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Has anyone done this/considered it

Has anyone done this/considered it

Old Aug 1st 2016, 11:01 pm
  #1  
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Default Has anyone done this/considered it

Hi,

I'm done with the housing market here in NZ/Auckland. My only dream in the last 10 years was to get on the property market here. Worked hard, saved hard, decided to do it in the last 2/3 years, realised I'm too late and it's not happening. Typical first home buyer story, can't save quick enough to keep up with the rising prices etc etc...

I spoke with my sister over in Scotland recently and she told me how much she got for a mortgage on a brand new development in Glasgow city centre. I almost died.

I don't know. Is it a good idea to consider buying something over there? Can it be done? Has it been done? What would I need to be aware of? She would effectively property manage for me and it would purely be an investment.

I could be a total doomster here too but I worry about my (at the very least diversified) money in savings accounts here. I worry that with what's happening in the housing market my money isn't safe here in NZ.

Thoughts?
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Old Aug 2nd 2016, 3:07 am
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Default Re: Has anyone done this/considered it

I think your money is in more danger from an Australian downturn than an NZ one. All the major banks here, except Kiwibank, are Australian owned. Still it wouldnt hurt to put some of your money in a UK bank for peace of mind. If both Oz and NZ property markets crash there could be problems ... but Im no expert.
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Old Aug 2nd 2016, 4:07 am
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Default Re: Has anyone done this/considered it

We probably need to see some numbers to really comment. There are apartments in Auckland that are well within the reach of first home buyers and you would save paying rent. Depends on what your long term plans are as well. Do you have much in savings that you have to worry? I think buying an apartment is a good idea, the benefit of buying it in Auckland is that you don't have to pay rent. Would the rent you get in Glasgow cover your mortgage? What if you can't find a tenant right away?
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Old Aug 2nd 2016, 6:46 am
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Default Re: Has anyone done this/considered it

why not buy a property in a different region to rent out at least that way you won't get hit with exchange rate problems.

do you have access to kiwi saver first time home owner money?

Also as you don't live in the UK you may have to look into whether you formally have to get a tenancy company in to run the property. You do here in NZ if you are not in the country for a certain amount of time and renting out a property you own.
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Old Aug 2nd 2016, 9:18 am
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Default Re: Has anyone done this/considered it

Or you could buy a holiday rental in an apartment complex somewhere here - I'd look at places just a little bit away from Auckland, like The Mount or Coromandel where you would have access yourself a few weeks of the year for holidays and they let it out the rest of the time.

Alternatively buy some old dunger out of town somewhere like Hamilton - get a builder in to do it up and then sell it on so that you can trade up.
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Old Aug 2nd 2016, 9:20 am
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Default Re: Has anyone done this/considered it

So do in Scotland exactly what is causing you so much grief here in NZ
"invest" in an overseas market, reduce housing availability for UK / Scottish
buyers, making it harder more expensive for them to buy

How hypocritical, how crass !!

Last edited by Justcol; Aug 2nd 2016 at 9:23 am.
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Old Aug 2nd 2016, 11:34 am
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Default Re: Has anyone done this/considered it

Be aware that as far as I know you would have to pay UK income tax on all the rental income with no tax free allowance, and you would also pay Capital Gains Tax on all the gains, again with no tax free allowance.

The tax rules for UK residents renting out property are far more benign than those for foreign investors hoping to benefit from the UK housing market.
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Old Aug 2nd 2016, 6:29 pm
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Default Re: Has anyone done this/considered it

I personally feel you need to get professional advice on this. Perhaps talk to a good financial advisor who specializes in what you wish to do. You need solid facts and figures on this, rather than opinions of people who are not professionals and don't know the market, risks, gains etc. That's in no way meant to offend anyone offering their thoughts on here, but it always pays to base your decision on sound financial advice especially when large amounts of money are concerned...
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Old Aug 2nd 2016, 6:55 pm
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Default Re: Has anyone done this/considered it

Getting a mortgage as a non-resident is likely not possible. Rules have been tightened considerably in the past eight years, and now even refinancing an existing property in the UK when you live overseas, can be extremely difficult.

It is not possible to obtain a mortgage loan from a bank outside the UK to buy a house in the UK because a foreign bank has no practical way to do the registry and title searches and register the mortgage

Last edited by Pulaski; Aug 2nd 2016 at 7:08 pm.
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Old Aug 2nd 2016, 7:07 pm
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Default Re: Has anyone done this/considered it

Originally Posted by Pom_Chch
I personally feel you need to get professional advice on this. Perhaps talk to a good financial advisor who specializes in what you wish to do. You need solid facts and figures on this, rather than opinions of people who are not professionals and don't know the market, risks, gains etc. That's in no way meant to offend anyone offering their thoughts on here, but it always pays to base your decision on sound financial advice especially when large amounts of money are concerned...
But how does one find a 'good' financial advisor. Any two will have different opinions, sometimes driven by their commissions and generally their investment track record over time is awful (unless you are talking Warren Buffett and he has his moments) :-)
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Old Aug 2nd 2016, 9:39 pm
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Default Re: Has anyone done this/considered it

Originally Posted by Justcol
So do in Scotland exactly what is causing you so much grief here in NZ
"invest" in an overseas market, reduce housing availability for UK / Scottish
buyers, making it harder more expensive for them to buy

How hypocritical, how crass !!
Hmmm ok, fair point, great, thanks.

Investing is hard here as I can't use my Kiwisaver and you need 40%. Rock, hard place.
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Old Aug 2nd 2016, 11:31 pm
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Default Re: Has anyone done this/considered it

My advice to people wanting to remain in Auckland at the moment is to buy an apartment. It gets you on the property ladder and paying off a mortgage rather than a landlord. In the event of an expected crash, in dollar terms, the damage will be less. Of course there is no damage if you don't have to sell. In time, the apartment can be used to move up the ladder either in NZ or overseas if you prefer. The first place I bought was a one-bed flat in a block. I now own a 3-bed with a garden and sea view mortgage free. It doesn't happen overnight but you have to take that first step.

If you buy an apartment and choose to move you can let it out to cover the mortgage. There are lots of options. Just don't make decision based on emotions. Also, a point to remember - check out the relationship property act. If you buy a place and live with your partner for three years you will have to give half to him if you split up. Might be another reason to pause on a purchase.
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Old Aug 3rd 2016, 1:01 am
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Default Re: Has anyone done this/considered it

Originally Posted by jmh
My advice to people wanting to remain in Auckland at the moment is to buy an apartment. It gets you on the property ladder and paying off a mortgage rather than a landlord. In the event of an expected crash, in dollar terms, the damage will be less. Of course there is no damage if you don't have to sell. In time, the apartment can be used to move up the ladder either in NZ or overseas if you prefer. The first place I bought was a one-bed flat in a block. I now own a 3-bed with a garden and sea view mortgage free. It doesn't happen overnight but you have to take that first step.

If you buy an apartment and choose to move you can let it out to cover the mortgage. There are lots of options. Just don't make decision based on emotions. Also, a point to remember - check out the relationship property act. If you buy a place and live with your partner for three years you will have to give half to him if you split up. Might be another reason to pause on a purchase.
Yes, I think this might be the way to go. Re. the relationship property side of things, there must be a way where I can legally protect myself going into the purchase?
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Old Aug 3rd 2016, 4:03 am
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Default Re: Has anyone done this/considered it

Originally Posted by Angeshirl
Yes, I think this might be the way to go. Re. the relationship property side of things, there must be a way where I can legally protect myself going into the purchase?
You both need to sign an opting out agreement. Details here;

"Relationship Property" or "Separate Property"

I know two women who had to give up half the property (one by selling the other by remortgaging). In one case he had moved in after she bought and contributed nothing to its upkeep or the bills. It's a serious risk.
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Old Aug 3rd 2016, 6:37 am
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Default Re: Has anyone done this/considered it

Originally Posted by Angeshirl
Hmmm ok, fair point, great, thanks.

Investing is hard here as I can't use my Kiwisaver and you need 40%. Rock, hard place.
5 years ago I stood in a street without a pot to piss in, so, rock, hard place, been there, done that
I now own my home, mortgage free, integrity intact, conscience clear. . . . it can be done
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