Thinking of buying again..

[Beginner1]

Here is our issue: We have a small property profolio of 6 houses in NZ. They are valued around NZ$2.3million with $1.0million mortgage. We had $120000 in rent last year and after expenses we had $30,000 profit. We are Non returning tax residents in NZ so pay min tax.

We moved away from NZ about 2 years ago to our native Maldives. Its nice but our income is about NZ$20,000 in here for me wife and 3 kids. We live very comfortably as has free accommodation.

We did withdraw our kiwisaver last month and got around $200000 in our account. We didn't tell our banks that we are leaving the country as that would have complicated things. I still have my NZ vodafone number which I used to call the bank when fixing new rates and stuff. So far pretty good and we pay capital and interest.

We also locked in our capital gains over the past years by selling the properties from our company to our personal names about a year ago as Taxindar was in power.

We are looking at buying a house in Christchurch for around $500,000. Will we be able get a mortgage from and 1st or 2nd tier lender?

We are not going to approach our current banks A*Z and WP as they might gobble our cash reserves and cancel O/D facilities. We have around $200,000 O/D facility from A*Z and WP. I am reasonably good at flipping NZX sharers but we love houses.


Any thoughts much appreciated...

[JBM]

$1.3mill in free equity 2.3% net or gross return ?? and you want to increase that investment plan, I'm sure you have made very large Cap Growth on properties but I personally see this cycle coming to an end ... if it was me I'd be selling out while the market is still rather healthy.

[Davo36]

Is this for real?

[Beginner1]

$1.3mill in free equity 2.3% net or gross return ?? and you want to increase that investment plan, I'm sure you have made very large Cap Growth on properties but I personally see this cycle coming to an end ... if it was me I'd be selling out while the market is still rather healthy.

When you put it like this, it is poor return. This is our retirement nest egg and we are 35 now and hopefully they will be paid off when we are 50. We have no real goals in life, just live each day as it comes.. Worst case we will have to get real jobs or do a business properly. We will keep the kiwisaver money and invest when the NZX drops a wee bit further.

[Don't believe the Hype]

And this is why property is such a popular investment choice.

Twitford and co will try as they might to get people to invest in other places but the autopilot nature (set and forget) of pay of a couple of properties by 65 to live of the rent is pretty easy to understand and if you're lucky enough to earn a few more bucks than you spend throughout your career and take action early you can ride out the ups and downs and end up in a nice spot.

This might not be the shrewedest (is that a word) investment but it's not a bad plan. in 5 years we'll know if 2019 decision to buy another place was a good one or a bad one but if you'd had those concerns over the past 15 years you'd be 35 trying to buy your first home.

My advice is don't overextend yourself... if you can cover the costs and stress test your purchase on a 8% - 9% mortgage rate and you can hold your nerve should you buy and the market drops stay focused on the end game and pay off the mortgage you'll be fine.

[Nick G]

I guess you bought those properties for less than they are worth :-)

Anyway, agree with Hype. Work out what could kick you in the ass and mitigate.

[Beginner1]

I guess you bought those properties for less than they are worth :-)

Anyway, agree with Hype. Work out what could kick you in the ass and mitigate.

We paid 1.5million for all 6 properties over the period from 2008 to 2015. Gross yield was around 7.5% average when they were purchased. Last year gross yield was 8.7%. This year this may be 10% as we increased rent. I know lot of you guys are getting 10-15% gross yield from the get go, but for us its slow going Thanks Nick..

[Beginner1]

And this is why property is such a popular investment choice.

Twitford and co will try as they might to get people to invest in other places but the autopilot nature (set and forget) of pay of a couple of properties by 65 to live of the rent is pretty easy to understand and if you're lucky enough to earn a few more bucks than you spend throughout your career and take action early you can ride out the ups and downs and end up in a nice spot.

This might not be the shrewedest (is that a word) investment but it's not a bad plan. in 5 years we'll know if 2019 decision to buy another place was a good one or a bad one but if you'd had those concerns over the past 15 years you'd be 35 trying to buy your first home.

My advice is don't overextend yourself... if you can cover the costs and stress test your purchase on a 8% - 9% mortgage rate and you can hold your nerve should you buy and the market drops stay focused on the end game and pay off the mortgage you'll be fine.

Well Said!!. Cheers...

[JBM]

Right, so your net 30k profit is after interest and principal payments have been made to see the properties paid off at current rates in the next 25yrs or so? If so brilliant

Purchased my first commercial property DEC17 380k with 10.55% net return (tenant pays all-outgoings and re-painting cladding etc )

At current I&P payments will be paid off in another 12yrs -- and I have an excess of $583per month (which easily pays TAX, accountant costs)

Now I've basically put no funds into the property using free RES equity to fund the purchase... well outside $1k

Currently working on another small commercial property with net 8.2%

RES investment peoperty looking fully valued IMHO ... and I don't see much Cap Gain over the next decade well nothing like the last couple