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  1. #471
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    Bad time to buy a rental property IMO. Current government is anti landlord and pro tenant. However, they haven't twigged yet that adding extra costs and compliance on landlords might lead to some exiting the market including not buying / building new. Which is good news for remaining landlords as they hike rents (ECON101).

    Silver lining, but not for tenants.

  2. #472
    FEAR n GREED JBmurc's Avatar
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    Quote Originally Posted by ynot View Post
    Having recently been reviewing my retirement investment strategy and found this thread. I have a debt free house and $500k.

    Im considering a rental property purchase with the $500k but would be interested to hear what others think about REIT's as an alternative investment. Have not been following them lately so not sure about how they will perform looking forward.
    I personal would avoid Residential property at this stage ..year to two ago I would have said look to the likes of invercargill-dunedin etc but now both have gone up pushing av. yeilds(for properties with Cap growth potential in good areas) to much lower levels and with all the costs one has renting properties and damage one always gets..

    Personal if I had a spare 500k I'd be buying another Commercial property ... much less hassle if you buy the right property
    a couple I would be looking closer at ..down my neck of the woods

    https://www.realestate.co.nz/3461424
    10% yield .long term fixed term lease.. does need some earthquake strengthening but I understand Oamaru has very low earthquake risk so local council would give you a longer term to bring upto min standards which going from the picture look like the front facade has already been upgraded ?? ...

    https://www.realestate.co.nz/3407006
    Well built good location 8% yeild
    "With a good perspective on history, we can have a better understanding of the past and present, and thus a clear vision of the future." — Carlos Slim Helu

  3. #473
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    Quote Originally Posted by Bjauck View Post
    How much do you have in KiwiSaver (and in any other pension schemes) and in what type of KiwiSaver fund? What type of debt-free house do you have. If it is a big house in an expensive location, then that gives you the ability to trade down to a cheaper property and gives you an extra cushion of financial security that could be drawn upon in retirement. Also depending on the KiwiSaver balance you may be able to make a more risky property or Real estate related stock exchange investment with your $500k

    Both house prices and stock exchange prices have had good increases in prices and may well be entering a consolidation phase now. Is your 500k currently in a big Aussie bank?
    I have already traded down the expensve house. New house cost 500k and now have 500k in the bank. (nz$)
    Nothing else of any major value. All cashed up including kiwisaver.

  4. #474
    ShareTrader Legend Beagle's Avatar
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    Quote Originally Posted by ynot View Post
    I have already traded down the expensve house. New house cost 500k and now have 500k in the bank. (nz$)
    Nothing else of any major value. All cashed up including kiwisaver.
    Would you like me to start a new thread for you in the main NZX section so people can opine on this. Perhaps a heading like this.
    I have exactly $500K to invest in my retirement years. What portfolio investment stratagy would you recommend to maximise my long term wellbeing ?
    It might help people to refine their recommended strategy for you if you stated your approximate age and if its just you or you and your partner and I assume you're getting National Superannuation ?
    Is it a major goal to leave as much as possible to your kids (if any) when you pass on or are they ratbags like mine are and don't deserve anything ?

    You might as well tap into the collective wisdom on here.
    Last edited by Beagle; 09-01-2019 at 01:02 PM.
    Ecclesiastes 11:2: “Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.
    Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine

  5. #475
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    Thanks, New thread, yes. Major goal would be "lower risk, " somthing left for my kids maybe but i want steady return for myself to supplement my nz super.

  6. #476
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    Sth Island. New Zealand.
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    Quote Originally Posted by JBmurc View Post
    I personal would avoid Residential property at this stage ..year to two ago I would have said look to the likes of invercargill-dunedin etc but now both have gone up pushing av. yeilds(for properties with Cap growth potential in good areas) to much lower levels and with all the costs one has renting properties and damage one always gets..

    Personal if I had a spare 500k I'd be buying another Commercial property ... much less hassle if you buy the right property
    a couple I would be looking closer at ..down my neck of the woods

    https://www.realestate.co.nz/3461424
    10% yield .long term fixed term lease.. does need some earthquake strengthening but I understand Oamaru has very low earthquake risk so local council would give you a longer term to bring upto min standards which going from the picture look like the front facade has already been upgraded ?? ...

    https://www.realestate.co.nz/3407006
    Well built good location 8% yeild
    I couldn't agree more about commercial/industrial as opposed to residential. Some of the syndicates available are well worth considering. e.g. this Wellington one is being syndicated in $200,000 lots with projected return of over 10%. (Disc - I have gone into this one, but possibly some titles still available) Main tenants look good.

    (Spark, BNZ and AMP.)

    https://www.stuff.co.nz/business/pro...ding-ever-sold
    Last edited by fungus pudding; 09-01-2019 at 01:12 PM.

  7. #477
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    Thanks, New thread, yes. Major goal would be "lower risk, " somthing left for my kids maybe but i want steady return for myself to supplement my nz super.
    Yes just the wife and i. Im 65 she 63.

  8. #478
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    Quote Originally Posted by ynot View Post
    The million dollar question, or .5m in my case, is how do I choose this portfolio and secondly how do I manage it. I am not averse to researching the subject but I am afraid of getting it wrong.
    Sorry can't help you as I know nothing but nice to know there are others like me who are unsure where to invest. Would be interested to hear back what you decide.
    I think 2018 was a good year for cash compared to other investments.
    https://www.cnbc.com/2018/12/20/the-...d-in-2018.html
    No yield but if asset prices are falling then it works out OK. You are however taking a chance that central banks will eventually make your money worthless with low interest rates and money printing. Have read a lot about "time in the markets, not timing the markets" blah blah but think I am smarter than the experts who dedicate their lives to investing so continue to unsuccessfully try and time the markets.

    Not a recommendation but I am waiting another year (or two) to see if I can time the next major downturn and buy investments at half price. Janet Yellen has stated that we shouldn't expect another downturn in our lifetimes which may be right. I am not a phd and she is way smarter than me, yet I will wait a bit longer as December 2018 maybe gave us a glimpse into the future, at least up until Jay Powell confirmed investors can rely on the Fed Put.
    Last edited by Aaron; 09-01-2019 at 01:59 PM.

  9. #479
    Guru
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    Aug 2012
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    Quote Originally Posted by Aaron View Post
    ...
    I think 2018 was a good year for cash compared to other investments.
    https://www.cnbc.com/2018/12/20/the-...d-in-2018.html
    No yield but if asset prices are falling then it works out OK. You are however taking a chance that central banks will eventually make your money worthless with low interest rates and money printing. Have read a lot about "time in the markets, not timing the markets" blah blah but think I am smarter than the experts who dedicate their lives to investing so continue to unsuccessfully try and time the markets...
    In 2018 these were the following approximate after 33% tax returns (included both taxed income and untaxed unrealised capital gains during the year) for various asset classes:

    NZ Cash (in a big bank): <1%
    NZ 12-month Term Deposit +2.3%
    NZ bonds mixed portfolio +2.5%
    NZ shares +5.2%

    With inflation running at about 1.9% only NZ shares would have provided a reasonable amount of return plus capital CPI purchasing power preservation. Bonds and 12 month td would have given you an after inflation and after tax return of approx 0.50%.

    So, whilst maintaining capital purchasing power, to currently provide an independent after tax retirement income of $30,000 from rolling over term deposits with varying lengths would require $5,000,000 of capital. (3.7% is the current rate for a BNZ 5-year TD)

    If you are prepared to have your capital value eroded by inflation, $30,000 after tax income from term deposits would require $1,300,000 in capital. But that income would be static (and dependant on changes in interest rates) so inflation could erode what it could buy each year.

    Disc: Assuming un-changed tax system. All figures are Very approximate. DYOR.
    Last edited by Bjauck; 19-01-2019 at 09:24 AM.

  10. #480
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    Finally it has been worked out $785,000 plus a mortgage free house for a comfortable retirement.
    https://www.stuff.co.nz/business/mon...ces-retirement

    Or has that been pointed out earlier in this thread. It is possible for me but will involve some significant sacrifice or some lucky investment decisions between now and retirement. Not sure if scrimping and saving my whole life for a comfortable retirement is the best option. Options are decreasing fast as time seems to speed up as I get older.

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