House - Rent or Buy

[justsomeguy]

Hi there,

At some stage in our life most of us contemplate purchasing a home to live in. On this topic I have a few general questions.


For a first home buyer what do you all feel are some criteria in deciding whether to rent or buy??
Is it worth it to buy an apartment or wait and save up for a three bedroom house and get 2 flatmates to help you pay it off??
Any other issues you'll have come across that made you hesitate making a decision??
JSG

[Big Dave]

For a first home buyer what do you all feel are some criteria in deciding whether to rent or buy??

if you have the deposit - Buy. if you rent you are only paying someone else's house off - better your own.

Is it worth it to buy an apartment or wait and save up for a three bedroom house and get 2 flatmates to help you pay it off??

your first home decision should have one main criterea - potential for capital gain.

Provided you do it properly with a lease and agreements - better off with interviewing people you don't know. You might still end up with the flatmate from hell - but at least it won't cost a friendship.

Any other issues you'll have come across that made you hesitate making a decision??

Are you comfortable with the repayments.

[merv]

Hi there,

At some stage in our life most of us contemplate purchasing a home to live in. On this topic I have a few general questions.


For a first home buyer what do you all feel are some criteria in deciding whether to rent or buy??
Is it worth it to buy an apartment or wait and save up for a three bedroom house and get 2 flatmates to help you pay it off??
Any other issues you'll have come across that made you hesitate making a decision??
JSG

Whether to rent or buy is entirely about if you pay rent, you are paying someone else's mortgage so they get the capital gain - you get sweet f'all. If you are in a stable job and can afford paying a mortgage do it.

Whether you buy an apartment or a house doesn't matter as long as the property is a good one and the capital gain is there. Buying no place is the wrong choice as you lose out on the capital gain.

Getting flatmates in is a good idea if you are single and have the room because then you can treat it like a rental property and the rental portion (i.e. not your share of the house used for your own purposes) is tax deductible - way to go. So say 3 bedrooms you could claim 2/3 of all costs including interest as tax deductible against the rent from your flatmates.

Believe me, we tendered for another house on Friday and did not win the bid and the capital gains at present are still way up there no matter what anyone tries to tell you about the property market going flat it isn't.

If you start with nothing and buy nothing, you'll end with nothing. If that's what you want then OK. Otherwise go for it but don't over commit.

Hope that all makes sense.

[WINJA]

YOU DONT HAVE TO LIVE IN WHAT YOU OWN , FOR THE PRICE OF AN AVERAGE HOUSE IN AUCK YOU CAN BUY 2 IN THE WAIKATO WHICH WILL HAVE TWICE THE CAPITAL GAIN , AUCK HOUSE PRICES DOUBLE EVERY 8 TO 10 YEARS, WAIKATO HOUSE PRICES DOUBLE EVERY 4 TO 5 YEARS , BUYING IN THE NORTH WAIKATO IS PARTICULARLY GOOD, I GOT OFFERED OVER $100,000 MORE THAN WHAT I PAID FOR MY WAIKATO HOUSE JUST 9 WEEKS AFTER BUYING IT , MY AUCKLAND HOUSE HAS INCREASED IN VALUE BY $70,000 SINCE 1999 , THIS IS NOT ALWAYS THE CASE AND THESE BARGAINS WILL DRY UP SOON AND YOU HAVE TO FIND THE NEXT HOT SPOT.
KIWIS HAVE TO STOP THINKING THAT THEY HAVE TO LIVE IN WHAT THEY BUY ,
I ULTIMATELY WANT TO OWN 5 HOUSES BUT LIVE NOWHERE, I WANT A HOUSE BUS OR A OLD KAURI PLANK TUG BOAT TO LIVE ON .
RIDE TO HUNTLY,NGARUAWAHIA AND TEAWAMUTU AND LOOK AT THE REALESTATE SHOPS ON THE WEEKEND , PM ME IF YOU WANT TO STOP ROUND

[Big Dave]

YOU DONT HAVE TO LIVE IN WHAT YOU OWN ,

Yeah - you are right - but the kicker for me in living in rented digs (and owning investments elsewhere) is having a landlord. I hate that shit.
At least if i want to kick a door all i have to answer to is me.

[Dafe]

I just brought my first investment house today. Just heard I'd won the tender. I'm farkin stoked. Cost me heaps but it's bloody nice.
The reason I brought today is the same reason I reakon you should too....

Average house prices in NZ are going to annually gain at %15.
If you ain't got a home you're missing out on free money!
There are alot of people with money looking to invest in houses and there are not quite as many houses on the market at present.
You should buy a house with a good sized property as soon as you can.
The shit fight for house buying is intensifying all the time, thus house demand and prices are rising.

Your idea of buying and getting in some flatmates is Spot On!
Doing this will open many doors for your future.

[WINJA]

Yeah - you are right - but the kicker for me in living in rented digs (and owning investments elsewhere) is having a landlord. I hate that shit.
At least if i want to kick a door all i have to answer to is me.
SO GROW UP AND HAVE RESPECT FOR YOUR HOME

[Big Dave]

SO GROW UP AND HAVE RESPECT FOR YOUR HOME

Speaking metaphorically - I'm very house pwoud. Even weed the garden.
AND I have a lovely terra cotta roof that NEVER NEEDS PAINTING.

[WINJA]

Speaking metaphorically - I'm very house pwoud. Even weed the garden.
AND I have a lovely terra cotta roof that NEVER NEEDS PAINTING.
MY GOD DAMN ROOF , FUCK DAVE HOW HEAVY ARE YOU? CAN YOU PAINT MY ROOF? ILL LET YOU RIDE MY STREET MAGIC. OR YOU CAN JUST RIDE THE MAGIC
AND ILL GIVE YOU $10 TO JUMP MY CREEK

[Big Dave]

MY GOD DAMN ROOF , FUCK DAVE HOW HEAVY ARE YOU? CAN YOU PAINT MY ROOF? ILL LET YOU RIDE MY STREET MAGIC. OR YOU CAN JUST RIDE THE MAGIC
AND ILL GIVE YOU $10 TO JUMP MY CREEK


Too heavy for roof work and i'd need a street magic for each buttock.

[Devil]

Buy, Buy, Buy. No question. Get some flatmates.

Considerations: When you're budgeting for a mortgage, dont forget things like local council rates, regional council rates, water rates and whatever rates they decide to charge you with.

[WINJA]

Buy, Buy, Buy. No question. Get some flatmates.

Considerations: When you're budgeting for a mortgage, dont forget things like local council rates, regional council rates, water rates and whatever rates they decide to charge you with.
OR BUY TO RENT AND CLAIM THE TAX BACK ON THE ABOVE , THEN RENT A HOUSE YOU CANT AFFORD TO BUY

[Devil]

OR BUY TO RENT AND CLAIM THE TAX BACK ON THE ABOVE , THEN RENT A HOUSE YOU CANT AFFORD TO BUY
Or that, but for a first house situation, I'd prefer to buy the house and get flatmates (which is kind of what im doing. Bought one with the partner and have a mate living with us to help out). Personal preference though.

As soon as we have the minimum amount of equity in this house, we'll use it to buy a second house to solely rent out.

[Motu]

What kept me renting for many years was cheap rent - I've spent 12 years living in houses of my wife's family,getting very cheap rent while we did them up for resale,but getting nothing out of it ourselves.Shifting 6 times in one year got us off our arse and into our first home.This last jump in house prices saw me sidelined looking after my terminaly ill mother - I came out of it looking at another 25 yr mortgage,at age 50! I did as WINJA has suggested,and am now freehold in the North Waikato,I feel for once I made a move at the right time,before everyone else and my capital gain is 50% in 6 mths - come on down and increase the price of my house more so I can buy another property....

[WINJA]

What kept me renting for many years was cheap rent - I've spent 12 years living in houses of my wife's family,getting very cheap rent while we did them up for resale,but getting nothing out of it ourselves.Shifting 6 times in one year got us off our arse and into our first home.This last jump in house prices saw me sidelined looking after my terminaly ill mother - I came out of it looking at another 25 yr mortgage,at age 50! I did as WINJA has suggested,and am now freehold in the North Waikato,I feel for once I made a move at the right time,before everyone else and my capital gain is 50% in 6 mths - come on down and increase the price of my house more so I can buy another property....
OMG WE ARE NEIGHBOURS , PAINT MY ROOF

[Motu]

OMG WE ARE NEIGHBOURS , PAINT MY ROOF

Come and shift my cabbage tree! A great oaf like you should be able to tuck it under one arm.Why do people insist on planting trees next to houses,and in this case on the north side in front of a bedroom window,cutting out the light.I don't want to cut down such a beautiful tree...I'm gunna drag it out with the Pajero (just an excuse to use this 4x4 thing I've heard about) and put it in the hole I've dug out front.I gotta do it at night because I'm going to drop a Hoodie in the hole to give it a good start in transplanting.

[The Stranger]

In theory whoever wins the election is going to cut taxes.
The 2 outcomes that I believe we will see as a result are.

With the increase in disposable income people will be prepared to borrow more and be comfortable paying a bit more for a house (and other goods too) thus I believe that we will see a firming of house prices and pressure on inflation.
The reserve bank will be trying to reign in the inflationary effect of an increase in disposable income and as usual will increase interest rates.

My 2 cents. Not a bad time to buy but would be patient for a bargain, as well as the obvious benefits it, it also helps if the rates go up and be prepared for some mortgage rate increases.
You can always fix of course.

Hey I have been wrong before - but that was when I thought I was wrong.

[WINJA]

Come and shift my cabbage tree! A great oaf like you should be able to tuck it under one arm.Why do people insist on planting trees next to houses,and in this case on the north side in front of a bedroom window,cutting out the light.I don't want to cut down such a beautiful tree...I'm gunna drag it out with the Pajero (just an excuse to use this 4x4 thing I've heard about) and put it in the hole I've dug out front.I gotta do it at night because I'm going to drop a Hoodie in the hole to give it a good start in transplanting.
DONT FORGET TO TRIM LOTS OF LEAVES FIRST , SPRAY IT WITH LOTS OF WATER , AND KEEP IT WET ONCE TRANSPLANTED, I PUT ONE OF MY DEAD CHICKENS IN THE HOLE BEFORE PUTTING IN MY PLUM TREE , SEE IF YOU CAN FIND A ROAD KILL POSSUM OR CAT

[Racey Rider]

Come and shift my cabbage tree! A great oaf like you should be able to tuck it under one arm.Why do people insist on planting trees next to houses,and in this case on the north side in front of a bedroom window,cutting out the light.I don't want to cut down such a beautiful tree...I'm gunna drag it out with the Pajero ....

Cabbage trees have a huge tap root.
I doubt even the mighty Pajero could pull out a old one. (yes thats a challenge!)
If it is small enough to get out, you would need to cut the top off completly to compensate for the massive root damage, and stop it from being top heavy. Stake it well, as the top swaying in the wind is not helpful for new roots trying to get established. it will regrow from just the trunk.
Better off just to cut it out and plant a new one.
Cut it as low as possable and paint some stump killer on it, as it will still try and grow again from the smallist piece of remaining stump. (1/4 of Roundup/Diesel).

But why would you plant a new one?? They often end up looking messy with that cabbage tree disease, and catapilar notches in them. The leaves fall and have to be picked up before mowing. Leave them for the parks.

[Lou Girardin]

Mortgage repayments have been lower than rent for the past 2-3 years, although that is changing as rental demand slows. There is a strong possibility of interest rate rises in the next year as a result of the current vote auction and we are beginning a down cycle in house prices. Normally there's a 7 year cycle - peak to peak.
If you can rent at a reasonable cost and save too, it may pay to wait a year or two.

[strayjuliet]

There are some very good points out there. I have to agree if you can buy do so its a lot less fuss owning your own home than renting, trust me mate if i could afford to buy i would no holding back but alas i can't so im forced to rent and pay dead money for something that yes has alot of potential but i can't fix it or make it my own. If you are going to get flatmates in, then make sure you can still afford the mortgage on your own in case they do a runner, you can get into alot of trouble with the flatmates from hell or the flatmates who say "oh i didnt get my full wages this week will fix you up next week" next thing you know they've moved out one day while you were at work and hello you're out of pocket. don't just take my word for it there are some real good flatmates out there and also there are some real ass-wipes. Whatever you decide i wish you much luck.

[justsomeguy]

Thanks for all the great advice guys. I guess I should set up a time with a mortgage manager or something and see how big a mortgage I can qualify for.

[justsomeguy]

Mortgage repayments have been lower than rent for the past 2-3 years, although that is changing as rental demand slows. There is a strong possibility of interest rate rises in the next year as a result of the current vote auction and we are beginning a down cycle in house prices. Normally there's a 7 year cycle - peak to peak.
If you can rent at a reasonable cost and save too, it may pay to wait a year or two.

I see what you are saying Lou, but I really dont think it will work out cheaper.

Lets take the rent for a year, lets say $150 a week(all inclusive) for 52 weeks thats 7800, lets say 8000. That's 8000 less I can save or put into the mortgage and now-a-days banks only need 5% anyway...

I don't know - hated maths at school.

Could you elaborate please?

[Lou Girardin]

I see what you are saying Lou, but I really dont think it will work out cheaper.

Lets take the rent for a year, lets say $150 a week(all inclusive) for 52 weeks thats 7800, lets say 8000. That's 8000 less I can save or put into the mortgage and now-a-days banks only need 5% anyway...

I don't know - hated maths at school.

Could you elaborate please?

Consider the interest component of a mortgage the same as rent - non-productive outgoings.
If the capital value of the house is increasing, that offsets some of the interest outgoings. If not, you are only gaining by the amount of principle reduction you achieve, which is very little initially on a highly geared mortgage.
That's why it MAY be better to wait a year or two and save more dosh, then put a larger deposit into a property that will probably be cheaper than it is now.
But get some info on current mortgage rates and compare that to rental rates for the same kind of house before you decide.
I've always been lucky enough to buy at the bottom of a cycle and did quite well when selling.
Compensates for my crap luck with vehicles.

[Big Dave]

Thanks for all the great advice guys. I guess I should set up a time with a mortgage manager or something and see how big a mortgage I can qualify for.

Do it online. Check the banks web sites.

'generally' you need 5-10% deposit and can commit no more than 35% of your gross income to repayments - that is all repayments - credit cards, bike loans and mortgage can only add up to 35% of gross.

With many first home buyers a hefty vehicle outgoing will mean the do not qualify for a mortgage.

(I designed and sold new homes and finance in a distant galaxy long long ago)

[FROSTY]

My suggestion would be to hold fire about 6 months on the house buying thing.
Every indication is that the local (auckland) house market has gone soft and is gonna get worse
The best time to buy is in a slow market

[FROSTY]

ohh FYI -my house increased in value by 100k in 12 months
some of that thanks to the efforts of certain KB members

[Fart]

I have never ever met a financially independent person that rents.

[geoffm]

There are a number of advantages of owning a house - one is you can customise it the way you want. Want a 2 ton hydraulic crane and 440V 3ph power in your gargre? You can have it with money and owning the house. Landlords don't normally appreciate that kind of thing. OTOH, owning a house ties you down. If you are young, mobile and have itchy feet, don't buy. if you rent, you can go for that big OE on 3 weeks notice. Overall, owning is better than renting long term.
This applies to your own house - the numbers are different if you are buying to rent out to others. in that cse, you need to compare the return with that of equally risky investments, and most residential properties have piss poor returns when compared with the risk, and you have to deal with tenants (ickky)
Geoff

[justsomeguy]

I have never ever met a financially independent person that rents.

Well then stop spending all your time looking in the mirror .......:dodge: only joking

---Yeah I see your point. :sherlock:

[justsomeguy]

There are a number of advantages of owning a house - one is you can customise it the way you want. Want a 2 ton hydraulic crane and 440V 3ph power in your gargre? You can have it with money and owning the house. Landlords don't normally appreciate that kind of thing. OTOH, owning a house ties you down. If you are young, mobile and have itchy feet, don't buy. if you rent, you can go for that big OE on 3 weeks notice. Overall, owning is better than renting long term.
This applies to your own house - the numbers are different if you are buying to rent out to others. in that cse, you need to compare the return with that of equally risky investments, and most residential properties have piss poor returns when compared with the risk, and you have to deal with tenants (ickky)
Geoff

My whole interest was to pay (get paid by tenants) my own mortgage ...instead of renting which just pays someone elses mortgage or means i never see that money again.

[justsomeguy]

Another issue which has come up is whether I buy an apartment or a house.

What are the pros and cons of buying an apartment. What exactly are the mimimum that body corporates do for their fees.......????

From my browsing the real estate papers it seems a 3-4 bedroom city outskirts apartment would be cheaper than a three/ more likely two bedroom house which is the most I can afford wayyyyy out in the suburbs.

[mstriumph]

I hated renting ------ it was hell having to wheel the bikes out of the dining room when the rental inspections were due :dodge:

[justsomeguy]

I hated renting ------ it was hell having to wheel the bikes out of the dining room when the rental inspections were due :dodge:

Stupid landlords - they really should try and understand that we want all our family members living inside our houses:hitcher:

[justsomeguy]

My suggestion would be to hold fire about 6 months on the house buying thing.
Every indication is that the local (auckland) house market has gone soft and is gonna get worse
The best time to buy is in a slow market

Really?? I thought (personal opinion not based on facts)......

That in summer/Christmas lots of people buy new homes and as a result prices go up....... is this true or a myth??

[Fart]

Another issue which has come up is whether I buy an apartment or a house.

What are the pros and cons of buying an apartment. What exactly are the mimimum that body corporates do for their fees.......????

From my browsing the real estate papers it seems a 3-4 bedroom city outskirts apartment would be cheaper than a three/ more likely two bedroom house which is the most I can afford wayyyyy out in the suburbs.


Never invest in an apartment for the following reasons.

1. Body corporate fees for an apartment is very expensive.
2. The cost of running and maintenance for an apartment is very high. Especially serviced apartments with lifts and airconds.
3. Unlike other major cities around the world, NZ/Auckland has a small population and large land area for development. Supply of land exceeds demand in the long term.
4. Banks only lend 50% for apartments due to the low returns on capital gains and high risk.

If you look at the stats for house prices compare to apartments, you wil find that in the last 5 years house prices have gone up substantially, while apartments have stayed the same price.

All the best on your house hunting.

[Warr]

Own a Town-House here. Just 4 on the section and be a we back one. Minimal bit of lawn so next to no garden etc to look after.
Lucky to be the back one so no traffic.
Single residence's all round so not over-crowded.
Only single garage so it will look a bit full with 2 m/bikes in it!
Nicely planned and set-out. Private deck, Joins next house at the garage so minimal noise :)
And I'm in Hamilton and no not for sale.
Oh yea.. price is escalating same as other houses.

[justsomeguy]

Never invest in an apartment for the following reasons.


4. Banks only lend 50% for apartments due to the low returns on capital gains and high risk.

while apartments have stayed the same price.

All the best on your house hunting.

Thanks for the info matey. That pretty much strikes apartments off my list then...

:niceone:

[Fart]

Thanks for the info matey. That pretty much strikes apartments off my list then...

:niceone:

If this is your first house, just buy it and dont try to guess the market. In the long term, you will make on capital gains due to the leverage effect and also gives you comfort that you will have a house to live in. As long as inflation is at a high level, your house value will go up. Watch out for the interest rate movement. High interest rate will eventually have an impact on the house market.

I will give you a reason why you dont put all your money in the bank account at 6.5% interest. With inflation at 3% + tax you are only getting less than 2% per annum return on your investment if you put your money in the bank. If you buy a bike or car, you are losing 25% or more on your depreciating asset. Unless you can claim on tax, it is not worth putting most of your capital in a depreciating asset.

[Fart]

Big jump in value of city houses

17.09.05
By Wayne Thompson and Bernard Orsman

Aucklanders will soon receive confirmation of huge increases in the value of their homes, following three years of growth averaging 54 per cent across Auckland City, North Shore and Manukau.

A Weekend Herald survey shows the biggest increases have occurred not in upmarket suburbs but in working-class areas where first-home buyers and immigrants have been snapping up cheap and rundown properties.

Homeowners in Auckland, North Shore and Manukau will be receiving the latest three-yearly valuations of their properties over the next four months. To give them an idea of what to expect, the Weekend Herald surveyed more than 100 suburbs across the three cities, comparing house sales this year with the last official valuations, in 2002.

When the three councils revalue properties, they will use the new figures to set rates. Houses with an above-average rise in valuation will have an above-average increase in rates, and vice versa.

Suburbs such as Glen Innes and Otahuhu in Auckland City, Birkdale and Beach Haven on the North Shore and Manurewa East and Otara in Manukau have seen values rise much more than the average across their cities.

Terry Costello, Barfoot & Thompson Papatoetoe branch manager, said working-class suburbs such as Otahuhu, where house prices have risen by 81 per cent, were coming into their own after years of neglect. Immigrants were also fuelling the boom.

Many ex-rental properties were being snapped up and tidied, contributing to the sharp rise in prices.

Martin Cooper, of Cooper & Co, said the under-$500,000 market was strong on the North Shore, with many properties attracting multiple offers. His firm's last 50 auctions resulted in 92 per cent of the houses being sold within 14 days.

Overall, of the past 60 sales, one in five purchasers was a first-home buyer and one in six was an immigrant, Mr Cooper said.

Beach Haven is a good example of a relatively inexpensive North Shore suburb on the rise. Since May, 31 houses have sold for an average $343,445 - 76 per cent above the 2002 official valuation.

Desirable coastal suburbs on the North Shore such as Campbells Bay and Castor Bay have also experienced strong growth of about 80 per cent. Houses there start at about $450,000 and rise to more than $2 million, according to latest sale figures.

In Manukau City, strong demand for Manurewa East homes has led to them selling on average 59 per cent above their CVs, with average prices of $247,900.

Waitakere City valuations were done in March this year and showed residential land values rose an average 65 per cent.

Westpac senior economist Nick Tuffley said the much-talked-about slowdown in house prices had proven to be mild. "Next year we won't see prices going up at much of a clip."

Bank of New Zealand chief economist Tony Alexander said the increases were similar to other places in the country.

"Prices might pull back but that will happen mainly where they went ballistic, like Nelson and Hawkes Bay.

"Up in Auckland, really the only area likely to see outright price falls would be inner-city apartments."

http://www.nzherald.co.nz/section/story.cfm?c_id=1&ObjectID=10346000

[Groins_NZ]

So how is the house hunting going <B>justsomeguy</B>?

My partner and I are also looking for suitable properties around the Wellington suburbs - Wellington CBD is way toooooo expensive and beside we'd rather not live in the city.

Can anyone offer advise when it comes to open and closed tenders? Seems to be a lot of houses that are up for tender and you have no immediate idea of the propertys actual worth.

There must be some valid reasons why people (who are selling) are advised to put their home up for tender though?

[justsomeguy]

So how is the house hunting going justsomeguy?

My partner and I are also looking for suitable properties around the Wellington suburbs - Wellington CBD is way toooooo expensive and beside we'd rather not live in the city.

Can anyone offer advise when it comes to open and closed tenders? Seems to be a lot of houses that are up for tender and you have no immediate idea of the propertys actual worth.

There must be some valid reasons why people (who are selling) are advised to put their home up for tender though?

Still looking - may end up buying sometime early next year or my give the money to the olds and get a combined mortgage for another house - have them live in that other house and I'll stay in my current house and get some flatties.....

Tenders - no idea - CaN, MDU, Fart, care to comment ??

[Bartman10]

Personally I like the independence of renting. I can pack up and move anytime without any fuss.

I also like not having to spend all my weekends doing DIY. If there is a problem with the washing machine or drier or the plumbing in the bathroom leaks and wrecks the ceiling and carpet in the hall way I all need to do is ring the landlord. He gets someone to fix it, no worries.

Another thing - how many people do you see selling their motorbikes because of "house purchase forces sale".

In addition I figured I'm paying less in rent then I would be in interest on the same place.

But there are disadvantages too, like lack of security and no capital gains. You just have to decide whether you want care free living or the security of owing a house.

Another thing is that I don't really care about money that much - you can't take it with you - so you need to decide on your philosophy and act accordingly.

[Charlie]

Am in Wellington also looking to put my money into my own mortgage rather than the landlords. I owned a house in Palmy a couple of years ago and loved the freedom and security it gave me.
Now in Welly and another whole price bracket I've been renting and HATE it! I have a dog and going from home owner to tenant has been a hard game. I'm got tired of hearing "sorry no pets". :wacko: I do understand the landlords view but its still frustrating when you need a roof over your head and soon. Took me 6 weeks of hard work to find a place and then had to compromise something I really wanted (garage or safe storage for the bike) just because they'll accept pets. The pickings are slim! Anyway, thats my biggest motivation for buying now...

The tender thing; have not had any experience with tenders but my understanding is that prospect buyers submit an unconditional contract with price, settlement date and any other requirements they want the vendor to comply (eg; fix something, obtain permits etc) to the vendor by close date.
Then the vendor is presented all contracts at once. After considering them all they hopefully choose one and sign.
There is no real backwards and forwards negotiating etc, they can see in the tenders what spread the market is prepared to pay and the interest in the property. They simply pick the one that they like all the conditions/terms of the most, (if any) and hopefully tadaaa - SALE.

Feel free to correct me if I'm wrong - but I'm sure a quick phone call to any real estate office could answer you question.

Good luck with the decision/house hunt! :banana:

[ManDownUnder]

Still looking - may end up buying sometime early next year or my give the money to the olds and get a combined mortgage for another house - have them live in that other house and I'll stay in my current house and get some flatties.....

Tenders - no idea - CaN, MDU, Fart, care to comment ??

I prefer buying, simply because I know I'm in it for the long haul (like 20+ years) - with a couple of things to consider when you do it

1) Location. Work out where you want to live and why. If you hate being in town then there is no point in considering apartments. What amenities do you want to be near?

Go "open homing" and make a check list of all the things you spot that you'd like. A Spa, 3 bedrooms, en suite, roof in good condition etc. and give them a rating from 1 - 5 showing their importance. Go through a house, giiving each a ranking and take a digital pic if you can - after a few of them I found it was hard to remember which was were etc...

Don't forget to think/find out about the unseen stuff... how noisy is it on Friday nights? Is there a pub just down the road (parties etc). Bus Stops (you want one handy but not up your nose) etc.

Ask about projected works in the area (motorways going through etc). A giveaway for that one is that a lot of houses will be for sale for no apparent reason in one area... stop and ask why. Hell knock on a door of a house you are NOT interested in and ask. What are they going to do - say no?

As you look at each house check them off alongside your items.

2) Utility. If you are buying the house as an investment, consider setting up an LAQC Company - you'll get tax rebates and a bunch of other things.

Find an Accountant that knows about them - an Accountant outside of Auckland ... in a small town (they're cheaper), they went to the same schools and email is a wonderful thing when wanting to go over your accounts...

3) Market Timing
Right now the market is hot - good for sellers. The future is uncertain but interest rates are going up (and threaten to do so again) and there are a number of other factors indicating the market should slow.... but when, and how much is the great unknown.

Anyone saying they know for sure is lying, or trying to sell you something. Simply be prepared for the worst (i.e. house prices drop and interest rates go up... AFTER you bought). Don't cry, just hold onto the house because interest rates WILL drop (given 4 or 5 years), and house prices will recover.

4) Investment or Personal use. If you're going to use the house pesonally, the fittings etc you will choose will be different - more expensive, better looking, less industrial and "durable".

If investment, consider setting up the LAQC I mentioned above.

5) Budget and Advisors. Find out what you can afford, and stay within it.

Establish a budget you can reasonably afford in the worst times, and put in place some extra cash to tide you over hard times and unexpected expenses... Most common technique is to get a revolving credit account with (say) $100,000 when you only need $30,000 as part of the house purchase.

Manage your money wisely. Put all your pay into the Revolving Credit Account and spend as little as you need to. Put everything on your VISA and pay it off in full EVERY month. If you can't do that you need to learn it. VISA debt is a killer, and so easy to avoid.

Read books - there are PLENTY. Dolf de Roos, and Olly Newlands are two that come to mind.

Get independant advise onb structuring up your mortgage. Someone that knows the tricks (see my post to Kwaka Kid following his house purchase a while ago) and structure up the mortgage to suit you. Once a bank has you "signed up" they know it'll cost you money to change banks, so the riskiest time for them if BEFORE you sign up.

You are doing them the favour of bringing them business. Don't ever forget it. If they want to earn the $200,000 in interest from you they need to give something back. Free account fees, no setup fee... there's a bunch of stuff you can ask for. Write 'em all down, and take them in.

Don't give in to the "loyalty" stuff - "I've banked with them for 10 years... they know me". Nope. They have you on record and know what you've done. A Prison would have similar information...

Find and deal with a good Real Estate Agent (or a couple of them). When you get to know them they'll know you, and be able to help better. Be honest with them. If they ask for your top dollar - tell them the most you are prepared to spend. If/when they come back asking for more send them away. They got the answer last time. You're not playing hard ball - you';re being honest.

Find someone that is a real estate agent you can learn from. The aim of the game is to put pressure on everyone involved (vendor ond purchasor) in order to bring them to a sale as quickly as reasonably possible.

NEVER forget, the RE Agents are in this for the money, they act for the vendor but are actually selfish (as we all are). Don't bow to pressure, do things in your good time, and if something doesn't feel right then tread carefully.

Have someone experienced sit alongside you while making that first purchase. I know squat about Tenders so don't ask me for detailed advice on them.

[Groins_NZ]

Hey thanks <B>ManDownUnder</B> - a lot of good information.

[ManDownUnder]

Hi there,

At some stage in our life most of us contemplate purchasing a home to live in. On this topic I have a few general questions.

For a first home buyer what do you all feel are some criteria in deciding whether to rent or buy??
Is it worth it to buy an apartment or wait and save up for a three bedroom house and get 2 flatmates to help you pay it off??
Any other issues you'll have come across that made you hesitate making a decision??JSG

Hey JSG - I see I didn't actually look at the original post when answering...

so here's a snapshot response
1) Answered already
2) Buy the house. Apartment market in Auckland is TOO SMALL meaning there can be a severe shortage (pushing prices up) and with the completion of a building or two - there's a glut (prices drop).

If you can buy an appt at the glut price - go for it... but consider all the other costs too (car/bike parking, body corp fees etc)

3) Know your market. There's a 100:10:3:1 rule promoted by a couple of investment gurus which I think is worth considering
Look at 100 houses (paper, online etc)
Inspect 10
Put an offer on 3
Buy one

And that's AFTER you know what you're doing. To start with you're better off looking at the 100 in person.

Something else to keep in mind is that the "ideal house" isn't actually a single property. If you miss out on one, don;t worry about it - go find the next one.

Gimme a yell is you want to discuss mortgage stuff. I'm not a banker but have done a bit of financial modelling that'll highlight some tricks to shortening your mortgage while allowing you to have a life too...

MDU

[ManDownUnder]

Still looking - may end up buying sometime early next year or my give the money to the olds and get a combined mortgage for another house - have them live in that other house and I'll stay in my current house and get some flatties.....

Tenders - no idea - CaN, MDU, Fart, care to comment ??

As a thought - do your olds want a steady income into the future, and you have a cheaper mortgage?

Get the ongoing rate on their investment and add 1% or 2% (whatever), have them pay for the house and you pay them instead of the bank. They will become your lendor (and are entitled to all the same protections the bank is), but they'll earn a premium rate on the loan - and bein a better position than they would have been... and you'll save money too.

Perhaps an ongoing rate 1/2 way between the current deposit rate and the current lending rate?

You'd need to specify it up pretty tightly, and treat them as a lendor - not as your parents... and they would need to realise the payback term ain't going to be less than 10 years... so they'd need to be in for the long haul too

MDU

[Charlie]

2) Utility. If you are buying the house as an investment, consider setting up an LAQC Company - you'll get tax rebates and a bunch of other things.

Find an Accountant that knows about them - an Accountant outside of Auckland ... in a small town (they're cheaper), they went to the same schools and email is a wonderful thing when wanting to go over your accounts...

As luck would have it - this is what I do. If you have any questions on LAQC's or Tax/Accounting issues with investment property just ask me, happy to share what useful brain cells I have. Accountants anywhere charge the earth and I dont see the point in paying a lot as these are 9 times outta 10 pretty basic.

[ManDownUnder]

As luck would have it - this is what I do. If you have any questions on LAQC's or Tax/Accounting issues with investment property just ask me, happy to share what useful brain cells I have. Accountants anywhere charge the earth and I dont see the point in paying a lot as these are 9 times outta 10 pretty basic.

SWEET! - one in our very own ranks!

ONYA!

Rates/fees/specialist areas??

[Charlie]

SWEET! - one in our very own ranks!

ONYA!

Rates/fees/specialist areas??
Hey, no probs. Like I said I am happy to help where I can.
Big believer in sharing skills and dont like watching people pay heaps for simple stuff (ie setting up a company (LAQC), basic tax returns and investment property accounts). I dont have "rates" for stuff outside of work and do a few of these already but dont usually charge for it.... am more open to bribes, skill/trade swaps or a nice bottle of plonk! :blip:
Will consider anything bigger or more complicated as I have the free time (and as skills/experience allows).
If anyone wants to bleed my brain, send me a PM, I'll see what I can do...

[justsomeguy]

SWEET! - one in our very own ranks!

ONYA!

Rates/fees/specialist areas??

KB really rocks - it's sooo much more than just bikes now - it's become a complete community - Spank will go to heaven for this.


- am leaning towards the give money to olds idea - as the olds and I are both looking to buy houses - me 1st house, they 2nd house....

There's no way I can afford to buy my current home, but by combining incomes we may be able to buy a nicer (have one in mind) home for them.... hence my suggestion of me giving them the money and they in turn letting me live in my current place......

- When buying a new car to get a professional check you get a VTNZ/AA pre purchase check that costs about $90-120 for a bike you pay about $30-$60+.

What is the equivalent for a house and how much does it cost??

[Charlie]

- When buying a new car to get a professional check you get a VTNZ/AA pre purchase check that costs about $90-120 for a bike you pay about $30-$60+.

What is the equivalent for a house and how much does it cost??
Exciting - keep us posted!
Building inspection costs will vary depending on wher you live.
Definately get an inspection and report - that will pretty much cover everything and tell you where/what might need work, future work or require complete replacement (in Palmy this cost $250-300). Well worth it.

Also flag getting a LIM report. Or rather flag paying for it. Go to your local council and ask to see and photocopy the file on the property. Is the same as you'd get in the LIM but only costs you 30 min of your time. We did this and found out some good info (found the floor plan of our possible home was missing a whole room)!

Good luck!

[ManDownUnder]

KB really rocks - it's sooo much more than just bikes now - it's become a complete community - Spank will go to heaven for this.


- am leaning towards the give money to olds idea - as the olds and I are both looking to buy houses - me 1st house, they 2nd house....

There's no way I can afford to buy my current home, but by combining incomes we may be able to buy a nicer (have one in mind) home for them.... hence my suggestion of me giving them the money and they in turn letting me live in my current place......


Awesome.

The combined incomes (if paying off a house) will knock the SHIT out of the payment term (i.e. you'll pay it off over 7 or 8 years instead of the 25...ish that many seem to settle for) and the interest on that alone will be HUGE.

From there you may want to "springboard" up and away - borrow against the equity you've built up (even before it's all paid off) and find a nice little rental/do/up that you can get and have it earning you money as well... or maybe buy two or three or... you get the idea.

The ambitious bods end up buying 10 houses in 10 years. I'm a little more conservative than that simply because I don't like pushing the limits the Tax Dept has laid down on a number of issues... but I plan to retire with 15 or 20 houses.

FYI I'm on a good (nudging 6 figure) wage, we paid our first house off completely in 8 years, still own it, have sold it to a company we set up and used the money "from the company" to buy another, larger house for us to live it.

We're on our way and I'd love to see others doing it too.
MDU

[ManDownUnder]

Also flag getting a LIM report. Or rather flag paying for it. Go to your local council and ask to see and photocopy the file on the property. Is the same as you'd get in the LIM but only costs you 30 min of your time. We did this and found out some good info (found the floor plan of our possible home was missing a whole room)!

Good luck!

Good move re photocopying the stuff council has on file.

If they do NOT have interior plans on your house... KEEP IT THAT WAY. Any building/alterations etc can be done "under the radar" so if you know a wall out, move power switches around etc they'll never know.

If they do have plans - you should apply for a permit for any structural works (apparently... :whistle:), and the applications, approvals, and inspections all cost money. Find a good builder and a good sparkey and you'll be set. I can help with contacts of a good builder and plumber in Auckland. The sparky we use is a mate of ours and not sure he'd be too pleased about me flicking his details out and about.

MDU

[Groins_NZ]

We're looking at a property in UpperHutt and would like to get a LIM but after looking at the council's Web Site I'm not so keen now...

<B>Quoted from the Application Form:
"</B>
NOTE: The Application Fee of <B>$200.00</B> must accompany this application

...

LIM application forms are available from the Upper Hutt City Council office, or
they can be posted to you. Alternatively, you can make your application in
writing, or any other way providing you supply the correct information to
identify the property you require a LIM for. You should forward your
application, with the appropriate fee to the Council office. Please be sure that all
the information requested is included to enable us to return the memorandum
to you as quickly as possible.
<B>"</B>

I guess they wouldn't be too happy about doing any photocopying if it's worth that much to them?

[ManDownUnder]

We're looking at a property in UpperHutt and would like to get a LIM but after looking at the council's Web Site I'm not so keen now...

Quoted from the Application Form:
"
NOTE: The Application Fee of $200.00 must accompany this application

...

LIM application forms are available from the Upper Hutt City Council office, or
they can be posted to you. Alternatively, you can make your application in
writing, or any other way providing you supply the correct information to
identify the property you require a LIM for. You should forward your
application, with the appropriate fee to the Council office. Please be sure that all
the information requested is included to enable us to return the memorandum
to you as quickly as possible.
"

I guess they wouldn't be too happy about doing any photocopying if it's worth that much to them?

Ring and ask to see the "grab bag" on the property as you want to look through it yourself and save the $200 LIM fee - see what they say.

I've never had someone make you take the LIM (although it might be a good idea - as they might find stuff you miss)
MDU

[Charlie]

We're looking at a property in UpperHutt and would like to get a LIM but after looking at the council's Web Site I'm not so keen now...

I guess they wouldn't be too happy about doing any photocopying if it's worth that much to them?
Thats a pretty standard charge for a LIM - thats why I say save yourself the cost. They are not going to advertise you to come down a do it yourself for free are they!
Just pop down there, ask to view the property file on "number blaa, whatever street". If you see something handy, ask if they'd mind you photocopying it. Offer to pay 15c per page or something. I'm pretty sure they cant stop you checking the files.
To be fair this isnt EXACTLY what a LIM is but its the same place they'd get the info for it and same content. I've done this myself, as have many of my mates.

[Groins_NZ]

Thats a pretty standard charge for a LIM - thats why I say save yourself the cost. They are not going to advertise you to come down a do it yourself for free are they!
Just pop down there, ask to view the property file on "number blaa, whatever street". If you see something handy, ask if they'd mind you photocopying it. Offer to pay 15c per page or something. I'm pretty sure they cant stop you checking the files.
To be fair this isnt EXACTLY what a LIM is but its the same place they'd get the info for it and same content. I've done this myself, as have many of my mates.

Don't ya just love KB! Thanks Charlie.

[Charlie]

Don't ya just love KB! Thanks Charlie.
Sweet as - I'd be interested to know how you get on. GOOD LUCK for the house hunt/purchase!

[ManDownUnder]

Thats a pretty standard charge for a LIM - thats why I say save yourself the cost. They are not going to advertise you to come down a do it yourself for free are they!
Just pop down there, ask to view the property file on "number blaa, whatever street". If you see something handy, ask if they'd mind you photocopying it. Offer to pay 15c per page or something. I'm pretty sure they cant stop you checking the files.
To be fair this isnt EXACTLY what a LIM is but its the same place they'd get the info for it and same content. I've done this myself, as have many of my mates.

Only snag is the lendors sometimes lend based on the LIM being ok...

Hopefully that's not an issue here, but it might be
MDU

[Groins_NZ]

Well I ended up going into the Council and asked the lady at the counter whether I could look at any information they had on the property. She gave me a small form to fill in with my name and address, etc, went out back and returned with a rather large brown envelope. That was it, I was left to read all that I could and if I wanted anything photocopied it would cost me 20 cents a piece.

I think the $200 fee mentioned on the LIM request is to pay for somebody to go through all the information that I got handed and to make sense of it all while putting it into an official report (memorandum).

Anyway, the house in question was up for tender and we tendered our best which in the end was excepted! yaha yah :banana: Settlement/possession date is on the 28th of November although it could be extended because the vendor still has to be issued a code of compliance certificate for alterations they completed.

The code of compliance certificate was our only condition and we stated that we’d like it on or before the 21st November. Well the vendor signed the agreement so surely they must of read it? I think not, as now they our stressing that it isn’t enough time and final inspection is only on Monday the 21st and it will take the council 3 weeks to issue the certificate (three weeks!?). They have come back to us advising that we could move in as tenants on the possession date anyway and just pay them $150 rent.

Excuse me, but if you’d read the agreement and our one and only condition then you obviously wouldn’t have signed/agreed to it!

Anyway, still need to speak to our solicitor to find out what we can/can’t do from here. What fun!

[justsomeguy]

Well I ended up going into the Council and asked the lady at the counter whether I could look at any information they had on the property. She gave me a small form to fill in with my name and address, etc, went out back and returned with a rather large brown envelope. That was it, I was left to read all that I could and if I wanted anything photocopied it would cost me 20 cents a piece.

I think the $200 fee mentioned on the LIM request is to pay for somebody to go through all the information that I got handed and to make sense of it all while putting it into an official report (memorandum).

Anyway, the house in question was up for tender and we tendered our best which in the end was excepted! yaha yah :banana: Settlement/possession date is on the 28th of November although it could be extended because the vendor still has to be issued a code of compliance certificate for alterations they completed.

The code of compliance certificate was our only condition and we stated that we’d like it on or before the 21st November. Well the vendor signed the agreement so surely they must of read it? I think not, as now they our stressing that it isn’t enough time and final inspection is only on Monday the 21st and it will take the council 3 weeks to issue the certificate (three weeks!?). They have come back to us advising that we could move in as tenants on the possession date anyway and just pay them $150 rent.

Excuse me, but if you’d read the agreement and our one and only condition then you obviously wouldn’t have signed/agreed to it!

Anyway, still need to speak to our solicitor to find out what we can/can’t do from here. What fun!

CONGRATULATIONS:2thumbsup :rockon: :done: :clap:


I'm still a wee way away, but hey good on you for doing it - woohoooo - is this your first house??? :clap:

[ManDownUnder]

Settlement/possession date is on the 28th of November although it could be extended because the vendor still has to be issued a code of compliance certificate for alterations they completed.

The code of compliance certificate was our only condition and we stated that we’d like it on or before the 21st November. Well the vendor signed the agreement so surely they must of read it? I think not, as now they our stressing that it isn’t enough time and final inspection is only on Monday the 21st and it will take the council 3 weeks to issue the certificate (three weeks!?). They have come back to us advising that we could move in as tenants on the possession date anyway and just pay them $150 rent.

Excuse me, but if you’d read the agreement and our one and only condition then you obviously wouldn’t have signed/agreed to it!


Awesome news on the house - be careful becoming a landlord though. Tenancy Law requires you (as landlord) to give 6 weeks (or is it 12?) notice to get tenants out... make sure you're ok with that.

Also, the on or before the 21st thing. If it's not met does that mean the contract gets amended or canceled (voided). Tread carefully here. A lawyer will sure help.

My thought is to take possession of the help and have them ensure all works get completed to certification standards (it might mean they need to do some building while you are there, but it'll lock you into the purchase... making the certification of works "something for them to do" rather than "a condition of sale". As mentioned before (in this post) the sale might fall through because of that clause...

Good luck! Let us know how you get on... get your lawyer to lock the contract up re the certification of works, and onya :niceone: for the purchase!
MDU

[Groins_NZ]

CONGRATULATIONS:2thumbsup :rockon: :done: :clap:


I'm still a wee way away, but hey good on you for doing it - woohoooo - is this your first house??? :clap:

Thanks mate. First house we've owned and the first house we were interested in too so not much stress in loosing tenders, etc.

There was definitly one other party very interested as we saw them around at the house first and second times we visited. They also had other family and a builder with them checking out the place - they seemed quite confident it was theirs when overhearing what they were saying.

We only had the one condition as I said and stated two weeks for settlement date as we thought that might work in our favour... perhaps it did?

Hope you find what you're looking for soon so you can 're-hijack' your thread :)