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  1. #11
    Antiquated & irrational t.rexjr's Avatar
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    Feb 2017
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    I've 1 rental left after having 5 or so properties over the last 20 years. The first 5-10 years was time and cash poor building the portfolio on the smell of an oily rag. If I include a value on that time then the return on investment is only vaguely satisfactory. Yes I'm left with a chunk of cash but on reflection I would've gone a different route. I certainly can't see why you'd bother now.

  2. #12
    FEAR n GREED JBmurc's Avatar
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    Sep 2002
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    Central Otago
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    If I had a good chunk of free cash or free equity I'd be looking to BUY another commercial property with long term lease (all outgoings paid for dealing with businesses much more straight forward) .. low interest rates book in 4.39% x5yr ... have seen a few potential great investments returning 7%+ net yields
    "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. #13
    Guru
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    Jul 2004
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    Depending on your situation, I'm still a fan of REIT's (at an appropriate price). Quarterly distribution, most run DRPs, much better liquidity, under professional management, diversification across a number of properties/business sectors etc - largely set and forget. I for instance don't have the experience, means or risk appetite to put all my eggs into 1 commercial property - but the downside is that can't leverage quite so much or so easily.

    For instance, in the last year could have bought Argosy for around $1.01, now $1.27, with quarterly distributions of 1.563c imputed.

  4. #14
    Legend
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    Apr 2008
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    Sth Island. New Zealand.
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    6,428

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    Quote Originally Posted by Sideshow Bob View Post
    Depending on your situation, I'm still a fan of REIT's (at an appropriate price). Quarterly distribution, most run DRPs, much better liquidity, under professional management, diversification across a number of properties/business sectors etc - largely set and forget. I for instance don't have the experience, means or risk appetite to put all my eggs into 1 commercial property - but the downside is that can't leverage quite so much or so easily.

    For instance, in the last year could have bought Argosy for around $1.01, now $1.27, with quarterly distributions of 1.563c imputed.
    In addition most are PIES so a big tax advantage to those on marginal rate of 33%.

  5. #15
    Advanced Member
    Join Date
    Dec 2001
    Location
    Wellington, , New Zealand.
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    1,701

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    There is a signiificant hassle factor with rentals already and more waiting in the wings. It's getting very complex and very expensive. It is not just about yield, capital gain etc.

    To anyone looking to buy a rental these days I would say - first check out what may be coming down the pike. Potentially large costs for Healthy Homes Act upgrades, fines up to $4000 for not meeting insulation standards payable to the tenant, ringfencing of rental losses*, more rights for renters (like termination notices only permitting some specific reasons, automatic right of renewal). All these are government or Labour policy.

    If that doesn't provide enough to deter, spend an hour or two looking over Tenancy Tribunal decisions. That should finish the job.


    OTOH, landlords are selling up for the above reasons, and also not buying another or building new at anything like the rate of 3 years or so ago. (Feb 2019, new residential lending to investors is now a third of mid 2016 - down thousands or rentals a month, Reserve Bank figures). So >> shortages, and with new compliances and costs shortages allow the pick of good tenants and getting the tenants to pay for the upgrades.

    *Ring-fencing of rental losses is quite major for those buying or building new rentals. Currently the Bill is in Select Committee with a start date of 1 April 2019. If it passes into law (likely) new rentals making the usual loss in the first 5 or 10 years will not be able to offset losses against other income (already the case with some ownership structures but capturing everyone if it becomes law).

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