm not sure if you noticed but Recent Sales in the suburb of the above property make a very interesting reading.
23 Connor St, sold for $28000 in 2001 and resold again for $500 in 2005. And that happens to be the last sale in the area. But, the Sale Details of the property mention that the above property was sold in NOv-2010. So something not right there, but anyway, pretty interesting reading I think.
the only town i would consider in that lot is Merredin, but the workers for the new wind farm in the area are already housed so the market is stagnant now.
why you would buy in the other town, other than if you lived there, is beyond me. anyone with a job that doesn't involve a petrol station or a rousie would have trouble living there.
hence the price.
