NZ Invest

[AustinWong]

[quote="ivi"]
"Guaranteed rent for 10 years..."
quote]

Yes... could be right until they go belly up.

L

[Josko]

"Guaranteed rent for 10 years..."

Yes... could be right until they go belly up.

Maybe, i think its a 'government is renting it thing', hence by association may be very close to advertising standard breaches.

[katie]

1. It's Brick Securities that advertise $1,000 down, not NZINVEST
2. You are able at any time to use your own advisers (lawyers accountants etc) when you work with their coaches.
3. The rent is guaranteed for 10 years because it is paid by the government (no dodgy developer rent guarantees). There are also vacant posession properties available.
4. There is no involvement with any property project in Hamilton.
5. Go to the website www.nzinvest.co.nz and have a look for more info.

[Josko]

1. It's Brick Securities that advertise $1,000 down, not NZINVEST

Hi katie, welcome, please let me rephrase my post like this.

It is a worrying sign in the cycle (not that it matters) when the radio is announcing things like:

1) Company1 - "Yes 1,000.00 down, and you could invest in a income producing...."
2) Company2 - "Guaranteed rent for 10 years..."
3) Company3 - "Rent with us and all you rent becomes the deposit in three years time..."
4) Company4 - "$50.00 a week and the equity in your home can own you an apartment in..."

…and ofcourse the multitude of every person under the sun property seminars that are advertised (to which I have been to and are going to), its sheep dog behaviour and IMHO, its concerning. Thats all.

[fudosan]

When it is so easy that even anybody on the street is investing, then it is time the professionals should go for a holiday.

[Guest]

The $1000 down is Bricks using Deposit Bonds. They subsidise the fee charged so all the client has to pay is $1000 to commit to a purchase.On settlement you pay the full price. Naturally you would think that this encourages speculation and hence a false market however I understand that to qualify for a Bond the purchaser has to demonstrate their ability to settle. It does involve a credit application so I guess thaqts how they weed them out.

[cat]

1. It's Brick Securities that advertise $1,000 down, not NZINVEST
2. You are able at any time to use your own advisers (lawyers accountants etc) when you work with their coaches.
3. The rent is guaranteed for 10 years because it is paid by the government (no dodgy developer rent guarantees). There are also vacant posession properties available.
4. There is no involvement with any property project in Hamilton.
5. Go to the website www.nzinvest.co.nz and have a look for more info.

Welcome to the forum Katie, it's great to have NZ Invest here. Could you please explain the demarcation of the coaches and the NZ Invest property sales team. Sounds quite tricky to do both.

Cat

[Greengrass]

OK. Thanks for all of that, here are some further thoughts.
Firstly, in response to Cat especially, this is the plan they have put in front of me.
1. Property is either new or nearly new (for max deprec benefit) and will be sold to me at valuation by an independent registered valuer. From a panel of the same valuers as the lenders use.
2. All freehold title, on own sections. No appts (which I wouldn't touch anyway)
3. Most advisors are independent, eg they contract out accountancy, legals, valuations. They are happy for me to use my own, although they emphasise that the costs will be greater than using ones with whom they have a relationship.
4. What can go wrong? If I am not paying above the market, have a good quality property in a potential high growth area, have freehold title and they take back a management contract for three years, find the tenant, guarantee the rent, pay all routine repairs and maintenance, and have a good insurance package through the NZI to protect gainst mal damage by tenants and loss of rents etc.
The way I see it even if Merlot go broke I still end up with the property and a tenant. I lose the rental guarantee, free r&m, and manager. I can replace the manager in minutes so I am no worse off than if I did it all myself from day one, apart from their fee.

[Guest]

Choose your own valuer and use your own accountant. With the amount of money being committed , get the people you know and trust to look after your interests not someone who is trying to sell you something. The Gold Coast property market is full of tales of scams and the one thing they all have in common is arranging valuations, rentals, mtges etc.
If they are genuine about their product they shouldnt care if you do.
If you are unsure about which valuer I suggest you ask your Banker to get one of his collegues in the area to recommend someone.

[Gerrard]

4. What can go wrong? If I am not paying above the market, have a good quality property in a potential high growth area, have freehold title and they take back a management contract for three years, find the tenant, guarantee the rent, pay all routine repairs and maintenance, and have a good insurance package through the NZI to protect gainst mal damage by tenants and loss of rents etc.

What can go wrong:

1) Are you really paying market valuation? Find out who their valuers are then use someone else.

2) If you are paying market valuation then you either need to pay down the mortgage or get capital growth before you can reuse your equity for another purchase.

3) Property groth platteaus (or goes backward) for a few years. You get no benefit or return from your investment.

4) I'm guessing you will be -ve geared or at least -ve cashflow. So you will probably be losing/paying money until there is any capital growth.

5) if #3 above happens, and you have to sell the property for any reason you'll be in the following situation:

- having paid your own money into the property
- you sell it for a similar price (or worse) you paid for it
- you pay 4% comission + legal fees to sell
- you have to pay back a fair bit of the tax break you got from depreciation
- you become bitter about property investment being a "sham" so buckle down to working hard in your job to "secure your future" and become trapped like 99% of other New Zealanders.

Ok, that may be taking it to the extreme, but others can testify it does happen. Just make sure you have considered all the angles and this is the right investment for you.

Good luck
Gerrard

[fudosan]

Hi Gerrard,

- you become bitter about property investment being a "sham" so buckle down to working hard in your job to "secure your future" and become trapped like 99% of other New Zealanders.

I agree with most of what you said. That's why while so many people get into property investment, we don't see many successful investors.

[MiniMogul]

"Also Merlot keep emphasising the tax advantages of property ownership, always a worrying sign."

Yes, that just means 'lose a dollar today, and claim 39 cents in the future!' or whatever your tax rate is.

AKA Negative gearing.
Glossy prospectus stuff.
Trying to use creative accounting to make a lame-ass return look okay.

"Especially when they say that interest rates may go up, but look on the bright side you will save more taxes!"

Indeed.
FEAR!!! (interest rates might go up!)
GREED!!! (buy now otherwise you'll miss out! and someone else will make all the money!)

feel those glands secreting?

Cairns Lockie reckons interest rates will go down this year, and they're as high as they're gonna be.

"you become bitter about property investment being a "sham" so buckle down to working hard in your job to "secure your future" and become trapped like 99% of other New Zealanders."

Trapped is consumer debt and spending more than you earn.
If you spend less than you earn, and invest the rest in income-producing assets that themselves appreciate in value, you will be SOOOOOO zooming out of the rat race. If that last sentence was a revelation to you, then back to reading Rich dad Poor Dad you go.

Note...by the above definition, buying your own home does NOT count as buying an income-producing asset. Necessarily. HOWEVER!! Renting 3 out of 4 rooms to flatmates does...and all the people I know who did THAT first off, man, did they zoom out of the rat-race. retiring in their 30's to gentleman farming in Leigh, that kind of thing.

"I agree with most of what you said. That's why while so many people get into property investment, we don't see many successful investors."

You don't see many successful investors because of negative-gearing only working as an investment strategy in a rising market, i.e. 3 years out of 8.

[geoffk]

companies such as this will go to developer/builder and purchase a large chunk of houses/apartments/ at a discount and for average type stuff there maybe 20-60k+ in it for them per unit (as long as valuation stacks when complete)

[grotto]

Paying Valuation

I'm never prepared to pay the valuation for an property (maybe it's my Scottish blood), even when the valuer has been employed by me.

I've noticed valuers always ask if you are selling or buying when the value a property, and like anything, there is a range which would be considered correct.

I've never had one ask if I want a "high" or "low" valuation, but I've always told them, and would guess that they've taken this into account.

The easiest money I've made, is through buying a bargain, and I wouldn't expect that Merlot/NZInvest/etc (not knocking them at all).

Buying from Merlot/whoever will save you a lot of work and hassle, and you need to remember that they are in it to make money for themselves (as well as you hopefully).

[Robot]

The main difficulty I see with Merlot is the fact that you are paying market valuation for the property. So maybe http://www.richmastery.com/nz/proper...erty_home.aspx is a better choice because they claim you are paying less then the market valuation. Has anyone used them?