NZ 1st homebuyers are ScReWeD...

[minimoke]

Hi Minimoke,

Thinking of buying a few rentals in your fair garden city over the remainder of 2009.

Heres one for you.
http://www.harcourts.co.nz/listing/d...0814&id=483919

CV is currently $188,000. But here'ss the beauty of it - its just down the road from the "House of Horrors" so this will devalue the property hugely - not a great time to sell. On the plus side you have three bedrooms - so you can get some bennies in there and start looking at a decent cash return straight away. Then you have the Council looking at demolishing the House of Horrrs and putting in a park - which, with peoples ability to move on and forget the murders, will see the property move up in value in time to come.

[JBmurc]

Not better, financial isn't a reason to do either. The financial benefits of owning a home over renting are consistently exaggerated in this country - based on a lot of misinformation. Of course, that is what HAS created house inflation in the past, though I wouldn't want to put my faith on that continuing.

So in your example, you are only going to be paying $20pw less in cash terms - but what about the cost of having that equity tied up?

equity tied up not really the bank will loan me upto 80% of the value of the home in my case loan funds 350,000 reg value of home 1m so free cap 650,000- 80% =520,000 I could loan from the bank at current fixed rates of say 6% for what ever I what.

You have no faith on inflation continuing LOL tell that to your landlord when he hikes your rent up..

[Dr_Who]

Heres one for you.
http://www.harcourts.co.nz/listing/d...0814&id=483919

CV is currently $188,000. But here'ss the beauty of it - its just down the road from the "House of Horrors" so this will devalue the property hugely - not a great time to sell. On the plus side you have three bedrooms - so you can get some bennies in there and start looking at a decent cash return straight away. Then you have the Council looking at demolishing the House of Horrrs and putting in a park - which, with peoples ability to move on and forget the murders, will see the property move up in value in time to come.

The only problem I find investing in the poorer areas is that it is hard to find good tenants. They tend to treat your rental property like a pig style. Look at the mess in the backyard of the house in your link For Sale.

[minimoke]

Look at the mess in the backyard of the house in your link For Sale.

Mess? Thats a sun lounger and a fish filleting table as a bonus. And a place for a sheltered hangi/umu - what more could your tennants ask for!

[The GrandMaster]

You have no faith on inflation continuing LOL tell that to your landlord when he hikes your rent up..

I've been renting for nearly 15 years now, occupying 3 different places, and never have I had a rent hike. If the landlord wants to get rid of tenants as good as us, then they can roll the dice.

Meanwhile I will happily let the landlord take the bet that the value of the property will go up to offset the negative return they are making at the moment. If it pays off for them, good on them, but I've got better things to do.

[JBmurc]

I've been renting for nearly 15 years now, occupying 3 different places, and never have I had a rent hike. If the landlord wants to get rid of tenants as good as us, then they can roll the dice.

Meanwhile I will happily let the landlord take the bet that the value of the property will go up to offset the negative return they are making at the moment. If it pays off for them, good on them, but I've got better things to do.

so you've paid 520pw for 15yrs thats some $405,600 in rent nice one keep renting for another 22yrs without any rent rises an you would have paid $1,000,000 in rent



personal I can't wait to finally have are own home next year an then to have it dept free before I'm 40 like having cash in the bank ...except you can live in it

[The GrandMaster]

so you've paid 520pw for 15yrs thats some $405,600 in rent nice one keep renting for another 22yrs without any rent rises an you would have paid $1,000,000 in rent

personal I can't wait to finally have are own home next year an then to have it dept free before I'm 40 like having cash in the bank ...except you can live in it

"never had a rent hike"

but that's alright, I'll play your game. based on the average interest rate over the last 15 years, that would be $594,000 in interest I have not paid (or interest I have not forgone). no capital gain, but then I have made capital gain elsewhere.

as you mention, it's a personal decision, not a financial one. that's my only point. i just prefer cash I can spend rather than that I can sit in...

[minimoke]

The only problem I find investing in the poorer areas is that it is hard to find good tenants. They tend to treat your rental property like a pig style. Look at the mess in the backyard of the house in your link For Sale.

Theres also a risk of arson - the "House of Horrors" has now been burnt down and probably adding a bit of value to the house on the previous page.

[Dr_Who]

Anyone else here still think the property market will fall 30-40% and will not go back up for another 3-4 years?

I recall a number of posters here strongly voicing a doom and gloom for the property market a 6 months back.

[miner]

Lots of the one's I have been watching over the years have dropped 30+%,as have said before depends where your looking,but then you guys just look at what suits what your saying.

Cheers
miner