Spiders, webs and dirt in close proximity - yuk! But, the pile fixings are all done, the zed nails are going in and the framing for the baseboards is albeit done.
The power is on, if even to only one power point. At least we don't have to lug the generator back and forth, and it's so much quieter.
New photos up on flicker show the baseboard framing, the new secondhand kitchen going in, the new deck out the back of the house complete and a preview of what the baseboards will look like. We've used 75 x 50 RAD H3 RS for the baseboard framing and the baseboards are 150 x 25 RAD H3 RS (radiata pine tanalised rough sawn).
The secondhand hot water cylinder has been fitted in to it's new purpose build cupboard. Behind which the new laundry has been stolen from the kitchen and will open in to the bathroom.
The back door leading to the new decking out the back, is undergoing repair. It's got a new sill and frame and has been rehung. The surrounding weatherboards still need to be fixed. Once this job is complete the rain will stop running in along the ceiling beam and that'll be the last drip stopped.
Tuesday, December 28, 2010
Sunday, December 12, 2010
One nail at a time - renovation progress slow
We're still working 7 days a week, so pretty exhausting. It's too much trying to keep up with our fulltime jobs and 6 year old daughter with her ballet shows and school trips and birthday parties - and write a blow by blow account of our progress. Basically, we're progressing very slowly. On top of that her grandfather is now terminal with cancer and some of the family and his housemates seem to be losing all their christian spirit pretty quick at the prospect of walking off with his share of the property... all adds to the stress and tiredness. As if that isn't enough, we've been given notice to move by the 15th January - real bad timing.
One break - we picked up a secondhand kitchen off Trademe for only $380 which includes the wall oven, electric hob, rangehood and dishwasher. Our draughtsman told us we didn't need to do a new kitchen, but this was cheaper than buying a new stove. The kitchen walls are finally being closed in and the new kitchen, with some trimming, is going to fit just fine.
The plumber, who we found on this great new site http://www.builderscrack.co.nz/ should be finished this week. Metrowater needs to install a meter box at the road and then hopefully we'll finally have water on.
The Council inspector wouldn't pass our electrics this week, so we may have to switch tasks and lay some concrete to get the power on. The cable outside the house is, apparently, not laid deep enough in the ground.
A mate is helping us out with scraping the exterior of the house getting it ready for painting.
An opening has been cut into the wall of the bathroom to form a laundry out of some of the old kitchen alcoves. That's all framed up. The nails and staples have been pulled out of the nice wooden flooring in the kitchen and we're 3 nails short of completing the pile fixings (which was a real work out on the abdomen - laying on your back under the house drilling and nailing!)
Goal is to be finished by mid-February - to do that, we'll be working right through the xmas/new year break. We're going to have christmas day off.
One break - we picked up a secondhand kitchen off Trademe for only $380 which includes the wall oven, electric hob, rangehood and dishwasher. Our draughtsman told us we didn't need to do a new kitchen, but this was cheaper than buying a new stove. The kitchen walls are finally being closed in and the new kitchen, with some trimming, is going to fit just fine.
The plumber, who we found on this great new site http://www.builderscrack.co.nz/ should be finished this week. Metrowater needs to install a meter box at the road and then hopefully we'll finally have water on.
The Council inspector wouldn't pass our electrics this week, so we may have to switch tasks and lay some concrete to get the power on. The cable outside the house is, apparently, not laid deep enough in the ground.
A mate is helping us out with scraping the exterior of the house getting it ready for painting.
An opening has been cut into the wall of the bathroom to form a laundry out of some of the old kitchen alcoves. That's all framed up. The nails and staples have been pulled out of the nice wooden flooring in the kitchen and we're 3 nails short of completing the pile fixings (which was a real work out on the abdomen - laying on your back under the house drilling and nailing!)
Goal is to be finished by mid-February - to do that, we'll be working right through the xmas/new year break. We're going to have christmas day off.
Sunday, October 31, 2010
Sunburn means lots of work done
Another productive weekend of fencing. Last weekend and after work during the weekend we completed the fencing down the drive. This weekend, we've pulled down the old fence across the back of the section and started erecting the new fence. We were both praising the benefits of earmuffs today - not just for saving our eardrums from the noise of the post hole borer. We can't wait to block out the screaming kids and the screaming adults who live out the back.
Here's some more pics of some fine fencing work in progress. One more day and we'll have the back fence and corner all done. Then it's on to trying to get the power on, which could take Vector at least 2 weeks or more. We're hoping for 2, it took us ages to find an electrician to help us out, given that we're running the cable ourselves.
Here's some more pics of some fine fencing work in progress. One more day and we'll have the back fence and corner all done. Then it's on to trying to get the power on, which could take Vector at least 2 weeks or more. We're hoping for 2, it took us ages to find an electrician to help us out, given that we're running the cable ourselves.
Monday, October 25, 2010
Working 7 days a week a blogger does not make
Been too flat out working or sleeping to post our progress on the house. It seems to be going so slowly and I now seriously doubt that we've done a wise thing. We still don't have power and water on.
The photos of our progress shows the drainage at least has now been laid, but we still haven't found a reasonably priced plumber to finish off the job.
The roof is done, ceilings are nearly all back up inside and half the insulation is in the roof. The insulation is under the floor; the pile fixings are half done.
The main bedroom is almost ready for plastering (if that's possible after our terrible wallpaper stripping job). Then the second bedroom can be decorated.
But first, we've got to find a plumber.
We weren't ready to do the fencing yet, but we got to the section on Saturday to find a broken pane of glass in the front door at the bottom of the door. Probably the kids at the back - they've almost completely destroyed the back fence. Time to fence the house in to try and protect it from further vandalism. Still, I feel grateful that it's lasted this long without more damage from vandals and snot-nosed-poorly-parented-kids.
The photos of our progress shows the drainage at least has now been laid, but we still haven't found a reasonably priced plumber to finish off the job.
The roof is done, ceilings are nearly all back up inside and half the insulation is in the roof. The insulation is under the floor; the pile fixings are half done.
The main bedroom is almost ready for plastering (if that's possible after our terrible wallpaper stripping job). Then the second bedroom can be decorated.
But first, we've got to find a plumber.
We weren't ready to do the fencing yet, but we got to the section on Saturday to find a broken pane of glass in the front door at the bottom of the door. Probably the kids at the back - they've almost completely destroyed the back fence. Time to fence the house in to try and protect it from further vandalism. Still, I feel grateful that it's lasted this long without more damage from vandals and snot-nosed-poorly-parented-kids.
Tuesday, August 31, 2010
Selling One House To Pay For The Other
We finally have an offer on our home. We've dropped in price, reasoning that we need the money to finish the build project. It frees up our capital to finish the relocatable and move on to the next project.
It's nail-biting time as we wait for the contract to go unconditional. If it goes through, we have just 15 days to find somewhere to go, pack and move.
Living in a Warehouse
We feel like we need a warehouse, or a very large space to store all our stuff. We've got fittings and decorations for the new house which we can't leave over there in case it gets stolen. We've got shop fit out for a planned business venture we might one day get off the ground. And, then there's us, the kitten and 3 goldfish.
A warehouse would enable us to play with some creative projects we just get to dream about: carving, building a container home (i.e. a home made out of renovated ship containers).
A big enough house, with the space we need will cost at least $470 per week to rent. To get huge space, we'll have to pay up to $670 (which we can't do).
None of the commercial spaces we've looked at have more than a tea room and toilet, and some carpeted office space.
We can't live in the relocatable, because there's still no power and water, plumping, ceilings or security. Neither will these things be in place by mid-September at the rate things are going.
But at least we may have finally sold our house, after 6 months on the market selling privately. Go us!
It's nail-biting time as we wait for the contract to go unconditional. If it goes through, we have just 15 days to find somewhere to go, pack and move.
Living in a Warehouse
We feel like we need a warehouse, or a very large space to store all our stuff. We've got fittings and decorations for the new house which we can't leave over there in case it gets stolen. We've got shop fit out for a planned business venture we might one day get off the ground. And, then there's us, the kitten and 3 goldfish.
A warehouse would enable us to play with some creative projects we just get to dream about: carving, building a container home (i.e. a home made out of renovated ship containers).
A big enough house, with the space we need will cost at least $470 per week to rent. To get huge space, we'll have to pay up to $670 (which we can't do).
None of the commercial spaces we've looked at have more than a tea room and toilet, and some carpeted office space.
We can't live in the relocatable, because there's still no power and water, plumping, ceilings or security. Neither will these things be in place by mid-September at the rate things are going.
But at least we may have finally sold our house, after 6 months on the market selling privately. Go us!
Delays, lies and miscommunication: Week 1
The house has been on the section for 3 weeks. The first week was taken up with the moving of the house from storage, getting it on to the section, pushing the two parts together and digging holes for the foundations. Before the concrete could be poured, the Council had to inspect. The housemovers claimed they'd booked the inspection, but on the day the inspection was needed, the Council wouldn't come. Two things: we hadn't paid the Council contribution; and, they had some other "tag" on the file indicating that they were awaiting an updated drawing.
The Council contribution had not been paid because the Council issued the building permit, despite that the 'contribution' was supposed to be paid first. They never issued an invoice or call to pay. So, we went on with the move and kept the money in the bank. Lesson: pay the Council at least a few working days before you need to book your first Council inspection.
So 3 things converged to delay the first inspection: 'contribution' hadn't been paid (our fault); an old tag was on the file that should have been removed (Council fault); and the housemovers left booking the inspection until the day they needed it to happen (housemover's fault). The housemovers claimed that they had already booked the inspection, which they couldn't have done. As soon as they informed us of the problem, we rushed in to Council with the cash, and two hours later had all the 'tags' removed from the permit, but by then it was too late to get on the inspection schedule for the next day. The housemovers by now had packed up and moved on to another job!
A really helpful, go-the-extra-mile clerk did manage to get our inspection squeezed in for the next day. But the housemovers didn't come back to pour the footings until Thursday. We were relieved they came back at all... they were now squeezing our incomplete job in between other moves. Meanwhile, we couldn't work on the house because it was still up in the air on jacks. Thursday afternoon the housemovers came back, the concrete was poured and the house was lowered on to it's piles. Friday the housemovers began rebuilding the roof.
A whole week had passed before we could get in and start work on the house.
The Council contribution had not been paid because the Council issued the building permit, despite that the 'contribution' was supposed to be paid first. They never issued an invoice or call to pay. So, we went on with the move and kept the money in the bank. Lesson: pay the Council at least a few working days before you need to book your first Council inspection.
So 3 things converged to delay the first inspection: 'contribution' hadn't been paid (our fault); an old tag was on the file that should have been removed (Council fault); and the housemovers left booking the inspection until the day they needed it to happen (housemover's fault). The housemovers claimed that they had already booked the inspection, which they couldn't have done. As soon as they informed us of the problem, we rushed in to Council with the cash, and two hours later had all the 'tags' removed from the permit, but by then it was too late to get on the inspection schedule for the next day. The housemovers by now had packed up and moved on to another job!
A really helpful, go-the-extra-mile clerk did manage to get our inspection squeezed in for the next day. But the housemovers didn't come back to pour the footings until Thursday. We were relieved they came back at all... they were now squeezing our incomplete job in between other moves. Meanwhile, we couldn't work on the house because it was still up in the air on jacks. Thursday afternoon the housemovers came back, the concrete was poured and the house was lowered on to it's piles. Friday the housemovers began rebuilding the roof.
A whole week had passed before we could get in and start work on the house.
Monday, August 9, 2010
Robert Kiyosaki explains the real estate crash
http://au.pfinance.yahoo.com/b/richricher/83/2010-the-best-of-times-or-the-worst
Land is getting cheaper... what are the people with money waiting for? Sure they can turn their pretend paper dollars in to solid silver or gold... but that'd be buying high.
Land is getting cheaper... what are the people with money waiting for? Sure they can turn their pretend paper dollars in to solid silver or gold... but that'd be buying high.
The House Moves On
In the deep of night the house finally moved from South Auckland to it's new home in Otahuhu. The pictures tell the story - http://www.flickr.com/photos/50089800@N06/sets/72157624686318004/
We're going off to get some rest. It's been an amazing 24 hours.
We're going off to get some rest. It's been an amazing 24 hours.
Tuesday, August 3, 2010
House move delayed
The house movers have put off moving the house until next Monday. Partly we sigh relief that we don't have all that hard work to do. But, hang on that's not right - we need to do the hard work as soon as we can. Every day is another day of liability not asset.
Sunday, August 1, 2010
Pegged and ready
The man at the refuse station has been very kind to us. Week after week we’ve taken our offering of dirt, weeds and litter, trailer load after trailer load. We took our last load of that today, despite the rain. It’s cost a lot and would have cost more if the tip man hadn’t made it a practice to discount our last load of the day.
The section is now ready for the house. We’ve pegged out the line for the right-hand side of the house to be lined up on. We removed the old wire fencing. We’ve got the people who own the rental properties and the back and in front on side. All’s good.
The house moves this coming Wednesday or Thursday night.
The section is now ready for the house. We’ve pegged out the line for the right-hand side of the house to be lined up on. We removed the old wire fencing. We’ve got the people who own the rental properties and the back and in front on side. All’s good.
The house moves this coming Wednesday or Thursday night.
Monday, July 12, 2010
Can we decorate solely using Trade Me bargains?
Since the shock of the Council contribution fee, we've been revisiting the budget. A call to the bank revealed that we were not eligible for a mortgage holiday. A call to the mortgage broker revealed that we couldn't borrow any more and we were not on the lowest interest rate possible. Our home mortgage had come off a fixed interest only contract and reverted to interest and principle. Somehow, the mortgage broker managed to get that changed to interest only for an extended period, so we could redirect as much cash as possible towards decorating the house.
Connecting the house to power, drainage and water and decorating will be minimised down to what ever we have to do to get the house up to Code. If we can complete the necessary work to get Code of Compliance, then we can get the surveyor back and apply for an up-to-date title. New title in hand we can refinance and breath easy again. There are hurdles and costs associated with getting the new title, but we just have to hope things will go smoothly. If we run out of money to complete the work, then we may have to try and get tenants in while we continue on with the improvements as our salaries allow.
In the meantime, we've been trawling through the building and renovation, closing soon auctions on Trade Me looking to pick up things we need for the house. We've got, for example, a rangehood for $1, not one but 2 matching letterboxes for $2, a stainless steel laundry tub for $20, washing machine taps for $21, a set of internal doors for $40, lampshades galore, curtain material, a house lot of venetian blinds and a fire surround. We didn't need the very large, if not over-sized supposedly kauri antique fire surround with mirror. But, it was only $34!
The drainage quotes are prohibitive and we'll have to dig the trench ourselves, if we can find a drainlayer willing to oversee our work.
The permit has finally been approved - which is a milestone. The designer had to redo the drawings twice before the Council was happy. The house now sits 6 metres off the back fence and the front yard will be parking. Just as well it wasn't our dream home or even a place we were going to move in to - helps with not caring when the powers-that-be just decide things will be different from what you wanted.
So, it's on to moving the house.
Connecting the house to power, drainage and water and decorating will be minimised down to what ever we have to do to get the house up to Code. If we can complete the necessary work to get Code of Compliance, then we can get the surveyor back and apply for an up-to-date title. New title in hand we can refinance and breath easy again. There are hurdles and costs associated with getting the new title, but we just have to hope things will go smoothly. If we run out of money to complete the work, then we may have to try and get tenants in while we continue on with the improvements as our salaries allow.
In the meantime, we've been trawling through the building and renovation, closing soon auctions on Trade Me looking to pick up things we need for the house. We've got, for example, a rangehood for $1, not one but 2 matching letterboxes for $2, a stainless steel laundry tub for $20, washing machine taps for $21, a set of internal doors for $40, lampshades galore, curtain material, a house lot of venetian blinds and a fire surround. We didn't need the very large, if not over-sized supposedly kauri antique fire surround with mirror. But, it was only $34!
The drainage quotes are prohibitive and we'll have to dig the trench ourselves, if we can find a drainlayer willing to oversee our work.
The permit has finally been approved - which is a milestone. The designer had to redo the drawings twice before the Council was happy. The house now sits 6 metres off the back fence and the front yard will be parking. Just as well it wasn't our dream home or even a place we were going to move in to - helps with not caring when the powers-that-be just decide things will be different from what you wanted.
So, it's on to moving the house.
Sunday, June 20, 2010
Housing shortage for Auckland predicted
Real Estate Institute of NZ president Peter McDonald is reported to have said that in the main centres "there's a lot of growth. With [high] net migration, there's going to be a definite shortage of homes at some stage because we aren't building enough," The full article in the Sunday Star Times today reports on section sale prices dipping, but not in Auckland.
Further to our previous article - is it any wonder we're not building enough new homes when the Auckland City Council taxes each new dwelling project $25,000-$30,000? Actually, many Councils are taking what they think they can get away with. A Local Government Forum is complaining calling the contributions a "rort". But their article mainly refers to big developers. What about us? We wanted to purchase a rental property as a way of saving for our retirement. Well who wants to leave their well-earned savings in a badly-managed fund that charges fees that almost wipe any gain off? Let alone that some investment companies are not the safest place to have your savings at the moment. As for leaving it in a bank - similarly, the fees, minute amount of interest earned and taxes means your money is almost going backwards there. Land, like gold, is a finite resource and the REINZ forewarn we're going to have a shortage of housing in Auckland. Surely we can't lose if we buy or build homes to rent out?
We're wondering if we should have just bought an existing dwelling. But, that doesn't increase the number of dwellings available. Our longer term plan is to develop decent (stylish, eco-features) lower cost housing to support Kiwi home ownership at entry level (in the lower price bracket). We can understand the resentment towards the large developers and we can empathise with public support for wanting to sting them with these huge contributions - they build 'little boxes on the hillside, little boxes made of ticky-tacky' (as my father used to sing). Their developments are ugly, lacking in style and character; they shove heaps of people in to a small area - it's gross. So, yes. Let's stop them. (For instance - look at Stonefields - how tragic is that, but Dannemora, Botany, Albany - huge swathes of once-beautiful farm land is now covered in desert-coloured, tree-denuded beige-on-beige-boring sleeping boxes.)
We're not Fletchers! We can't negotiate our way out of paying the contribution.
Further to our previous article - is it any wonder we're not building enough new homes when the Auckland City Council taxes each new dwelling project $25,000-$30,000? Actually, many Councils are taking what they think they can get away with. A Local Government Forum is complaining calling the contributions a "rort". But their article mainly refers to big developers. What about us? We wanted to purchase a rental property as a way of saving for our retirement. Well who wants to leave their well-earned savings in a badly-managed fund that charges fees that almost wipe any gain off? Let alone that some investment companies are not the safest place to have your savings at the moment. As for leaving it in a bank - similarly, the fees, minute amount of interest earned and taxes means your money is almost going backwards there. Land, like gold, is a finite resource and the REINZ forewarn we're going to have a shortage of housing in Auckland. Surely we can't lose if we buy or build homes to rent out?
We're wondering if we should have just bought an existing dwelling. But, that doesn't increase the number of dwellings available. Our longer term plan is to develop decent (stylish, eco-features) lower cost housing to support Kiwi home ownership at entry level (in the lower price bracket). We can understand the resentment towards the large developers and we can empathise with public support for wanting to sting them with these huge contributions - they build 'little boxes on the hillside, little boxes made of ticky-tacky' (as my father used to sing). Their developments are ugly, lacking in style and character; they shove heaps of people in to a small area - it's gross. So, yes. Let's stop them. (For instance - look at Stonefields - how tragic is that, but Dannemora, Botany, Albany - huge swathes of once-beautiful farm land is now covered in desert-coloured, tree-denuded beige-on-beige-boring sleeping boxes.)
We're not Fletchers! We can't negotiate our way out of paying the contribution.
Friday, June 18, 2010
Council Contribution Crashes Project Hopes of Building Cheaper Than Buying
The hidden costs that jump out at the naive developer to rip a chunk out of their arse have got us. We've just been dealt a nasty blow. Yadda yadda ignorance is no excuse blah de blah, but heay this is a new policy and okay, we didn't know about it. The Auckland City Council "in accordance with Auckland City's adopted 2009 development contributions policy" is charging us $23,785.63 towards: the Council's fund to buy parks and reserves, create walks, playgrounds and develop open spaces, develop libraries, swimming pools, community centres, and to help pay for the upgrade of the city wide stormwater system. In addition, we're to pay towards improving citywide roading, creating cycle and bus lanes. So, isn't that why we pay rates? Isn't this basically a land tax?
What felt really unfair about it, is that a proportion of the calculation is worked out on the full size of the section including the neighbours front half. Because it's a cross-lease section it's treated as one title. The clerk at the Council thinks we got off lightly - the usual contribution per new dwelling is $25,000 - 30,000. Our contribution is below average because of the smaller size and value of the project. We have to pay this - there is no appeal and no way around it. If we want to pick up our building consent, this must be paid.
We hadn't budgeted this in and it's way beyond a vague amount we had as a contingency fund. When we add this on to the cost of the land and house, because it is effectively a development tax, we're up to $199,000. We still have to pay for connections and fixing up the house once on site, fencing, paving, insulation, base boards, landscaping and on and on and on. There goes the new (2nd hand) kitchen we were going to put in.
So, it's off to the bank we go for a 3 month mortgage holiday on our home and the section.
What felt really unfair about it, is that a proportion of the calculation is worked out on the full size of the section including the neighbours front half. Because it's a cross-lease section it's treated as one title. The clerk at the Council thinks we got off lightly - the usual contribution per new dwelling is $25,000 - 30,000. Our contribution is below average because of the smaller size and value of the project. We have to pay this - there is no appeal and no way around it. If we want to pick up our building consent, this must be paid.
We hadn't budgeted this in and it's way beyond a vague amount we had as a contingency fund. When we add this on to the cost of the land and house, because it is effectively a development tax, we're up to $199,000. We still have to pay for connections and fixing up the house once on site, fencing, paving, insulation, base boards, landscaping and on and on and on. There goes the new (2nd hand) kitchen we were going to put in.
So, it's off to the bank we go for a 3 month mortgage holiday on our home and the section.
Digging in the wet and cold
We've been having fun with a digger. Got a small Bobcat and have been scraping the vegetation off the house site, digging up tree stumps and ripping out old fencing. New photos at Flickr. We bought a generator 2nd hand off Trade Me to enable us to use power tools on site and at the house prior to power getting connected. We removed all the vegetation hanging over the back fence: choko vines, long grass and other weedy vines. The fence is nearly falling over now. Had to take out a noxious tree also: kerosene plant. There was an old wire fence running along the back and once the vegetation was clipped away we pulled that out. Looks tidier.
Hired a tipping trailer which was a bit of fun. We used the digger to load concrete, dirt and rubble on to the trailer and then I (the girl) heads off to the rubbish dumb, backs up the trailer and I pull the pins and thump the trailer tips clunk to the ground. A bit of dirt fell off the back but the bulk of the concrete, rubble and mud just sat there. Hmmm... so it was a bit of hard labour with the rake, then easing the ute forward, then pull more dirt and grass and rubble off the back, then ease the ute forward again... at least that was under cover. We've both had bad lingering head colds all week from working 2 days out in the cold, intermittently getting wet.
Both of us did the following 2 loads. Pst don't tell the Trailer Hire people - we got a tonne on the last load, oops (the trailer's only rated for 500kg). Each 400kg of rubbish costs $55.00 so it cost a few hundred dollars plus a couple of hundred for the digger and there's still a truck load sitting at the section waiting for another weekend. At least the site is now ready for the house to be moved on.
Hired a tipping trailer which was a bit of fun. We used the digger to load concrete, dirt and rubble on to the trailer and then I (the girl) heads off to the rubbish dumb, backs up the trailer and I pull the pins and thump the trailer tips clunk to the ground. A bit of dirt fell off the back but the bulk of the concrete, rubble and mud just sat there. Hmmm... so it was a bit of hard labour with the rake, then easing the ute forward, then pull more dirt and grass and rubble off the back, then ease the ute forward again... at least that was under cover. We've both had bad lingering head colds all week from working 2 days out in the cold, intermittently getting wet.
Both of us did the following 2 loads. Pst don't tell the Trailer Hire people - we got a tonne on the last load, oops (the trailer's only rated for 500kg). Each 400kg of rubbish costs $55.00 so it cost a few hundred dollars plus a couple of hundred for the digger and there's still a truck load sitting at the section waiting for another weekend. At least the site is now ready for the house to be moved on.
Saturday, May 29, 2010
Drainage: Getting permission from neighbours
Things have slowed down a bit. We went with the designer recommended to us by the housemovers. He has been good value. He's drawn up the site plan and renovation to the house to insert a laundry. There has been just one hiccup that delayed getting the application in to Council - the drainage plan.
There are public drains just 3 metres from where the house will be, but they are in the neighbours nice new concrete driveway. We had to get him to sign approval on to the drainage plan but he's playing catch-me-if-you-can. So to Plan B: we had to draw up a new drainage plan showing us going to the road. This will cost a lot more. We still have to try and get the neighbour to let us in to his driveway - and we'll have to do this by showing him that this option will be better for him and his tenants. Because, if we have to go to the road, we might have to dig across his entrance which might disrupt his tenants. Also, that disc at the entrance to his driveway but in line with our fenceline better not be a marker indicating that his electrics run under our fenceline - oh dear... that will be a big problem for him if he has to dig them up and move them... you get the picture.
Yes, the designer has been real good value - we wouldn't have thought of all these options ourselves.
So, the application for a building consent is in to Council. They claim a 20 working day turn around, excepting any queries (in which case they stop the clock). We are on track to have consent within the 10 weeks free storage of the house in the housemovers yard.
There's been a lot of rain over the last 2 weeks. Today we went out to the house to mend the roof with our Trade Me bought 2nd hand tiles. Unfortunately the hole over the bathroom is missing a baton so we had to use the corflute for sale sign from the section to catch the rain and head it off. The corflute signs were to patch up the broken window in the main bedroom.
With the garage off the section and the rubbish gone, the next fun thing is to get a digger, mark out the profiles for where the house is going to be, and clear the vegetation off; and, dig out some tree stumps and the concrete from an old shed.
There are public drains just 3 metres from where the house will be, but they are in the neighbours nice new concrete driveway. We had to get him to sign approval on to the drainage plan but he's playing catch-me-if-you-can. So to Plan B: we had to draw up a new drainage plan showing us going to the road. This will cost a lot more. We still have to try and get the neighbour to let us in to his driveway - and we'll have to do this by showing him that this option will be better for him and his tenants. Because, if we have to go to the road, we might have to dig across his entrance which might disrupt his tenants. Also, that disc at the entrance to his driveway but in line with our fenceline better not be a marker indicating that his electrics run under our fenceline - oh dear... that will be a big problem for him if he has to dig them up and move them... you get the picture.
Yes, the designer has been real good value - we wouldn't have thought of all these options ourselves.
So, the application for a building consent is in to Council. They claim a 20 working day turn around, excepting any queries (in which case they stop the clock). We are on track to have consent within the 10 weeks free storage of the house in the housemovers yard.
There's been a lot of rain over the last 2 weeks. Today we went out to the house to mend the roof with our Trade Me bought 2nd hand tiles. Unfortunately the hole over the bathroom is missing a baton so we had to use the corflute for sale sign from the section to catch the rain and head it off. The corflute signs were to patch up the broken window in the main bedroom.
With the garage off the section and the rubbish gone, the next fun thing is to get a digger, mark out the profiles for where the house is going to be, and clear the vegetation off; and, dig out some tree stumps and the concrete from an old shed.
Tuesday, May 18, 2010
New Zealand Architectural Awards 2010
We attended the New Zealand Architectural Awards Gala dinner on Friday night. It was a night to 'visit your dreams' or at least dream of being rich enough one day to live in an unusual and startling home. We'd never attended one of these events before and neither of us are architects - we expected only that people would be dressed up as required by the 'black tie' instruction on the invitation and that they'd show pictures of the winning buildings.
The event was held in the Auckland Museum. There was free booze, a really nice three course meal and lots of awards to be given out. The surprising element (and most welcome for us) was the unexpected amount of Maori content: Frankie Stevens was the MC and he injected Maori protocol, language and humour throughout the night; there were also several Maori recipients of awards and some Maori clients whose buildings were winners, such as the Mantell's Wanaka Lodge. Deidre Brown won an honorary award for her book on Maori Architecture and it was great to see her again.
The New Zealand Architecture Medal went to Ironbank which we could only concur with.
So inspired were we, we've started designing our own eco-friendly, cheap-as, container home to be built on the next cheapest piece of land we can find bordering an industrial area, and perhaps overlooking the Manukau Harbour.
The event was held in the Auckland Museum. There was free booze, a really nice three course meal and lots of awards to be given out. The surprising element (and most welcome for us) was the unexpected amount of Maori content: Frankie Stevens was the MC and he injected Maori protocol, language and humour throughout the night; there were also several Maori recipients of awards and some Maori clients whose buildings were winners, such as the Mantell's Wanaka Lodge. Deidre Brown won an honorary award for her book on Maori Architecture and it was great to see her again.
The New Zealand Architecture Medal went to Ironbank which we could only concur with.
So inspired were we, we've started designing our own eco-friendly, cheap-as, container home to be built on the next cheapest piece of land we can find bordering an industrial area, and perhaps overlooking the Manukau Harbour.
Monday, May 17, 2010
Garage Gets Taken Away
The draughtsman has the building consent application to council underway and the garage is being dismantled.
The house movers rang and left a message - just wanting to catch up, see if things are on track. No doubt wanting to discuss the 2nd installment due within 14 days of signing of the contract.
The rubbish pile is dwindling, and the new tenants in the front house don't seem to be living there yet.
Progress photos are here.
The house movers rang and left a message - just wanting to catch up, see if things are on track. No doubt wanting to discuss the 2nd installment due within 14 days of signing of the contract.
The rubbish pile is dwindling, and the new tenants in the front house don't seem to be living there yet.
Progress photos are here.
Sunday, May 16, 2010
The Hard Labour Begins
This weekend we started clearing the rubbish from the section: one van load on Saturday and one van load on Sunday ($55 ea). There's 1-2 loads to go. We also bought 100 secondhand roof tiles and went and picked those up (from way over West). They need cleaning with bleach and water and a scrubbing brush (water blaster would be quicker).
The garage sold - unbelievably for $171.00. They come to dismantle it and take it away tomorrow. Excellent to be able to trade so easily via Trade Me - this will help offset the rubbish fees.
The draughtsman is looking at the house tomorrow and then coming to look at the section and pick up our plans which we've drawn up on SketchUp which is free to download 3D Modelling software.
The surveyor is booked to confirm the boundaries some time early this week also.
Progress photos to follow.
Being Neighbourly
Some new tenants were moving in to the house in front, when we arrived at the section on Saturday. Don't know what happened to the Indian couple that were there for only 1-2 weeks? When we said we were taking away the rubbish they shot in to the garage to look through what was there. We said, take whatever and pointed out the good stuff (plates, some lengths of fabric, some kitchen stuff which we'd set aside to put out for free removal). Sadly, they asked for the couch and double bed mattress and base which were dry, but who knows how long they've been in the open-air garage? I'm covered in flea bites from working in the garage the weekend before - I hate the thought of anyone sleeping on that bed. Am searching on Trade Me for a better bed for them. But, would they be offended if we went back with a slightly better crap bed and said give us that other horrible one and we'll dump it? Maybe they won't want to give it up because they still don't have enough beds?
The garage sold - unbelievably for $171.00. They come to dismantle it and take it away tomorrow. Excellent to be able to trade so easily via Trade Me - this will help offset the rubbish fees.
The draughtsman is looking at the house tomorrow and then coming to look at the section and pick up our plans which we've drawn up on SketchUp which is free to download 3D Modelling software.
The surveyor is booked to confirm the boundaries some time early this week also.
Progress photos to follow.
Being Neighbourly
Some new tenants were moving in to the house in front, when we arrived at the section on Saturday. Don't know what happened to the Indian couple that were there for only 1-2 weeks? When we said we were taking away the rubbish they shot in to the garage to look through what was there. We said, take whatever and pointed out the good stuff (plates, some lengths of fabric, some kitchen stuff which we'd set aside to put out for free removal). Sadly, they asked for the couch and double bed mattress and base which were dry, but who knows how long they've been in the open-air garage? I'm covered in flea bites from working in the garage the weekend before - I hate the thought of anyone sleeping on that bed. Am searching on Trade Me for a better bed for them. But, would they be offended if we went back with a slightly better crap bed and said give us that other horrible one and we'll dump it? Maybe they won't want to give it up because they still don't have enough beds?
Tuesday, May 11, 2010
Before and After Pics
Now that we own the section and the house - we can show you the before pics. Be afraid. Be very afraid.
The garage is for sale for removal on Trade Me and on the weekend we bought a weed eater and laid in to the overgrown grass and weeds. Lots more rubbish was found and one small citrus tree (the gold beneath the rubble).
The garage is for sale for removal on Trade Me and on the weekend we bought a weed eater and laid in to the overgrown grass and weeds. Lots more rubbish was found and one small citrus tree (the gold beneath the rubble).
Settlement Day
In the run up to settlement day, we had to:
LAQC's are good for new start-ups and for owning a couple of rental properties, where the directors (us) typically have to outlay a lot of capital to get the business happening. Capital which isn't going to be tax deductable. There may also not be a positive return straight off and for the first few years the business will probably run at a loss. An LAQC provides for that loss to be carried through to the directors' individual tax returns.
Next week the government announces it's 2010 Budget which will clarify what changes are going to be made to dampen the amount of loss directors' of LAQC's have thus far been able to write-off against their personal incomes.
Settlement Day came and the section is ours! The house movers rang wanting to know what time we'd be out with their cheque, adding that they'd had another enquiry about the house... [what a crap sales technique that is: threatening potential buyer with loss of purchase duh!] Suppose they'll conclude that it worked, because we got out there before they closed and signed up for the house. Well it'd be a bit useless to have the section and not the house wouldn't it?
We have 10 weeks to get the building consent, after which time the house movers start charging us $100 per week storage! Better get a move on.
- See the neighbour at the back about getting access down his drive to move the house on (TBC)
- Check with the Accountant about what sort of structure to purchase the house under
- Register a new company name
- Register the new company
- Apply to Inland Revenue (the tax department) for LAQC status
- Cash up the never-grew-over-10-years-superannuation
- Get to the bank to set up a new account and sign the loan documents
- Get to the solicitor to sign Company resolution and shareholder documents, the same bank loan documents again and arrange for the rest of the cash to be debited from our cheque account
- Put the house movers off til settlement day (they were chasing for the contract to be signed)
LAQC's are good for new start-ups and for owning a couple of rental properties, where the directors (us) typically have to outlay a lot of capital to get the business happening. Capital which isn't going to be tax deductable. There may also not be a positive return straight off and for the first few years the business will probably run at a loss. An LAQC provides for that loss to be carried through to the directors' individual tax returns.
Next week the government announces it's 2010 Budget which will clarify what changes are going to be made to dampen the amount of loss directors' of LAQC's have thus far been able to write-off against their personal incomes.
Settlement Day came and the section is ours! The house movers rang wanting to know what time we'd be out with their cheque, adding that they'd had another enquiry about the house... [what a crap sales technique that is: threatening potential buyer with loss of purchase duh!] Suppose they'll conclude that it worked, because we got out there before they closed and signed up for the house. Well it'd be a bit useless to have the section and not the house wouldn't it?
We have 10 weeks to get the building consent, after which time the house movers start charging us $100 per week storage! Better get a move on.
Sunday, May 2, 2010
Empty Section A Dump
Why do people think an empty section is a free garbage tip? The amount of rubbish dumped on the section we just bought tripled in a week.
There was a fair amount inside the garage, but since new tenants moved in to the house in front, the rubbish inside the garage is now overflowing!
We were about to advertise the garage for removal on Trade Me for $1. But, decided we better check with the lawyer first, because technically the garage doesn't exist. If it doesn't exist, who owns it? The garage sits across the boundary between the front and back halves of the cross-lease section. Some of the garage sits on shared area. The tenants in the house in front have clearly over the years used the garage. The vendor was going to remove it, until we bargained and took that job on ourselves. Hmm... a murky area.
Meanwhile, we suppose even more rubbish will pile up.
Sunday, April 25, 2010
Government changes to the way Property Investment is taxed
The Government's threatened changes to the way residential property investment is taxed has scared off buyers. We put our house on the market in February (nearly 3 months ago). The main lookers have been DINKs (double-income-no-kids) couples looking for a house for themselves, or parents looking on behalf of their grown children. The market has since had a flood of properties come on, less buyers out looking and a very real rise in mortgagee sales. So just what is it the Government are planning to do that has scared people off investing in residential property?
Here's an excerpt from the National Party's www:
"we will not be developing any proposals for a land tax, a comprehensive capital gains tax, or a risk-free return method (RFRM) for taxing residential investment properties. These decisions were taken after detailed consideration of the pros and cons.
Since there is only a certain amount of land, and it can't be moved overseas, a land tax appeals to economists as an efficient way to raise revenue. However, a land tax is effectively a lump-sum tax on people who own land at the time the tax is introduced, would only fall on people who hold their wealth in one particular form, and would create cash flow problems for many landowners, especially those with lower incomes.
An RFRM is another tax that, while having some conceptual appeal, would also create cash flow problems for taxpayers. A property owner could have a very sizeable tax bill each year under an RFRM, but little or no ability to pay it, except by putting up rents.
A comprehensive capital gains tax extends the tax net and is highly progressive. However in the Government's view it would make the tax system more complex to administer and comply with, and may encourage taxpayers to hold on to assets longer simply to avoid tax.
These new taxes are therefore off the table.
However the Government does believe there is a gap in the current tax system around property investments where income is being derived but, in aggregate, no tax is being paid - in fact the Government is actually losing revenue in this sector. We will therefore be making changes to the way property is taxed, which will result in increased Government revenue and more fairness for taxpayers. These changes will be announced in the Budget.
The Government is also carefully considering a modest increase in the rate of GST, to no more than 15 percent."
So the capital gains tax is not going to happen, the land tax is not going to happen, but something is going to happen. It is this uncertainty that is keeping buyers at bay. (There's lots of sharks about though - people with cash who can swoop in and pick up bargains as some vendors get more and more desparate to sell).
The way that depreciation on a rental property is worked out is likely to change.
The May 2010 Budget also promises to deliver an income tax cut across the board, but particularly for higher income earners. Including the ACC Levy income earned over $70,001 is now taxed at a whopping 40 cents in the dollar! This is the new post 1 April 2010 personal income tax breakdown:
Up to $14,000 = 14.5 cents per $1
14,001 - 48,000 = 23 cents per $1
48,001 - 70,000 = 35 cents per $1
70,001 + = 40 cents per $1
This isn't as high as Germany, but in New Zealand is it fair? Companies are taxed at 33c in the $1 and they get to write off the expenses incurred to earn that $1. Money invested in mutual funds and some overseas share funds etc is taxed at 30 cents in the $1.
Goods and Services Tax is going to go up from 12 cents to 15 cents. Prime Minister Key, on his Party's www, says people will have more take home cash, and it will be their choice to save it, or pay off their mortgage and thus not incur GST on it, or they can consume. Lower income earners will pay proportionately more GST because they have to use more of their income to live, that is, they have to 'consume'. Businesses and sole traders registered for GST get to claim at least some of it back.
As a vendor trying to sell in this stagnent property market, we just want the uncertainty cleared up so people can get on with making their investment decisions. It's fair enough that they have to wait - you can not calculate potential cashflow in this environment.
Here's an excerpt from the National Party's www:
"we will not be developing any proposals for a land tax, a comprehensive capital gains tax, or a risk-free return method (RFRM) for taxing residential investment properties. These decisions were taken after detailed consideration of the pros and cons.
Since there is only a certain amount of land, and it can't be moved overseas, a land tax appeals to economists as an efficient way to raise revenue. However, a land tax is effectively a lump-sum tax on people who own land at the time the tax is introduced, would only fall on people who hold their wealth in one particular form, and would create cash flow problems for many landowners, especially those with lower incomes.
An RFRM is another tax that, while having some conceptual appeal, would also create cash flow problems for taxpayers. A property owner could have a very sizeable tax bill each year under an RFRM, but little or no ability to pay it, except by putting up rents.
A comprehensive capital gains tax extends the tax net and is highly progressive. However in the Government's view it would make the tax system more complex to administer and comply with, and may encourage taxpayers to hold on to assets longer simply to avoid tax.
These new taxes are therefore off the table.
However the Government does believe there is a gap in the current tax system around property investments where income is being derived but, in aggregate, no tax is being paid - in fact the Government is actually losing revenue in this sector. We will therefore be making changes to the way property is taxed, which will result in increased Government revenue and more fairness for taxpayers. These changes will be announced in the Budget.
The Government is also carefully considering a modest increase in the rate of GST, to no more than 15 percent."
So the capital gains tax is not going to happen, the land tax is not going to happen, but something is going to happen. It is this uncertainty that is keeping buyers at bay. (There's lots of sharks about though - people with cash who can swoop in and pick up bargains as some vendors get more and more desparate to sell).
The way that depreciation on a rental property is worked out is likely to change.
The May 2010 Budget also promises to deliver an income tax cut across the board, but particularly for higher income earners. Including the ACC Levy income earned over $70,001 is now taxed at a whopping 40 cents in the dollar! This is the new post 1 April 2010 personal income tax breakdown:
Up to $14,000 = 14.5 cents per $1
14,001 - 48,000 = 23 cents per $1
48,001 - 70,000 = 35 cents per $1
70,001 + = 40 cents per $1
This isn't as high as Germany, but in New Zealand is it fair? Companies are taxed at 33c in the $1 and they get to write off the expenses incurred to earn that $1. Money invested in mutual funds and some overseas share funds etc is taxed at 30 cents in the $1.
Goods and Services Tax is going to go up from 12 cents to 15 cents. Prime Minister Key, on his Party's www, says people will have more take home cash, and it will be their choice to save it, or pay off their mortgage and thus not incur GST on it, or they can consume. Lower income earners will pay proportionately more GST because they have to use more of their income to live, that is, they have to 'consume'. Businesses and sole traders registered for GST get to claim at least some of it back.
As a vendor trying to sell in this stagnent property market, we just want the uncertainty cleared up so people can get on with making their investment decisions. It's fair enough that they have to wait - you can not calculate potential cashflow in this environment.
Saturday, April 24, 2010
A Boat for a Beautiful House: Would you swap?
This beautiful house is on the market at $350,000. It's in Paeroa, of Lemon and Paeroa, the drink. Would you swap it for cash and this launch asking price $150,000:
I think not.
Thursday, April 22, 2010
Paying The Deposit - Now The Land Is Ours, Nearly
Real estate agents would have you believe you have to pay the deposit upon signing of the Sale and Purchase agreement. There's no point doing that unless both parties are signing and even then this is a negotiable. The agents of course want to get the deposit, because they're the first ones who will get paid out of it. The deposit goes in to their Trust Account and should be held there until the deal goes unconditional. Once it goes unconditional, the Real Estate Agency deducts its commission or part thereof.
When selling privately, the cheque can be paid to the vendors solicitor and held in their Trust Account. In a previous sale, I remember my solicitor paying over the deposit to me once the deal went unconditional. She took her fees out at settlement.
On this current deal, our solicitor advised not paying the deposit. There were many risks she needed to point out to us first. We paid the deposit today. It feels like the section is ours but we don't go unconditional until tomorrow and we're still waiting for confirmation of finance.
There's been lots of lessons already on this project. We rushed it. We didn't do our research properly before making an offer (e.g. we didn't look at the sales history on the property). We didn't allow enough time between signing and going unconditional to complete due diligence. Our solicitor really wants us to meet the other cross-lease owners to see if they're going to be supportive or not. It would also have been useful to meet the neighbours at the back, whose driveway we need to come down with the relocatable house.
We're going to go with the ex-Castor Bay house, the one for $30,000. The house mover checked out the section today and confirmed he can get the house on there no problems. Next step is to pay the deposit and get the Auckland City Council out to inspect the house. Our solicitor wants to check out the contract first though. It was a relief to find out the house removal company does insure the house until it is in our possession, and whilst they want the final installment paid before delivery, it's held in their solicitor's Trust Account and refunded if they drop the house and wreck it.
More learnings around land titles: The title at the moment is a "residue" title. Once we've got Code of Compliance on the new house, we have to have the property resurveyed and a new flats plan drawn up, and new title documents. These Title documents have to go to the other cross-lease owners for signing. This is when we incur and have to pay their lawyers' fees. Whilst, the Council may still grant a reasonable building consent even when the other cross-lease owner might have opposed it; things can come unstuck at the new Title stage. An opposing cross-lease partner could at this point withhold agreement, forcing costly legal action. And, we'll need that new title to refinance over the land with house. Without it a mortgage is only secured over the land only. Oops!
So, we move in to tighter budgetry conditions from tomorrow as uncertain weather on the horizon threatens to wash away all that lovely capital gain we thought we'd secured.
When selling privately, the cheque can be paid to the vendors solicitor and held in their Trust Account. In a previous sale, I remember my solicitor paying over the deposit to me once the deal went unconditional. She took her fees out at settlement.
On this current deal, our solicitor advised not paying the deposit. There were many risks she needed to point out to us first. We paid the deposit today. It feels like the section is ours but we don't go unconditional until tomorrow and we're still waiting for confirmation of finance.
There's been lots of lessons already on this project. We rushed it. We didn't do our research properly before making an offer (e.g. we didn't look at the sales history on the property). We didn't allow enough time between signing and going unconditional to complete due diligence. Our solicitor really wants us to meet the other cross-lease owners to see if they're going to be supportive or not. It would also have been useful to meet the neighbours at the back, whose driveway we need to come down with the relocatable house.
We're going to go with the ex-Castor Bay house, the one for $30,000. The house mover checked out the section today and confirmed he can get the house on there no problems. Next step is to pay the deposit and get the Auckland City Council out to inspect the house. Our solicitor wants to check out the contract first though. It was a relief to find out the house removal company does insure the house until it is in our possession, and whilst they want the final installment paid before delivery, it's held in their solicitor's Trust Account and refunded if they drop the house and wreck it.
More learnings around land titles: The title at the moment is a "residue" title. Once we've got Code of Compliance on the new house, we have to have the property resurveyed and a new flats plan drawn up, and new title documents. These Title documents have to go to the other cross-lease owners for signing. This is when we incur and have to pay their lawyers' fees. Whilst, the Council may still grant a reasonable building consent even when the other cross-lease owner might have opposed it; things can come unstuck at the new Title stage. An opposing cross-lease partner could at this point withhold agreement, forcing costly legal action. And, we'll need that new title to refinance over the land with house. Without it a mortgage is only secured over the land only. Oops!
So, we move in to tighter budgetry conditions from tomorrow as uncertain weather on the horizon threatens to wash away all that lovely capital gain we thought we'd secured.
Wednesday, April 21, 2010
The Excitement of Negotiating
We went back to the Real Estate Agent and renegotiated the price of the section in Otahuhu. We had to bring the price down to make the figures stack up. It's hard to believe it, but we managed to get it down by $12,000. It was that or the deal falls over. They've given us one day to hand over the deposit and go unconditional. To achieve this we said we'd remove the conditions requiring them to remove the old garage (that exists from prior to the section being subdivided and thus spans the new boundary) and the rubbish. That's just a bit of dirty labour for us and some rubbish dumping fees (or a skip). Maybe we could sell some of the garage for scrap metal?
Tomorrow, the builder half of us, checks out the house. We've already found some worrying conditions in the house removers contract - like we have to insure the house, and they want the final 50% of the payment at the latest 2 days before they deliver the house! Huh!? They want to be paid in full before they transport the house or put it on piles, and they don't insure it. So, if they drop it on the way and ruin it, bad luck for us. They put the roof framing back on, but not the roof tiles. These things could be deal-breakers. Our lawyer wants to see the contract first anyway. I'm crossing my fingers. I really want it to work in our favour for once. Sounds like I'm hoping for a lotto win, like it's gambling, like we're speculating. Exciting but risky. Are we there yet? Do we have lift off? It's a day at a time, hoping, tempering the emotion, trying to stay rational - think figures, focus on profit. Sleep would be welcome.
Tomorrow, the builder half of us, checks out the house. We've already found some worrying conditions in the house removers contract - like we have to insure the house, and they want the final 50% of the payment at the latest 2 days before they deliver the house! Huh!? They want to be paid in full before they transport the house or put it on piles, and they don't insure it. So, if they drop it on the way and ruin it, bad luck for us. They put the roof framing back on, but not the roof tiles. These things could be deal-breakers. Our lawyer wants to see the contract first anyway. I'm crossing my fingers. I really want it to work in our favour for once. Sounds like I'm hoping for a lotto win, like it's gambling, like we're speculating. Exciting but risky. Are we there yet? Do we have lift off? It's a day at a time, hoping, tempering the emotion, trying to stay rational - think figures, focus on profit. Sleep would be welcome.
Tuesday, April 20, 2010
Assessing a Relocatable Home
Today I checked out a cheaper relocatable home. It's 120 square metres, has french doors leading in to the lounge room (nice T&G - tongue and groove - wooden floors polished). A wall has been cut out opening up the dining area to the lounge. Off that are a bedroom and the large kitchen. A sunroom off this constitutes the 3rd bedroom. A doorway on the other side of the kitchen leads to a hallway, off which is the large main bedroom with one wall of wardrobes, and the bathroom.
This is a cheapy. We could get this for $30,000 all inclusive (including delivery and siting on piles). That's $19,000 below relocatable house No.2 and $33,000 less than the cost of moving the beautiful house we were given. But...
Here's the work: there's signs of borer, so have to assume we'd have to get the house treated. The concrete tiles on the roof look in good nick, just there's some missing and there's a big sag; there's some woodrot in some weatherboards but not major, and some wood in the eaves is rotten. The bath looks like a keeper, but it's falling through the floor below which has suffered flooding and already been replaced with particle board sometime in the past, so new bathroom floor needed. The Serotone on the bathroom walls looks ok and the vanity basin could stay. A lot of wall lining and ceiling relining is needed throughout. Salvagable in the kitchen is an island bench top and maybe a dishwasher. The floors throughout need a polish. Kitchen and bathroom floors need new vinyl. Hot water cylinder is gone (but they usually always are). One window pane has been smashed. Interior paint throughout, and exterior - though exterior paint job is reasonable and will only need a light sand. New guttering, lining and insulation in roof, insulate under floor, curtains, steps and decking, fencing, concrete the driveway and carport or single garage pad, landscaping.... Are you feeling tired?
Everyone thinks we're mad. Remember we both work fulltime and have a 5 year old daughter, no family close by to help with childcare and we're trying to sell our house privately and Mum's.
As I said to the mortgage broker, we're bored. We've fixed up the house we're living in, we're ready for our next project. The challenge is tempting - having the chance to make something, to bring the project in under what it will finally value at; to create a decent home we can feel okay about renting out, a home that will stand up to years of tenants. And, in the end there's the actual aim which is to get started on getting ahead - to have an asset that brings in positive cashflow and appreciates over time.
This is a cheapy. We could get this for $30,000 all inclusive (including delivery and siting on piles). That's $19,000 below relocatable house No.2 and $33,000 less than the cost of moving the beautiful house we were given. But...
Here's the work: there's signs of borer, so have to assume we'd have to get the house treated. The concrete tiles on the roof look in good nick, just there's some missing and there's a big sag; there's some woodrot in some weatherboards but not major, and some wood in the eaves is rotten. The bath looks like a keeper, but it's falling through the floor below which has suffered flooding and already been replaced with particle board sometime in the past, so new bathroom floor needed. The Serotone on the bathroom walls looks ok and the vanity basin could stay. A lot of wall lining and ceiling relining is needed throughout. Salvagable in the kitchen is an island bench top and maybe a dishwasher. The floors throughout need a polish. Kitchen and bathroom floors need new vinyl. Hot water cylinder is gone (but they usually always are). One window pane has been smashed. Interior paint throughout, and exterior - though exterior paint job is reasonable and will only need a light sand. New guttering, lining and insulation in roof, insulate under floor, curtains, steps and decking, fencing, concrete the driveway and carport or single garage pad, landscaping.... Are you feeling tired?
Everyone thinks we're mad. Remember we both work fulltime and have a 5 year old daughter, no family close by to help with childcare and we're trying to sell our house privately and Mum's.
As I said to the mortgage broker, we're bored. We've fixed up the house we're living in, we're ready for our next project. The challenge is tempting - having the chance to make something, to bring the project in under what it will finally value at; to create a decent home we can feel okay about renting out, a home that will stand up to years of tenants. And, in the end there's the actual aim which is to get started on getting ahead - to have an asset that brings in positive cashflow and appreciates over time.
Monday, April 19, 2010
Location, Location, Location
Here's a good article explaining what this common phrase means: http://www.thebull.com.au/articles_detail.php?id=10834
Sunday, April 18, 2010
Subdividing a Full Site
Today we went over to Point England to check out a few open homes. The properties were all advertised around $400,000, which indicated they were big enough sites to chop up. At the first one we got to, the agent promptly told us the section was Zoned 5 and therefore was not allowed to be subdivided. She claimed the whole street and the next street over, where the second property on our list was showing, were all Zoned 5.
She's wrong according to the Auckland City website. Surely she doesn't think the fibrelight clad 3 bedroom house on 677 square metres is worth the $439,000 price tag? No wonder, she was so quick to scratch out that figure and write $410,000 and say conspiratorially, "and that's highly negotiable."
We didn't get in to see the others - it's so quiet, the Agents are packed up and gone before the open home time is over, or they didn't bother doing the open home at all. At one place, we pulled up with 10 minutes to spare, but the agent had already locked up and was collecting her signs from the ends of the street. She saw us sitting there, but drove on! How would the vendors feel if they knew the agents were making a token appearance, and or indicating that the house can be bought way under the asking price? The money the agent is so ready to give away is of course, their commission, that they no doubt said they'd get on top of the vendors desired price.
This property we missed out on seeing, had already been subdivided but was being sold with the 2 titles at $479,000. No work has been done on fencing off the back section. So, the 3 other properties that can be chopped up selling at $399,999, after the $20,000 (rough guess) needed to crosslease them, can look forward to asking in the high $400s. Doubt these prices will be realised in this market, however.
It was interesting to see the wide disparity in prices being asked for houses in Point England (which is barely distinguishable from Glen Innes in the streets back from the waterfront) and Otahuhu. We can't help feeling that the Point England places are over-priced, despite the many and varied new so-called 'traffic calming' interventions (huge roundabouts at intersections and paved and planted growths that grow out from the footpaths to put people off even driving down the street and to slow the traffic that has to drive there). These are apparently the result of an Auckland City Council study to reduce the number of road crashes in the area. As visitors to the area, it made it feel more shut off, enclosed, condusive to children playing softball in the middle of the street and well - ghettoish. Another, downfall is that it stops big trucks, with say a relocatable house on the back, from being able to come down the street - so there goes that idea.
She's wrong according to the Auckland City website. Surely she doesn't think the fibrelight clad 3 bedroom house on 677 square metres is worth the $439,000 price tag? No wonder, she was so quick to scratch out that figure and write $410,000 and say conspiratorially, "and that's highly negotiable."
We didn't get in to see the others - it's so quiet, the Agents are packed up and gone before the open home time is over, or they didn't bother doing the open home at all. At one place, we pulled up with 10 minutes to spare, but the agent had already locked up and was collecting her signs from the ends of the street. She saw us sitting there, but drove on! How would the vendors feel if they knew the agents were making a token appearance, and or indicating that the house can be bought way under the asking price? The money the agent is so ready to give away is of course, their commission, that they no doubt said they'd get on top of the vendors desired price.
This property we missed out on seeing, had already been subdivided but was being sold with the 2 titles at $479,000. No work has been done on fencing off the back section. So, the 3 other properties that can be chopped up selling at $399,999, after the $20,000 (rough guess) needed to crosslease them, can look forward to asking in the high $400s. Doubt these prices will be realised in this market, however.
It was interesting to see the wide disparity in prices being asked for houses in Point England (which is barely distinguishable from Glen Innes in the streets back from the waterfront) and Otahuhu. We can't help feeling that the Point England places are over-priced, despite the many and varied new so-called 'traffic calming' interventions (huge roundabouts at intersections and paved and planted growths that grow out from the footpaths to put people off even driving down the street and to slow the traffic that has to drive there). These are apparently the result of an Auckland City Council study to reduce the number of road crashes in the area. As visitors to the area, it made it feel more shut off, enclosed, condusive to children playing softball in the middle of the street and well - ghettoish. Another, downfall is that it stops big trucks, with say a relocatable house on the back, from being able to come down the street - so there goes that idea.
Saturday, April 17, 2010
Trading Property for What Have You
We 're also trying to sell Mum's beautiful grand Art Deco dame of a house in Paeroa. With limited marketing, we've finally had someone through who loves the place. The only catch is we've got to take his beautiful 38 foot launch as part of the trade.
At least Mum would be able to get out of being alone, so far away from her daughters. Paeroa is one and a half hours drive from Auckland. The house is big and the main bedroom is upstairs. It's a worry for Mum and us that she's on her own there.
When Mum's husband died, she was left with a small mortgage over the house and a significant sum of Empire Trade Exchange dollars. These are usually traded, but can be used to buy goods and services. Trade deals often include boats, cars and sometimes diamonds or other valuables, so the offer before us is not unusual.
Mum has less need for a boat, than she does for a house with stairs, but at least she could move on and look for a more suitable property to swap the boat, e-banc dollars and cash for. A hard decision. Easy for us - we find ourselves fantasising about having a launch, even if just for a short time and on loan.
What would you do?
At least Mum would be able to get out of being alone, so far away from her daughters. Paeroa is one and a half hours drive from Auckland. The house is big and the main bedroom is upstairs. It's a worry for Mum and us that she's on her own there.
When Mum's husband died, she was left with a small mortgage over the house and a significant sum of Empire Trade Exchange dollars. These are usually traded, but can be used to buy goods and services. Trade deals often include boats, cars and sometimes diamonds or other valuables, so the offer before us is not unusual.
Mum has less need for a boat, than she does for a house with stairs, but at least she could move on and look for a more suitable property to swap the boat, e-banc dollars and cash for. A hard decision. Easy for us - we find ourselves fantasising about having a launch, even if just for a short time and on loan.
What would you do?
Buying a Ready-made Renter
Today we looked at a 3 bedroom, 1 bathroom house on 385 square metres in Otahuhu. It's got a lock up garage, is reasonably tidy inside and out. It's not a crossleased section. It's tenanted and the tenants want to stay. Rent is $350 a week. Government value (upon which the rates are calculated) is $260,000.
The agent said it was going up for quick auction, whatever that means. Property values, especially in Otahuhu are trending downwards with a drop of 6.7% over the last year. We could expect this property to sell under GV - possibly around $240,000 or lower if there's some urgency to the sale.
So let's do the figures.
The banks would look at lending 70%, that's $168,000, requiring capital of $72,000 from us.
Rental income of $350 per week over the year = $18,200
Interest on a mortgage of $168,000 at 5.95% p.a. = $9996
Rates, insurance, and allowance for maintenance and vacancy = $4649.70 p.a.
So that's a potential positive cashflow of $3554.
It's not great return on the investment of $72,000, being only about +4.9%, but that's better than what banks are paying. Haven't factored in tax. Plus, overtime the property market should rebound, and the capital value should improve again. In the meantime the tenants pay off the mortgage.
Concerns would be the age of the house - it's Circa 1909, that's 100 years, weatherboard, with tin roof. The nice paint job could be hiding all sorts of wrinkles. It could be a fairly recent bog and flog, so a thorough inspection of the building, including looking up in the roof and under (although that doesn't look possible as the house is flat to the ground) would be required.
It would be interesting to go to the Auction later this week to see how it goes.
Tomorrow, we're going to check out some properties, with a house sitting on a full site - ripe for cutting up.
The agent said it was going up for quick auction, whatever that means. Property values, especially in Otahuhu are trending downwards with a drop of 6.7% over the last year. We could expect this property to sell under GV - possibly around $240,000 or lower if there's some urgency to the sale.
So let's do the figures.
The banks would look at lending 70%, that's $168,000, requiring capital of $72,000 from us.
Rental income of $350 per week over the year = $18,200
Interest on a mortgage of $168,000 at 5.95% p.a. = $9996
Rates, insurance, and allowance for maintenance and vacancy = $4649.70 p.a.
So that's a potential positive cashflow of $3554.
It's not great return on the investment of $72,000, being only about +4.9%, but that's better than what banks are paying. Haven't factored in tax. Plus, overtime the property market should rebound, and the capital value should improve again. In the meantime the tenants pay off the mortgage.
Concerns would be the age of the house - it's Circa 1909, that's 100 years, weatherboard, with tin roof. The nice paint job could be hiding all sorts of wrinkles. It could be a fairly recent bog and flog, so a thorough inspection of the building, including looking up in the roof and under (although that doesn't look possible as the house is flat to the ground) would be required.
It would be interesting to go to the Auction later this week to see how it goes.
Tomorrow, we're going to check out some properties, with a house sitting on a full site - ripe for cutting up.
Thursday, April 15, 2010
To Build or To Buy: Ah There's The Rub
Another option we have considered is building a new home altogether. Grandma burnt her house down you see, which created the opportunity (potentially) to buy her property and build a new house on it. We'd have to sell our house first, however, as we'd need all the cash we could scrape together to buy the section and undertake a build project.
The timing wasn't quite right for us, as we were nine months out from coming off our fixed mortgage. We'd fixed for three years and originally suspected at the end of that we'd want to sell to move in to zone to get our daughter in to a desirable school. She's just turned five. Unfortunately, most of the primary schools around us are Decile 1 (which means they serve, predominantly, children from families in the lowest 10% socio-economically).
School Zoning Contributes to Property Boom Bust Cycle
Just an aside about this school zoning thing - it must be one factor that fuels New Zealand's property boom bust cycle. When you don't have kids, you don't have to think about the desirability of the local schools you're in zone for. You buy in an area for other reasons. Once people have a child or two, and as those children near school age (5 yrs) there's a flurry to sell in areas with less desirable schooling and a shift to housing in areas zoned for better schools. Certainly, it's a home marketing factor. Having to sell and move to manoeuvre children closer to desirable schools, doesn't just happen once however. A second move may be required to gain access to the desired Intermediate (middle school for 11-12 yr olds) and High School.
Another negative outcome of the zoning policy is that it probably contributes to ethnic and socio-economic alienation, segregation (i.e. ghettos). This occurs as the demographics in an area change. Increasingly, over the next 30-40 years there will be more and more Maori, Pacific Island and Asian people making up Auckland's population. If socio-economic disparity by ethnicity is not addressed and reduced in New Zealand - this increasing ethnic diversity of school populations will result in 'white-flight' as socio-economically advantaged xenophobic or racist Pakeha move their children out of schools serving a growing proportion of ethnic minority groups. To be fair to those Pakeha parents who do not believe they are racist, they may simply not be happy with their child being one of a minority ethnic group at school.
Wouldn't it be good if you didn't have to sell and move to gain access to great schooling?
Anyway, I digress... back to the question of whether to build? It was exciting dreaming of our 'Grand Design' and dreaming about living in a beautiful house with everything right where you'd want it to be: to have a walk-in pantry and a kitchen bench that extends out on to the deck so meat could be cooked outside, and a separate toilet or two, positioned well away from the bedroom or any areas within ear-shot of the kitchen, dining or lounge room areas; to have a wet-area bathroom with exterior entrance so you can enter from the beach or boat and wash off without traipsing sand through the house... it was a nice dream.
The timing wasn't quite right for us, as we were nine months out from coming off our fixed mortgage. We'd fixed for three years and originally suspected at the end of that we'd want to sell to move in to zone to get our daughter in to a desirable school. She's just turned five. Unfortunately, most of the primary schools around us are Decile 1 (which means they serve, predominantly, children from families in the lowest 10% socio-economically).
School Zoning Contributes to Property Boom Bust Cycle
Just an aside about this school zoning thing - it must be one factor that fuels New Zealand's property boom bust cycle. When you don't have kids, you don't have to think about the desirability of the local schools you're in zone for. You buy in an area for other reasons. Once people have a child or two, and as those children near school age (5 yrs) there's a flurry to sell in areas with less desirable schooling and a shift to housing in areas zoned for better schools. Certainly, it's a home marketing factor. Having to sell and move to manoeuvre children closer to desirable schools, doesn't just happen once however. A second move may be required to gain access to the desired Intermediate (middle school for 11-12 yr olds) and High School.
Another negative outcome of the zoning policy is that it probably contributes to ethnic and socio-economic alienation, segregation (i.e. ghettos). This occurs as the demographics in an area change. Increasingly, over the next 30-40 years there will be more and more Maori, Pacific Island and Asian people making up Auckland's population. If socio-economic disparity by ethnicity is not addressed and reduced in New Zealand - this increasing ethnic diversity of school populations will result in 'white-flight' as socio-economically advantaged xenophobic or racist Pakeha move their children out of schools serving a growing proportion of ethnic minority groups. To be fair to those Pakeha parents who do not believe they are racist, they may simply not be happy with their child being one of a minority ethnic group at school.
Wouldn't it be good if you didn't have to sell and move to gain access to great schooling?
Anyway, I digress... back to the question of whether to build? It was exciting dreaming of our 'Grand Design' and dreaming about living in a beautiful house with everything right where you'd want it to be: to have a walk-in pantry and a kitchen bench that extends out on to the deck so meat could be cooked outside, and a separate toilet or two, positioned well away from the bedroom or any areas within ear-shot of the kitchen, dining or lounge room areas; to have a wet-area bathroom with exterior entrance so you can enter from the beach or boat and wash off without traipsing sand through the house... it was a nice dream.
Wednesday, April 14, 2010
How Downers Depress Dreams
Today, I asked the mortgage broker to process an application for a loan to buy this section we've found. We've made an offer on a small crossleased back half section in Otahuhu. Capital value (CV) is $175000, asking price was $179000, we offered $150000; final sale price settled on = $157000. Seems like a good deal. We've found a 3 bedroom relocatable house to put on the section that will cost $49000. Seems all good and cheap so far, right?
Well, property values in Otahuhu are dropping. It's one of the cheapest suburbs in the Auckland City Council. Our calculations suggest that all up, getting the house up to Code of Compliance and redecorated a bit could end up costing us $250000. Today in Otahuhu you can buy 2 bedroom units for $250000 and as low as $150000. There are some 3 bedroom houses for sale around the $260000 range, though they probably need another $40000 spent on redecoration to get them rentable again.
Still, there's a big risk that we could easily over-capitalise. The mortgage broker thinks it's not a wise investment - he thinks we should borrow more to buy in a better suburb where the property will appreciate faster. Spend $1 today somewhere where it's going to be worth $2 tomorrow. He thinks we should buy an existing dwelling. We like the challenge the relocatable project offers. There's a potential to produce a reasonable quality rental property for under what it will value at when completed.
What swayed me really was the chance to keep the overall cost down, borrow less, have the rent cover the properties costs and with such a low mortgage - we could get the property freehold in a much shorter period. We can also get started on this project before selling our home. More costly opportunities, mean we need to try and sell first - mainly because we don't want to have a huge amount of mortgage debt hanging over us.
I'm with Robert Kiyosaki on this one - going for positive cashflow. Our mortgage broker says, 'If you want positive cashflow, go for an apartment. But then you won't have something that's going to appreciate in value... It's the land underneath the dwelling that's going to appreciate.' In other words: buy land, go for capital gain. Yes, that's what we're proposing to do: buy a piece of land and put a house on it. Of course we'd like to see it appreciate in value over time.
Other downer today - the lawyer wanted us to be aware of the potential problems and hidden costs that could arise because this is a crosslease section. The owners of the other half, have to approve the house we want to put on. We have to apparently pay their lawyers fees! What? Hmm that could get costly. If the other owners are difficult to get a hold of, or decide to be difficult, then they could cause delays. Delays cost. Lawyer ends by saying, you'd be better to buy an existing house.
I'm feeling a slight rebellious tonight - like I've been challenged, dared to do it. I feel like proving them wrong. But, even Robert advices, you've got to listen to your team.
Well, property values in Otahuhu are dropping. It's one of the cheapest suburbs in the Auckland City Council. Our calculations suggest that all up, getting the house up to Code of Compliance and redecorated a bit could end up costing us $250000. Today in Otahuhu you can buy 2 bedroom units for $250000 and as low as $150000. There are some 3 bedroom houses for sale around the $260000 range, though they probably need another $40000 spent on redecoration to get them rentable again.
Still, there's a big risk that we could easily over-capitalise. The mortgage broker thinks it's not a wise investment - he thinks we should borrow more to buy in a better suburb where the property will appreciate faster. Spend $1 today somewhere where it's going to be worth $2 tomorrow. He thinks we should buy an existing dwelling. We like the challenge the relocatable project offers. There's a potential to produce a reasonable quality rental property for under what it will value at when completed.
What swayed me really was the chance to keep the overall cost down, borrow less, have the rent cover the properties costs and with such a low mortgage - we could get the property freehold in a much shorter period. We can also get started on this project before selling our home. More costly opportunities, mean we need to try and sell first - mainly because we don't want to have a huge amount of mortgage debt hanging over us.
I'm with Robert Kiyosaki on this one - going for positive cashflow. Our mortgage broker says, 'If you want positive cashflow, go for an apartment. But then you won't have something that's going to appreciate in value... It's the land underneath the dwelling that's going to appreciate.' In other words: buy land, go for capital gain. Yes, that's what we're proposing to do: buy a piece of land and put a house on it. Of course we'd like to see it appreciate in value over time.
Other downer today - the lawyer wanted us to be aware of the potential problems and hidden costs that could arise because this is a crosslease section. The owners of the other half, have to approve the house we want to put on. We have to apparently pay their lawyers fees! What? Hmm that could get costly. If the other owners are difficult to get a hold of, or decide to be difficult, then they could cause delays. Delays cost. Lawyer ends by saying, you'd be better to buy an existing house.
I'm feeling a slight rebellious tonight - like I've been challenged, dared to do it. I feel like proving them wrong. But, even Robert advices, you've got to listen to your team.
Tuesday, April 13, 2010
Getting Started
Do you ever feel like you're just not getting ahead of where you were last year, or the year before that?
I feel like I've been financially stuck in the same place for at least the last 3 years. My salary has gone up a bit at least once a year. But, I guess the rising cost of living is wiping that out.
We bought our current home in Panmure, Auckland in June 2007. It was boom time, just before the peak in the property market. So, we paid just under top dollar. Now, 3 years later, we've completed fixing up what needed fixing and we're trying to sell. But, we're on the downward side of the peak and sliding.
We listed our house for sale beginning of February. We've had over 2400 views on Trade Me and several couples look through. But, the National Party are threatening to hurt property investors in the upcoming budget causing buyers to back off and wait; and, it's triggered some property investors to throw properties on the market. Some Real Estate Agents are saying it'll take nine months to clear the backlog of properties now on the market - and our house happens to be one of them.
This blog is about the ups and downs of trying to get ahead financially. Follow us as we tack back and forth between the different investment opportunities. Whose advice will reign supreme? Robert Kiyosaki's invest for cashflow or Norm's (our mortgage broker) advice to leverage against our home, borrow, borrow, borrow and negative gear?
I feel like I've been financially stuck in the same place for at least the last 3 years. My salary has gone up a bit at least once a year. But, I guess the rising cost of living is wiping that out.
We bought our current home in Panmure, Auckland in June 2007. It was boom time, just before the peak in the property market. So, we paid just under top dollar. Now, 3 years later, we've completed fixing up what needed fixing and we're trying to sell. But, we're on the downward side of the peak and sliding.
We listed our house for sale beginning of February. We've had over 2400 views on Trade Me and several couples look through. But, the National Party are threatening to hurt property investors in the upcoming budget causing buyers to back off and wait; and, it's triggered some property investors to throw properties on the market. Some Real Estate Agents are saying it'll take nine months to clear the backlog of properties now on the market - and our house happens to be one of them.
This blog is about the ups and downs of trying to get ahead financially. Follow us as we tack back and forth between the different investment opportunities. Whose advice will reign supreme? Robert Kiyosaki's invest for cashflow or Norm's (our mortgage broker) advice to leverage against our home, borrow, borrow, borrow and negative gear?
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