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JohninCebu
Hey John, Of the 4 homes, we sold one prior to moving into the home we are in now. We now only have three. NZ'ers pay tax on rental income, but all the properties are negatively geared, so we have to top them up each week. We get to claim this against our personal income tax and get a rebate each year.

 

We really wanted to sell our own home before we left for Cebu, but as I said, we had no luck. This would have given us more money to play with while we are there, but now we will just have to live on a bit of a budget. Will still have enough to buy you a beer though!

 

I understand that it may be wise to just get rid of our house, but we cant as the bank will bankrupt us if we cant sell the home for more than what we owe. Then we may not be able to continue with our trip. So we decided to keep it as a rental, long term (7-10 years). We will keep the other two rentals as there is a lot more equity in them.

 

As they say in NZ, "She'll be right mate!"

Good on yer mate! Just a thought but if you have equity in the other 2, why not take it now. If you need it in a year or two it may be gone. You can always buy again at the bottom of the market - which is my plan in a year or 4.

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Mattfromnz
Everybody who can't sell their house are renting it out.

 

What do you think the result will be?

 

.

I understand what you are saying. As result of people not being able to sell, they take the rent out option. So there becomes more rentals on the market and the rental prices may drop a little. The positive thiing is, if people can not buy, as lending has tightened up, where are they going to live? A rental property. Although the house sales are slow, the rental market is strong here in NZ. NZ has a very high person to property ratio and immigration is strong. So while it may be true in your country, I dont foresee it being a problem for us in our situation.

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smokey
John,

 

First, this isn't to pick at you, or to brag, or otherwise.

 

But, maybe you should look at putting, if only a little amount, into Legacy. I have not had one issue with them since doing so - not one. I am still making the same percentage today, that I was two years ago.

 

Yes, it could end tomorrow, for me. Before anyone makes that same statement. But, it hasn't so far. Of course, I am also sure that, it is only a matter of time before this really hits us here too, to some degree, if it keeps going as it has.

 

 

 

 

 

in all the years i have been hearing about rural banks i have never meet anyone who went the full term and told how he got his money back... the interest is great paul but will there be any hassel when the 5 years is up and you go in and say ... i am closing my acct... ???

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A_Simple_Man
So there becomes more rentals on the market and the rental prices may drop a little.

That is not the worst case scenario, this is . . . rental houses become SO available that tenants move in, trash your house, don't pay the rent, move on to the next guy who is so eager to have a tenant that he doesn't even do a background check (assuming he knows how and assuming it is even legal . . privacy laws you know). Yes, it happened where I lived in 1980 and lasted over 10 years . . . those who had to do it over again would sell at any price or let the bank have the house back. . . . . however, the slum lords got rich because they knew how to take advantage of the situation.

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broden

renting can be a pain .. i own my house and the one next door (i like some control over who my neighbor is :D amd the ability to keep my eye on the place) ... finding a truly good tenant can be a chore and a half .. luckily i have a very good one they've been there for a few years already .. but i also own both houses outright .. and have since i bought them (never had a mortgage or loan of any kind for anything) .. so all i ever worry about is upkeep and taxes .. and most likely i'll just leave both houses to my son when we retire and move

 

but anyway yeah good luck renting or rather good luck in finding a good tenant .. that's the tricky part if you can succeed in that you'll be alright .. and have someone you trust to actually watch over the place .. watch over the place

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in all the years i have been hearing about rural banks i have never meet anyone who went the full term and told how he got his money back... the interest is great paul but will there be any hassel when the 5 years is up and you go in and say ... i am closing my acct... ???

 

Hi Robert,

 

I can't speak for the rural banks themselves, as I am more into high risk. I have a bit invested there, but not nearly as much as I do in their "uninsured" programs.

 

Paul

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Bob Ward

BTW - the answer to your original topic question, "Am I mad"? It's up to you! I would ask Mel! LOLOLOLOLOL

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Paul, my only problem is the time frame. I don't like to lock up funds in times like these when things are moving daily. In 3 years, the term for the rural banks (which have had negative press) we could have inflation of 20%+ - it's already 12%. So a negative return is possible. When markets settle, could be a year or two, I'll probably do 50%pa for a few years and still have control.

 

Not saying anything negative about Legacy, it's all a matter of timing.

 

Prudentialife cut the rate on their plans from 12% to 6%, that means, even if you locked it in years ago at 12%, you are now earning 6%. It's all in the fine print. They have started reducing, but my guess is that most of these type of plans will also be reducing their returns.

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I hope I am wrong. But if I were trying to take full advantage of opportunity (AMERICA is all about big money) , I would throw a right hook! meaning look out for another large scale attack somewhere.

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Mattfromnz
renting can be a pain .. i own my house and the one next door (i like some control over who my neighbor is ;) amd the ability to keep my eye on the place) ... finding a truly good tenant can be a chore and a half .. luckily i have a very good one they've been there for a few years already .. but i also own both houses outright .. and have since i bought them (never had a mortgage or loan of any kind for anything) .. so all i ever worry about is upkeep and taxes .. and most likely i'll just leave both houses to my son when we retire and move

 

but anyway yeah good luck renting or rather good luck in finding a good tenant .. that's the tricky part if you can succeed in that you'll be alright .. and have someone you trust to actually watch over the place .. watch over the place

Two of the properties have good long standing tenants and they are managed by a property management team. They have done inspections and so far they are all good. Our own home, we have found a lady who is about 40 and it will be just her and her 15yo son living there. I'm not worried about tenants really. We are quite picky with our selection and keep a good eye on them. She'll be right mate. (Kiwi expression) ;)

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If you own quality stocks, sooner or later they will come back. Luckily for me, I sold all my mutual funds in my 401K 3 months ago, believe it or not I just started buying some stocks today. Some of the stuff I am buying are 60% discount. I can't touch my 401k for another 10 years so if the markets go down the next few years, I still have time to recover the losses and hopefully make some profit. Hang in there John, don't panic yet , you invest for the long haul.

 

Just food for thought

 

Though your advice about staying in the market for the long - haul seems to be sound based on the history of the markets current upheavels may cause one to ponder " how long is long " . ;) I expect that decision would be based on one's age primarily . If i were close to retirement as many american baby boomers are i personally would be scared shxxxxxx at the moment . Firesales are great if you can afford the potential loss or of you are Warren Buffet but many employee 401\k plans and the like will not recover anytime soon .

 

http://news.yahoo.com/s/ap/20081007/ap_on_...down_retirement

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broden
Two of the properties have good long standing tenants and they are managed by a property management team. They have done inspections and so far they are all good. Our own home, we have found a lady who is about 40 and it will be just her and her 15yo son living there. I'm not worried about tenants really. We are quite picky with our selection and keep a good eye on them. She'll be right mate. (Kiwi expression) ;)

good deal ... then you should be pretty well set up .. like i said that's the trick

 

i don't know about there but here in the states .. you get a bad tenant it takes forever to get them out .. and they can do alot of damage in that time .. while your hands are legally tied

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Mattfromnz
good deal ... then you should be pretty well set up .. like i said that's the trick

 

i don't know about there but here in the states .. you get a bad tenant it takes forever to get them out .. and they can do alot of damage in that time .. while your hands are legally tied

True. The law in NZ does seem to protect the tenant more so than the landlord. One of our rentals went up in smoke a couple of months ago due to the tenants leaving a ciggerette on the deck. Thank god for insurance and loss of rent cover. Accidents and sh!t happen sometimes.

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And what do I read, seat belts, mountain bikes and where to have a steak!

 

 

I posted in all 3 of those thread ... I started the mountain bike thread.

 

You can't start investing when you are emotional and mad. You need to first relax and think out a short term plan and a long term plan.

 

Things you can do short term is look at your expenses and try to bring them down as much as possible. Cut out all vices. ( No drinking, smoking, gambling, p*orn site memberships, prostitutes ) I am not saying you are into all those vices .... but those are the first things I would need to cut out of my life if I want to have some money in my pocket to get through these hard times.

 

If I had a wife or girlfriend... I would tell her to start looking for a job or I would get rid of her. If she is costing me money I would have to rethink my relationship. This is a time of duel income families. If you are a wife of gf of an expat... tell him to send you to school because you are going to need an education when he is long gone. If he won't pay for your education... move on and find a new sponsor.

 

The Philippines has an inflation of aprox 12 percent a year. I like the PDIC insured ( P250,000) time deposits paying 20 percent a year. I am also looking for more rental property for income and long term investment.

 

Yes.. the seat belt thread is useless... but could save your life.

 

The mountain bike thread is useful because it is a healthy hobby that will keep you fit and your mind active. The only investment is buying a bike.

 

If you want to save on steaks go the the Silver Dollar Bar and ask John or Chris for the Swiss Deli Meat Menu. The Minimum order is 50 kilos so they take orders and when it reaches 50 kilos they order. They will text you when it arrives for pick up. It is high quality meat and is at wholesale cost. Go online and find good recipes for cooking those steaks.

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JohninCebu

After the 29-32 crash, the DOW didn't reach the same level until 1956.

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