Hi. I'm a newbie and have been reading quite a few of the topics, including one some time ago about negative gearing (seemed to be against it generally). I'm looking for views on negative gearing and whether it is worthwhile initially in an investment if that is the way you can potentially afford a more property in an area that interests you.
I own one IP. I bought it about a year and a half ago via the internet as I was overseas (family looked it over for me prior to my bidding at acution and subsequent offer). A mortgage broker helped out, I was able to make an unconditional offer for an amount less than they wanted (but I thought it was top dollar at the time) and got the offer accepted after a bit of a delay. I organised a local company to manage it and they seem to have done a great job - even rented it out at the maximum they thought it could get. One worry I have is that because everything has run so smoothly, I may have an overly optimistic view of what can go right... This property was initally negatively geared (no tax benefit against my income since I was earning overseas) but I repayed two variable portions of the mortgage in the first year and it became positively geared (just) after the first full year.
In any case, in just over two months I arrive back in NZ (permanently) and am keen to buy again. I'm less sure about the market at the moment though... However, I will have a good salary and about 50% equity in my existing property, plus a deposit towards a new one so I think I am in a reasonable position. My current property is a 1/4 acre in Tauranga and I'd like to buy in Tauranga again; the figures I play with all come up negative - but with potential to be positive in one to three years if I make additional repayments for the spare cash I have from my salary. My current primary reason for investing is to create myself a potential future income - you might call it my own 30 year pension plan.
What are your views on whether it is a good/reasonable business idea to initially go in negatively geared, make additional repayments (anytime if variable portion or when refixing if not) in order to get a property in an area like to get good capital gain over the next decade or two. I'm worried that if I save for another couple of years, the house price will have gone up and effectively wiped out the additional money I will have saved in that time. I'm definitely open to learning and acknowledge I'm a real beginner. Thanks for any thoughts you share. Erma
I own one IP. I bought it about a year and a half ago via the internet as I was overseas (family looked it over for me prior to my bidding at acution and subsequent offer). A mortgage broker helped out, I was able to make an unconditional offer for an amount less than they wanted (but I thought it was top dollar at the time) and got the offer accepted after a bit of a delay. I organised a local company to manage it and they seem to have done a great job - even rented it out at the maximum they thought it could get. One worry I have is that because everything has run so smoothly, I may have an overly optimistic view of what can go right... This property was initally negatively geared (no tax benefit against my income since I was earning overseas) but I repayed two variable portions of the mortgage in the first year and it became positively geared (just) after the first full year.
In any case, in just over two months I arrive back in NZ (permanently) and am keen to buy again. I'm less sure about the market at the moment though... However, I will have a good salary and about 50% equity in my existing property, plus a deposit towards a new one so I think I am in a reasonable position. My current property is a 1/4 acre in Tauranga and I'd like to buy in Tauranga again; the figures I play with all come up negative - but with potential to be positive in one to three years if I make additional repayments for the spare cash I have from my salary. My current primary reason for investing is to create myself a potential future income - you might call it my own 30 year pension plan.
What are your views on whether it is a good/reasonable business idea to initially go in negatively geared, make additional repayments (anytime if variable portion or when refixing if not) in order to get a property in an area like to get good capital gain over the next decade or two. I'm worried that if I save for another couple of years, the house price will have gone up and effectively wiped out the additional money I will have saved in that time. I'm definitely open to learning and acknowledge I'm a real beginner. Thanks for any thoughts you share. Erma
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