Property gurus

[nz320i 0]

Im looking at buying something to do up, and then saw in the press a couple of weeks ago prices of little places over in italy!? For a rather small apartment its cheaper than here so why not buy and rent advertised from a website?

Opinions please

[madandy 0]

What sort of price range are you talking..? Small apartments in NZ vary quite a lot in value depending on City and suburb.

I like to keep a close eye on investments...if you can visit regularly or trust the property management service and if the region is showing signs of growth for a strong return I guess it's a nice option.

[ThreeOneEight 0]

How many apartments are actually 'doer-uppers' though? The Italian places would be good for holidays, not so much for a small-time NZ based investor. I look after a few investment properties in the Wellington region(no apartments- I like the security of owning the land rather than borrowing a miniscule share of it!) on behalf of my family trust, it's easy to look after things locally, and the bonus is you can decide who rents it off you by meeting them in person.

If you really want to be an absentee landlord, it's best to use a property management company. But personally, I'd rather keep things local, at least while it's your first foray into property.

[bravo 35]

If you have to ask us if its a good idea, don't do it. Very complex. You need to spend alot of time over there to ensure that where you are buying will produce a good return. You have to have good language skills. You have to trust the vendor and a property management company. You have to find out the rules in that country for foreign investors. And tax. And then NZ's rules about tax on foreign property investment.

Its just way too much for a first time investor to make afullyinformed choice. You might get lucky and it pays off, but IMO the risk outweighs the potential returns. And thats without even knowing what they are.

[jpp 0]

I don't own any property yet. I'm looking at going in mid-next year when sh*t hits the fan.

Consider going in with others, do your homework. Italy would be fine, if you consider staying there. Otherwise, newbies should stick to home turf that you know and can check up on.

I don't think you will make mega bucks on your first few houses unless you can do most of the work yourself.

But a tip I learnt it, the profit it made on the purchase.

Look for mortgagee sales, find land with two dwellings etc.

My 1c.

[Braeden320 0]

If you have to ask us if its a good idea, don't do it. Very complex.

So true...

[kiwi535 538]

yes who knows what the laws are in italy regarding overseas investors,let alone what happens regarding tax etc here?Then throw currency fluctuations inro the mix!

[martyyn 2]

If you have to ask us if its a good idea, don't do it.

Your right Bravo its not easy, otherwise every one would be doing it. But the only stupid question is the one that isnt asked and we all have to start somewhere.

[m325i 709]

You could probably make money off it, but you could do that here also.

You have to ask yourself if overseas propert deals are that great, then why aren't they snapped up by locals.

Its the same with those aussie companies that flog sh*t over here. Do you really think Australians are nice enough and think 'nope, better let the kiwi's buys these, wouldn't be fair of us to take all the profits'.

Property isn't rocket science. The biggest hurdle is motivation to do it.

Also as someone mentioned, it is far riskier if you can't physically keep tabs on it.

Oh and stay away from Auckland city apratments, (at least as a novice), and leasehold proeprty. (cross lease = OK).

[Cale 36]

Some of my family own property in European countries.

You have to know the Bureaucracy (sp?) and local laws very well,

and realise that things take 50,000 times as long to get done and for people to do as opposed to NZ.

[bravo 35]

Your right Bravo its not easy, otherwise every one would be doing it. But the only stupid question is the one that isnt asked and we all have to start somewhere.

Didn't say it was a stupid question.

Also, there are right and wrong ways to get into property investment. There are also differences in taxation on rental properties versus those you buy, add value to, then sell. Do some homework. There are some good books out there on property investment in NZ, and some good info on the web.

Also, don't put all your eggs in one basket - right now we are at a peak in the property market (give or take), and allthough values will continue to rise, sales have started to tail off which means you are paying the highest price just before possibly the slowest point on the graph. It may be better to invest in other areas until property has been flat for awhile (or dropped). Those looking to make a quick buck have already done so and most will now be looking at consolidating (I am). Those that got in at the end with little knowledge and too much finance will soon start to feel the pressure of the rising interest rates. Expect to see an increase in mortgagee sales soon and maybe get in that way.

Those of us with a few brains stopped increasing our exposure to property 6-12months ago and fixed our interest rates as it was obvious where things were going. (I am currently earning more interest on cash in my savings account than I am paying on my mortgage).

Or if actually being a landlord is too hard, you can buy units in property-based funds which often provide relatively good returns considering the lower risk.

[nz320i 0]

Looking at a place here tomorrow i think its a bit of a far-fetch for now buying over there!

[m325i 709]

Yep, nice Bravo.

If you are looking for a no brain easy quick buck, you have missed the boat.

If you can find a property to add value to (in any way), then you could still do it, but not like in the last 4 years where all you had to do is buy and hold to make capital gain.

Property, even in this market I still a good investment if you are prepared to hold long term. The reason for that is that it is so easy to negative gear your investment, (plus the tax benefits).

There are a few un-escapable facts IMO:

1. The cost of building is still high, and is still rising, quickly. So the replacement cost improvements is high.

2. The only new land that is being created is on the fringes of the city. This leads to the next point

3. Gas prices are going up and traffic is only getting worse. Therefore then value of inner city or close to inner city property will continue to be driven up because the cost of transport, (and time of transport for people to get to work), continues to increase. Simple supply & demand.

(Even if you assume prices are over inflated, once you deduct the replacement cost of the improvements the land values aren’t that crazy – even now)

There are more factors like migration that influence things, but these factors alone IMO will keep the market from 'crashing'. If there is a correction is will only be temporary, and then it only affects you if you have to sell your property at that specific time, as in a forced sale scenario.

The more relevant factor in this scenario is the interest rate, which if you can still afford is ok. (In the short run, considering the opportunity cost of your investment-which if you heavily gear is almost zero).

Summary: The best time to buy property was yesterday.

Edited November 5, 2007 by Nick G