best bank for leveraging

[Nan]

Hi, Which banks have users used that allowed them to use the most leverage on their existing equity. Interest rates while important are not the only part of the equation. i would rather pay a higher interest rate to get the maximum leverage possable to allow the next property purchase.

love to hear of which banks have been the most forthcoming to individual users when they have 5 plus properties.

[speights boy]

Do you have a good non-rental income to help support the high LVR ?

[Nan]

Good non rental income, plus same job over 10 years.

[Craig Pope Mortgages]

Hi Nan, I don't think having 5 rentals with one bank will be the best strategy, you are probably looking at 80% LVR at best across 5 properties from one bank, but that would need to be supported by a really good cashflow (salary and rental income). Yes you may pay a higher interest rate and low equity fees if looking for a high LVR, but the banks will also be stricter on their servicing calculation.
If you are serious about building a bigger portfolio and leveraging then you need to get up to date valuations across your properties (if you havent already) and look to take maybe 2 properties to one bank at 90% LVR, then maybe split the other 3 between one or two banks.

[Eugene]

I have found ANZ the best

[Maths Debater]

If you are serious about building a bigger portfolio and leveraging then you need to get up to date valuations across your properties (if you havent already) and look to take maybe 2 properties to one bank at 90% LVR, then maybe split the other 3 between one or two banks.

What kind of strategy would you recommend for getting to say 20 houses? Obviously you'd start running out of banks at some stage if you want to keep less than 5 with each bank.

And my next question, if you wanted to get to 50 houses, where having more than 5 houses per bank is a given, then what kind of equity levels are going to be demanded?

[Eugene]

The banks look at what you have with other banks.

[Gladdynook]

And my next question, if you wanted to get to 50 houses, where having more than 5 houses per bank is a given, then what kind of equity levels are going to be demanded?

I'm intrigued as to why you plan to purchase 50 properties? Nothing wrong with aiming high, but have you based this number on a particular income? Or are you hoping to make your fortune in a very short period of time? Also I never experienced a 5 house limit at asb or Westpac. Comes down to serviceability and equity being greater than 20%.

[Eugene]

I'm intrigued as to why you plan to purchase 50 properties? Nothing wrong with aiming high, but have you based this number on a particular income? Or are you hoping to make your fortune in a very short period of time? Also I never experienced a 5 house limit at asb or Westpac. Comes down to serviceability and equity being greater than 20%.

It is risky to grow quickly; timing risks, rent income initially low, etc. It is the task of the banks to assess risk, and if they think your strategy is risky they could likely be right.

[flyernzl]

Right now ANZ seem to be keen, Kiwibank nitpicky and AMP good for existing mortgages because they seem to be sound asleep.

[absoluteproperty]

As a side note, does anyone know any good books relivant to NZ which will teach me how the banks work with their lending?

I have my first home, which has increased by 5% since I bought it, I bought it a few % below valuation. I now have more savings too, and am paying my current mortgage off over 15 years - only 7 months into this mortgage.

My employment has been stable in the same position with the same employer (2 promotions) over the past 2.5 years, 3 years with my previous employer (both government SOE jobs).

I have looked at property mentoring services but am a little hesitant in taking someone elses word in steering my own destiny - their error or misinformation would leave me in the firing line for losses, not the mentor.

Can someone point me on the right path to good information? I see Olly Newland has a good book out, so this will be a start for me.

[Gladdynook]

One that i found useful back int he day was "Building Wealth Through Property" - Jan Somers and Dolf De Roos. Most libraries stock it, or its about $30 in the bookstores.

martin Hawes also does a couple of NZ specific ones too.

[speights boy]

i would rather pay a higher interest rate to get the maximum leverage possible to allow the next property purchase.

There is a fair chance you will get your wish of higher rates.

Bankers knock new capital plans

Reserve Bank proposal would mean big increase in amount banks need to carry against their housing loans.
The Bankers Association is critical of Reserve Bank proposals to increase the amount of capital banks have to hold against home loans with a high loan-to-value ratio (LVR).

www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10873825

[Equilibrium]

Hi, Which banks have users used that allowed them to use the most leverage on their existing equity. Interest rates while important are not the only part of the equation. i would rather pay a higher interest rate to get the maximum leverage possable to allow the next property purchase.

love to hear of which banks have been the most forthcoming to individual users when they have 5 plus properties.

IMO BNZ has the most flexible policy for property investors and yes you will probably also pay higher rates for the privledge. Rohit Rup is the main BDM in their Property Investors division. I'm sure you could reach him via their call centre.

[Craig Pope Mortgages]

What kind of strategy would you recommend for getting to say 20 houses? Obviously you'd start running out of banks at some stage if you want to keep less than 5 with each bank.

And my next question, if you wanted to get to 50 houses, where having more than 5 houses per bank is a given, then what kind of equity levels are going to be demanded?

I take your point. When you start getting into the 20-50 house it becomes a different 'game' altogether and works on a case by case basis. At this point you would probably have a commercial type manager with the bank and be assessed in different ways (ie more as a commercial business than residential property investor). I would imagine LVR levels would be around that max 60-70% across the board. My original comments related to the smaller investor which probably makes up the bulk of people out there with maybe 1-10 investment properties.