Finance & Strategy Expert
Finance & Strategy
Ask Kris Pederson, director of Kris Pederson Mortgages questions relating to Mortgages, Finance, and Strategy
Kris is a respected commentator on the property and finance markets in New Zealand and overseas. He spends his time working closely with his support team sourcing clients leading edge finance strategies.
I have a rental property in Woolston. It is an old state house that was built in 1960. It needs some work done to it to get it completed which we can't afford to do as the bank won't lend us any money because of our LVR which is 84.19%.
The house is in a Trust as well so I can't negatively gear it. I've approached the SBS Bank for a loan which was declined because we are already over the maximum LVR. There are many factors working against us including the flat housing market in Christchurch which makes it difficult to sell right now.
Who can I get unbiased advice from in Christchurch as to whether we should just cut our losses and run or should we hold on to the property?
My thoughts were that with the rebuild in the CBD that the Woolston area may be in demand in the next six years or so once people start moving back into the CBD for work. Hence we should see property values go up again.
Is there any way for me to buy another property to live in and do up? I’m itching to do something like that which I can sink my teeth into.
My current situation is as follows: I own the one bedroom unit that I live in. There is no loan on it and its value is about $220,000. I also own an investment rental with long term tenants. It has a $309,000 interest only loan on it and is valued at around $500,000.
I gave up full time employment recently and I'm using my savings while I enjoy life and pursue my dreams. I also have another interest only bank loan of $45,000 which the investment property pays for.
Ideally, I'd like to keep both properties and maybe rent out my home. I don't have any desire to sell the investment property. I also don’t plan to get a full time job. I can pick up work if I want but the plan is to stay semi-retired and see what happens.
I have three rental properties in my wife and I's name. They were all purchased in the last four years, two in the last six months. All have mortgages and the collective rent covers the mortgage and so far all other costs.
My intention is to sell one property after two years from purchase to reap capital gains and reduce the mortgage on the two remaining properties. But I am concerned about tax. I am earning in the upper tax bracket already and my wife is a stay at home mum.
What is the best option for me? Do I need to form a Trust or a company or should I simply put everything in my wife's name?