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  1. #31
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    Quote Originally Posted by kiora View Post
    There was a commuter train Hamilton - Auckland that was shut down 5? years ago due to lack of patronage.It may be better patronized now & be time to bring it back.
    https://www.facebook.com/HamiltonCommuterTrain
    Probably the key to that would be an efficient and relatively rapid train(which is probably no easy feat)

    Just a note on my earlier post about property--When I said I didnt do it like some investors (over leveraged) I did have mortgages,but just made sure I had a high amount of equity--(none of this 95-100% of value borrowing)

    I think the whole thing would work better these days in a place more like Hamilton or somewhere out side Auckland where the prices were more affordable--unless of course there is a crash.

  2. #32
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    Quote Originally Posted by kiora View Post
    By my rough calculation it works out out at 20% compounding return/yr
    Infratil is close to that
    My historical past 5 yr return on sold shares is between 15 - 20% annualised depending on which market (UK, US or NZ). This does include the down years. Overall, as I run both property and shares, on a straight non-leveraged return my shares do better but as I am only leveraged for property, wealth comes from good property. I keep a portion of money in the sharemarkets and when I deem my investment to be over my fair value, I sell it and put it into property principal reduction.

  3. #33
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    Quote Originally Posted by nextbigthing View Post
    Here's an interesting stat that may prove useful, in the 24 months following Black Tuesday, the market cap of public property companies in NZ fell by nearly four fifths!
    The property companies of that time were carrying on as though there was no tomorrow. Landmark and RJI were prime examples. And anything called a share reached absurd levels, therefore a long long way to fall.Current LPTs are quite different

  4. #34
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    In my opinion their are 2 main problems for a commuter train from Hamilton to Auckland.
    It would have to leave Hamilton around 6am which is when a lot of freight trains are arriving in the area from south and freight would get preference.
    2nd the Whangamarino swamp has only 1 line so thats where all the hold ups would be.

  5. #35
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    Quote Originally Posted by beetills View Post
    In my opinion their are 2 main problems for a commuter train from Hamilton to Auckland.
    It would have to leave Hamilton around 6am which is when a lot of freight trains are arriving in the area from south and freight would get preference.
    2nd the Whangamarino swamp has only 1 line so thats where all the hold ups would be.
    It would cost a lot of money to make the line into a higher speed double track. However it could be worth it, if Auckland prices remain high and new builds remain below what is needed.

  6. #36
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    Quote Originally Posted by BeeBop View Post
    Overall, as I run both property and shares, on a straight non-leveraged return my shares do better but as I am only leveraged for property, wealth comes from good property.
    Why are you allocating your debt against propety? Just because thats what it is secured over?

    Consider it different way.

    You have property worth $X, and shares worth $Y. Deduct from that portfolio debt of $Z (which just happens to be secured over property to give you a low interest rate).

    My guess is you are probably overweight in Property yet your returns on an EBITDA basis are probably alot lower.

    You could argue the counterfactual that without the property, you wouldn't be able to get debt, which is a far comment. Always compare like for like, while being mindful of the benefits of each.

  7. #37
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    Quote Originally Posted by Harvey Specter View Post
    ...
    My guess is you are probably overweight in Property yet your returns on an EBITDA basis are probably alot lower.

    You could argue the counterfactual that without the property, you wouldn't be able to get debt, which is a far comment. Always compare like for like, while being mindful of the benefits of each.
    That is the advantage of (real estate) property...you can easily borrow money against it...so I guess you could argue that the profits derived from shares bought with the mortgage moneys should be allocated as being derived from the real estate.

    The current NZ tax system plus ability for investors to leverage all add up to owner occupiers being gradually priced out of the residential property market in NZ (esp Auckland).
    Last edited by Bjauck; 12-10-2015 at 08:34 AM.

  8. #38
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    Quote Originally Posted by Bjauck View Post
    The current NZ tax system plus ability for investors to leverage all add up to owner occupiers being gradually priced out of the residential property market in NZ (esp Auckland).
    Its not the Tax System!!! Its the banking system which allows for much lower interest rates for property.

    I have debt secured over shares and it is treated exactly the same as debt secured over property, the only difference is the interest rate is 1.2% higher and the loan to value is much lower (and not even allowed on some shares).

  9. #39
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    Quote Originally Posted by Harvey Specter View Post
    Its not the Tax System!!! Its the banking system which allows for much lower interest rates for property.

    I have debt secured over shares and it is treated exactly the same as debt secured over property, the only difference is the interest rate is 1.2% higher and the loan to value is much lower (and not even allowed on some shares).
    It's both. You have to pay more in interest because shares can individually be more risky and prices fluctuate more.

    You are able to more easly get amortgage against real estate for a greater percent of capital value which coupled with the tax system means you can become negatively geared and end up getting an income tax refund whilst earning leveraged capital profits on your real estate investment.

  10. #40
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    Quote Originally Posted by Harvey Specter View Post
    Why are you allocating your debt against propety? Just because thats what it is secured over?

    Consider it different way.

    You have property worth $X, and shares worth $Y. Deduct from that portfolio debt of $Z (which just happens to be secured over property to give you a low interest rate).

    My guess is you are probably overweight in Property yet your returns on an EBITDA basis are probably alot lower.

    You could argue the counterfactual that without the property, you wouldn't be able to get debt, which is a far comment. Always compare like for like, while being mindful of the benefits of each.
    that depends on whether you are going for absolute maximum profit or more of an element of saftey(in terms of more equity in your properties)
    Its hard to see what the economic future is atm but there is certainly real chance that things could get ugly and that is not an environment you want to be over leveraged in--even with low interest rates,paying off a greater % of your debt on property is not a bad place to be.


    Meanwhile --Train to Hamilton--Is a rush hr delay for freight more important than helping to solve the housing crises? (especially considering some of the massive housing projects in all ready overcrowded Auckland to solve the housing crises ,but at the same time ,add to the traffic crises.---no easy answers --I wonder how a rail upgrade compares to a major road work (like the Northwest motorway extension incl tunnel)
    Hamilton is pretty well equipped with the hospital and all--train line would also incl. Huntley.
    Last edited by skid; 12-10-2015 at 09:58 AM.

  11. #41
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    If you are wanting a train from Auckland to Hamilton, I would imagine it would need new lines. For it to be a goer, I think it would have to be a pretty fast train around 200 kph, something in the region of 30-40 minutes.

    It would be awesome for Hamilton and I'm pretty sure that Hamilton would do quite well out of it with businesses considering being based in Hamilton. However, given all of the half arsed kiwi infrastructure projects that have been done over the last 100 years, I don't see this anywhere on the horizon.

  12. #42
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    Quote Originally Posted by Harvey Specter View Post
    Its not the Tax System!!! Its the banking system which allows for much lower interest rates for property.

    I have debt secured over shares and it is treated exactly the same as debt secured over property, the only difference is the interest rate is 1.2% higher and the loan to value is much lower (and not even allowed on some shares).
    That's true. The capital that banks are required to hold in respect of their loans for property is much lower than that required for loans for "riskier" purposes. Makes sense - except perhaps when property bubbles develop!


  13. #43
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    Quote Originally Posted by Nasi Goreng View Post
    If you are wanting a train from Auckland to Hamilton, I would imagine it would need new lines. For it to be a goer, I think it would have to be a pretty fast train around 200 kph, something in the region of 30-40 minutes.

    It would be awesome for Hamilton and I'm pretty sure that Hamilton would do quite well out of it with businesses considering being based in Hamilton. However, given all of the half arsed kiwi infrastructure projects that have been done over the last 100 years, I don't see this anywhere on the horizon.
    The current government does seem to be reactive rather than proactive. However given current immigration / upper North Island pop growth demand for housing and transport will grow and perhaps at some stage there could be a private public partnership to provide a modern rail service Ham-Auck. May an IFT-Super-Govt partnership...

  14. #44
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    Quote Originally Posted by Harvey Specter View Post
    Why are you allocating your debt against propety? Just because thats what it is secured over?

    Consider it different way.

    My guess is you are probably overweight in Property yet your returns on an EBITDA basis are probably alot lower.

    You have property worth $X, and shares worth $Y. Deduct from that portfolio debt of $Z (which just happens to be secured over property to give you a low interest rate).

    You could argue the counterfactual that without the property, you wouldn't be able to get debt, which is a far comment. Always compare like for like, while being mindful of the benefits of each.
    Absolutely fair comment and well worth me including in my tracking.

    So even if I subtract my current WACC (5.21%), the returns are still good 10% to 15% with the 10% being my NZ portfolio (which has a LVR of 35%). And yes, I am well overweight in property, running an overall share portfolio of between 5 and 10% of the property (excluding our Kiwisaver untouchable). The problem for me is, I have no "professional" financial/investment training (but have been investing for more than 20 yrs) and am working totally solo due to location and situation. The time I need to put into the shares is very very high as I need to ensure that my overall return is better than the mortgage rate (I don't include capital gains for properties). The shares give me international reach and better liquidity. When the portfolio gets larger I sell and reduce debt. So far the process has been working and I don't feel confident enough to put more money into shares - someone can live in a house when everything goes wrong but when a share goes "belly-up" it merely goes to a $0 value (Aero Inventory case in-point as one of my early zeros due to accounting fraud!).

  15. #45
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    Quote Originally Posted by Nasi Goreng View Post
    If you are wanting a train from Auckland to Hamilton, I would imagine it would need new lines. For it to be a goer, I think it would have to be a pretty fast train around 200 kph, something in the region of 30-40 minutes.

    It would be awesome for Hamilton and I'm pretty sure that Hamilton would do quite well out of it with businesses considering being based in Hamilton. However, given all of the half arsed kiwi infrastructure projects that have been done over the last 100 years, I don't see this anywhere on the horizon.
    I used to take the train from Kyoto to Osaka (japan) it was nowhere near that fast --took about an hour---If you were starting from scratch though you would want an express and local--if you live at one of the less used stations you simply get off the express at the nearest big station and transfer to the local for your stop----1 hr would be perfectly acceptable from Hamilton to AK and back(while you read the paper or do your computer work)

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