House - Rent or Buy

[Groins_NZ]

Hey thanks ManDownUnder - 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.

1. For a first home buyer what do you all feel are some criteria in deciding whether to rent or buy??
2. 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??
3. 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!
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... ), 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...

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?

[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!