Help out a Mid 20's couple

[Meehole]

No these days they have a holiday account with Air NZ so the guests put money into the account and its eventually used for the honeymoon, (part of it depending on the guests).

[Davo36]

HH, a couple of things that may help.

1) PM me for the details of a different property manager if you want to consider that. 8.5% is certainly up there.
2) You have a finite amount of time to object to the council valuation. It's a few months. But also bear in mind that if you do want to sell, the higher GV may help.

[BigDreamer]

Hi House Hunter, given that your wedding plans are already in motion and you have mentioned you prefer to keep the house so I will try to help...

Have you considered moving to the house with your wife and renting the other rooms? You will save on the $210 per week and hopefully the rent from the room boarding will help with cashflow.

[td91]

Hmm without sounding negative here, have you thought about maybe putting the wedding off a few years? yes marriage is great, and for many cultures quite important. But look at the bigger picture here, you've purchased a property in your 20's. Many would dream of that but never achieve it until they're slightly older. You want children too, I mean realistically look around, many are married with kids these days but they also rent. You own your own home you are at an advantage compared to others, if I were you I would put marriage off for a while, marriage could happy 5-10 years down the track. Put all your financial focus currently onto to getting some money off that mortgage, owning an investment is a huge risk, all it takes is for your current tenant to move out and a new one to move in and you might find that the new tenant isn't too good (and trust me even the best of property managers end up with bad tenants from time to time) or your current tenant could have a change in circumstances that makes their rent payment irregular or gets them behind in rent. Can you afford to go without rent for anything from 4-8 weeks (a termination of a tenancy based on rent arrears can take this long) and possibly not seeing all of back for a while (tenants end up in minimal amount payment plans or end up running away from their debt)

Once again really not wanting to sound negative or harsh here but it's something to think about. Don't stretch yourself out to your absolute financial limit, get some big sums of money into that mortgage when you can. If I were you I'd put marriage off for a while, yeah marriage is great and so is a honeymoon to celebrate but owning a home in today's world is a heck of a lot more great. Think about ways you can cut costs too, $988 for lawns a year isn't much but it's an extra expense, why not just take lawns being included in the rent out of the tenancy and get the tenants to do it themselves?

BigDreamer's idea of moving into the house with your wife to be is a great idea too. Think of it this way, currently you're getting $465p/w for the property. I'm going to go on the basis that it's a 3 bedroom so you and your wife have one room, then you rent the other two rooms out for say $150 a week that's $300 a week, could be more too depending on where in Auckland you are. The smartest idea I see here is putting marriage off a little longer even if it's another year you put it off, you're going to be that much better off - and moving into the property you've just purchased. I don't think selling it is that great of an idea, you've saved your deposit and purchased may as well see it through.

Good luck

[House Hunter]

get some mates to do the BBQ, 12k buys a lot of sausages, lets face it most people hate going to weddings, you have to put on your good gear, buy some meaningless present thats hopefully not to expensive, waste a day rubbing shoulders with people you wouldn't ordinarily associate with, listen to some dick on the top table tell stories that you couldn't care less about all the time hoping you can get away in time to catch the rugby.

I feel sorry for you my friend. What a miserable life you seem to live.

[House Hunter]

No these days they have a holiday account with Air NZ so the guests put money into the account and its eventually used for the honeymoon, (part of it depending on the guests).

Yes that is what we intend to do. We don't want a microwave, etc.

[House Hunter]

Hi House Hunter, given that your wedding plans are already in motion and you have mentioned you prefer to keep the house so I will try to help...

Have you considered moving to the house with your wife and renting the other rooms? You will save on the $210 per week and hopefully the rent from the room boarding will help with cashflow.

Yes we did consider this. It is a two bedroom house rented at $465 per week. So taking into account property management we take $420 net cash per week.

If we moved in and saved the $210 per week that would mean we would have to rent out the 2nd bedroom for $210 per week also. Since the 2nd bedroom is a bit smaller than the main room, it could only really be rented to a single. The going rate for a room in the suburb, house quality and room size would be somewhere around $160-180 per week. So by renting the house out and living elsewhere we are $30-50 better off each week.

By renting it out we can also offset the expenses such as mortgage interest against our incomes. Weighing up costs of all these things and other expenses such as accountant fees, etc it works out better off on a cash basis to rent it out and live elsewhere.

[House Hunter]

Hmm without sounding negative here, have you thought about maybe putting the wedding off a few years? yes marriage is great, and for many cultures quite important. But look at the bigger picture here, you've purchased a property in your 20's. Many would dream of that but never achieve it until they're slightly older. You want children too, I mean realistically look around, many are married with kids these days but they also rent. You own your own home you are at an advantage compared to others, if I were you I would put marriage off for a while, marriage could happy 5-10 years down the track. Put all your financial focus currently onto to getting some money off that mortgage, owning an investment is a huge risk, all it takes is for your current tenant to move out and a new one to move in and you might find that the new tenant isn't too good (and trust me even the best of property managers end up with bad tenants from time to time) or your current tenant could have a change in circumstances that makes their rent payment irregular or gets them behind in rent. Can you afford to go without rent for anything from 4-8 weeks (a termination of a tenancy based on rent arrears can take this long) and possibly not seeing all of back for a while (tenants end up in minimal amount payment plans or end up running away from their debt)

Once again really not wanting to sound negative or harsh here but it's something to think about. Don't stretch yourself out to your absolute financial limit, get some big sums of money into that mortgage when you can. If I were you I'd put marriage off for a while, yeah marriage is great and so is a honeymoon to celebrate but owning a home in today's world is a heck of a lot more great. Think about ways you can cut costs too, $988 for lawns a year isn't much but it's an extra expense, why not just take lawns being included in the rent out of the tenancy and get the tenants to do it themselves?

BigDreamer's idea of moving into the house with your wife to be is a great idea too. Think of it this way, currently you're getting $465p/w for the property. I'm going to go on the basis that it's a 3 bedroom so you and your wife have one room, then you rent the other two rooms out for say $150 a week that's $300 a week, could be more too depending on where in Auckland you are. The smartest idea I see here is putting marriage off a little longer even if it's another year you put it off, you're going to be that much better off - and moving into the property you've just purchased. I don't think selling it is that great of an idea, you've saved your deposit and purchased may as well see it through.

Good luck

Reason we are having the wedding in 1.5 years time is that between the two of us, we have one remaining grandparent and it's unlikely she would live for another 3-4 years as she has been in and out of hospital over recent years. She is also the centre of my extended family and we would really like her to be there for the occasion. I would be the first grandchild in our extended family to get married and my grandmother is looking forward to this day more than anything.

[BigDreamer]

Yes we did consider this. It is a two bedroom house rented at $465 per week. So taking into account property management we take $420 net cash per week.

If we moved in and saved the $210 per week that would mean we would have to rent out the 2nd bedroom for $210 per week also. Since the 2nd bedroom is a bit smaller than the main room, it could only really be rented to a single. The going rate for a room in the suburb, house quality and room size would be somewhere around $160-180 per week. So by renting the house out and living elsewhere we are $30-50 better off each week.

By renting it out we can also offset the expenses such as mortgage interest against our incomes. Weighing up costs of all these things and other expenses such as accountant fees, etc it works out better off on a cash basis to rent it out and live elsewhere.

Looks like you have done your numbers then so that is good. By the way, $465 p/w for 2 bedroom is a very good rent - must be a Central Auckland house.

A number of weddings I have attended (including family member's weddings) asked for cash rather than gifts to help the newly wed buy (or in your case) pay off their first home loan. That could help I suppose.

[crashy]

I feel sorry for you my friend. What a miserable life you seem to live.

that's rich coming from a guy who won't spend money on anything. You have no idea how much you are missing out. You are in your twenties for christs sake. This is where you are supposed to enjoy life before all your freedom is gone via marriage and kids. That means going out for dinner, traveling the world, going out with friends, enjoying boats/cars etc, spending money on yourself. Think you will get the opportunity to do any of these after marriage or kids? You are either delusional or have no real understanding of what wealth is, nor what it means to enjoy life. You think being a tightwad now will provide these things automatically later in life. It will not. You will be a classic mid life crisis. Typical of your generation you want it all and you want it now. The rest of us earned it slowly. You have the arrogance to ask for help then pass judgment on those you asked, completely dismissing any suggestions as though you are seeking confirmation that you are smarter than everyone else.

[elguapo]

House that yields 4.1%, bought with money borrowed at 6.4%.

Why are you doing this?

[speights boy]

Jaysus

Lesson here for future posters.
Post your investment / financial details; but leave out personal stuff.
Otherwise it'll degenerate and end up with tirades as we see above from crashy

[crashy]

get some mates to do the BBQ, 12k buys a lot of sausages, lets face it most people hate going to weddings, you have to put on your good gear, buy some meaningless present thats hopefully not to expensive, waste a day rubbing shoulders with people you wouldn't ordinarily associate with, listen to some dick on the top table tell stories that you couldn't care less about all the time hoping you can get away in time to catch the rugby.

spot on. My parents got married when I was 9. 90% of those who attended were never heard from again. It was windy as hell during the ceremony which ruined the video with white noise, and ruined many photos. People were cold and miserable. Parents were disappointed with the gifts. Dad's mates hogged the free bar, got smashed and started arguments. Drunk relatives had big mouths.

My wife's sister got married 6 yrs ago. Spent $15k. Didn't have the money so borrowed it. It was ok I guess, if you ignore the fact that the photographer and camera man spent most of the time focusing on the hot girls instead of the bride. Brides father refused to wear his hearing aid and made an idiot of himself. Grooms friends acted like idiots. Brides relatives were drunk and an embarrassment. Grooms parents are loaded yet bought the cheapest gift. To this day she has not paid it off.

But hey, every now and then the wedding is as perfect as the bride dreamed since 7 yrs old

[BigDreamer]

Lesson here for future posters.
Post your investment / financial details; but leave out personal stuff.

Agreed - I have been trying to refrain myself from adding my opinion on money spent on marriage. However, I suppose because the post was around finance the money spent on wedding/honeymoon was disclosed as there was a budget allocated of $12k from memory which added to the overall expenses.

[Meehole]

House Hunter you just keep on with your plan and take no notice of some of the remarks.
You have launched yourself onto the property ladder and if it all gets too hard down the track at least you have a tangible asset to sell. You can have it all, within your means. My father in law used to say its not about how much you earn but about how much you spend.
There will be a time when living with flatmates won't appeal and you will have to make the call to either move into another rental on your own or into your own place.
I would endeavour to reduce the mortgage as much as I could by whatever means you can and another alternative to a flatmate should you move in is an overseas student. They pay about $250 week and if you get a mature one it can be a great experience. Two friends of mine have had them, one as a solo mother and it helped pay off her mortgage and the other had a lot European girls and subsequently their children have travelled a great deal staying with the families during their OE's. You can also have them for a finite length of time if you wish.
Judging by Crashys experience it might pay to limit the amount of alcohol available and marry in summer.