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Junior Member
Thanks very much for your responses they have all been taken `on board`
Its very difficuilt getting a clear picture of where the market is going from the on-line news media. Most people seem to have some sort of agenda to what they are writing or presenting about. There`s nothing like getting some tips from people who are actually in there doing it.
It seems like were getting into a bit of a transition period with the property cycle. All i can do i guess is kick back and wait to see what happens in the next 1-2yrs while im over here(could even be here longer depending on how my teams goes).
I guess after a few months there will be a clearer indication of where we are going. Regardless im getting in there in the next 2-3 years and giving it a shot. Especially if i get the right kind of property and deposit and thus be able to have a positive cashflow from the investment then, i figure im in a no lose situation where someone is paying 12-15,000 dollars off my investment every year while im waiting for the market to come back up.
Also, thanks for the book reccomendations. They have gone straight on the Visa....
R2, thanks for those tips. Myself and my wife have been kind of hoarding money over here waiting for the right time to send it home as the exchange rate has dropped from Y60/NZ$1 to Y75/NZ$1 since we have been here. Its an absolute killer.
Sauce...cheers, your post is worth $$$$
Thanks... Matt
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Member
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Like Matty, I too am a resident of Japan and so I am able to borrow money from Japanese banks at low interest rates to buy property in NZ. I have recently secured a 25 year loan for US $120,000 (NZ$162,000) at 1.68% (not fixed). I have to put up 40% (NZ$108,000) of the value of the property myself. If I put up no more than 40%, I could buy a house worth about NZ $270,000.
The interest repayments would be (NZ$162,000 @ 1.68%) $2721 per year. If I get about 7% rental yield ($20,000) and have to spend a third of this on rates, insurance, management fees, etc. ($6,700) then I should be up about $13,300 per year not counting capital gain.
If the capital gain is 3% per year ($8,100) then my yearly profit is $21,400, which would mean my investment of $108,000 is returning 20% per year.
I have not included any one off costs of purchasing a house as I have no idea what they are. I would greatly appreciate any comments on my estimates. Are a 7% yield, a 3% capital gain, and a third of the rent being consumed by rates etc. realistic?
The major problem I see is a fall in the value of the NZ dollar. As the loan has to be repaid in yen a big fall could really eat into my profits from this investment. Given that the $NZ is at record highs ( US$ 0.74) a big fall is probably the most likely scenario. I have 6 months to decide whether to go ahead with the loan. Should I go ahead with it?
All comments welcome.
\"The overweening conceit which the greater part of men have of their own abilities [and] their absurd presumption in their own good fortune.\" - <b>Adam Smith</b> - <i>The Wealth of Nations</i>
The information you have is not the information you want.
The information you want is not the information you need.
The information you need is not the information you can obtain.
The informaton you can obtain costs more than you want to pay.
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Junior Member
yes by all means do,my partner has a 2 bedroom house in nelson(in the city on the hills,it has distant sea views in 4 places,redecorated in 2003)she paid $210750 for it in aug 2003,gv is $210000,its currently rented as weve moved to tauranga and managed by quinovic(they take 8.5% comission of the $260 a week rent)you can have it for $235000
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Thanks for the kind offer Danchop but at that price the yield is only 5.7%. I would also prefer to buy in Auckland so my dad can manage it.
\"The overweening conceit which the greater part of men have of their own abilities [and] their absurd presumption in their own good fortune.\" - <b>Adam Smith</b> - <i>The Wealth of Nations</i>
The information you have is not the information you want.
The information you want is not the information you need.
The information you need is not the information you can obtain.
The informaton you can obtain costs more than you want to pay.
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Junior Member
thats cool,dont know what auckland yields are but we are currently renting in tauranga for $270 a week and the landlords paid $389000 for the property 2 months ago
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Junior Member
we also have a property in beachlands(auckland)brought 3 years ago for $220000 rented for $360 a week,so thats a good yield but if you brought the property today it would probably be worth a little bit more than the $220000
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RMBBrave: This strategy could work wonders but has some tangible risks. Japan is the perfect country to research a company called EIE. Worth looking at some history before you make your move.
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quote: Originally posted by Halebop
RMBBrave: This strategy could work wonders but has some tangible risks. Japan is the perfect country to research a company called EIE. Worth looking at some history before you make your move.
This EIE ?
Shinsei to settle 'fraudulent' sale of resort property
Shinsei Bank said Monday it has agreed to pay 21.8 billion yen in damages to a failed resort developer to settle a legal dispute over sales of the developer's properties by the bank's predecessor.
In March, EIE International Corp. sued Shinsei Bank, formerly Long-Term Credit Bank of Japan, at a court in Saipan, seeking compensation for what it called "fraudulent" sales of its overseas properties in the 1990s.
LTCB, nationalized in 1998, was the main creditor bank for EIE International.
Shinsei Bank said the accord does not mean the bank has admitted responsibility.
The bank said it decided to pay because it does not want the case to drag on and eventually increase its personnel and other costs.
After making the payment to EIE International, Shinsei Bank will request reimbursement of 17.4 billion yen from Deposit Insurance Corp. under a contract it signed with the government-backed entity in 2000, the bank said.
\"The overweening conceit which the greater part of men have of their own abilities [and] their absurd presumption in their own good fortune.\" - <b>Adam Smith</b> - <i>The Wealth of Nations</i>
The information you have is not the information you want.
The information you want is not the information you need.
The information you need is not the information you can obtain.
The informaton you can obtain costs more than you want to pay.
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quote: Originally posted by danchop
we also have a property in beachlands(auckland)brought 3 years ago for $220000 rented for $360 a week,so thats a good yield but if you brought the property today it would probably be worth a little bit more than the $220000
No, not bad at all - 8.5%.
But, I'd be looking for something closer to $270,000.
\"The overweening conceit which the greater part of men have of their own abilities [and] their absurd presumption in their own good fortune.\" - <b>Adam Smith</b> - <i>The Wealth of Nations</i>
The information you have is not the information you want.
The information you want is not the information you need.
The information you need is not the information you can obtain.
The informaton you can obtain costs more than you want to pay.
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