NZ Looks Good From Where I Am Sitting

Posted on Tuesday, November 15 2011


I am sitting here back in my town of birth in England (not under the best circumstances) realising how good we really have it in our own back yard in New Zealand.
Not only do we have a wonderful lifestyle where 2 1/2 hour commutes are not the norm and you can afford to go to the game at the weekend without taking out an additional mortgage, but from an investing point of view as well.
We have far more consistent markets built on fairly sound economic principles in the main (and especially down south) where rent often covers the costs and you feel as either an owner occupier or a landlord that you can get ahead, start paying down the mortgage and end up with a nest egg.

We also feel that when we have built up this asset base, we can make more use of it ourselves and give far less of it to the rest of the country through tax. After all, it was our efforts of developing a strong team and an end product desired by the tenants that happened to make us a few quid along the way.

The problems of investors being offered lending levels of up to 125% of purchase price are still being felt here in England, plus the news of the euro zone failings do not stop.

Which will be the next country that will need a bail out? Your guess is as good as mine. It is good to see that our politicians have not allowed this level of worry to hamstring the country even though our own debt levels are also higher than we would like.

Rental returns are also far more realistic in NZ, I am sitting here looking at rental returns of around 4-4.5% with a borrowing rate of of around 3.8% and maximum borrowing for investment property of between 60-75% LTV. In Dunedin we have clients offering on 10% return properties with 80+% borrowing levels and interest rates around 6-6.5%. From a pure numbers point of view that is where I would be looking. If you have been considering adding some Cashflow property to your portfolio and want some assessment on rental returns through Otago then get in contact and we will assist as much as we can.

Tania and Kyle Elmer
Mana Property Management Ltd

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Expert's Bio

Tania & Kyle Elmer

Tania & Kyle Elmer are active investors with a large portfolio of properties in Dunedin and Central Otago and mentor investors in the techniques used to grow wealth through property investing. Kyle and Tania are Co-directors of the Leading Property Mangers of New Zealand (LPMNZ). Kyle is a past president of the Otago Property Investors Association (OPIA). They founded Mana Property Management Ltd to provide specialist management services to Discerning Landlords dealing in the quality end of the market. | Find Kyle on Google+

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