That's a pretty crap example to be honest. The numbers are just manipulated in a way to support your examples, but it's not the reality of how things work. Firstly, the assumption here is that you're spending $5000 for repair on the old house, consistently every year for 10 years, hence why you said the estimated cost for repair for the next 10 years is $50,000. Unless you found an extremely terribly skilled tradie, who does NOT provide warranty whatsoever, it's extremely unlikely to have to spend $5000 on repair EVERY YEAR. And just because a property is new build, doesn't mean it won't run into issues and require repair either. So this isn't really a fair comparison, because you're immediately putting the older house at a deficit of $5000 every year. Secondly, the new build property has body corporate of $500 every year. That's pretty low for body corp and most properties that charge body corp would be higher than that. So that's not entirely accurate either. Speaking of body corp, it's a shared cost amongst all the neighbours in that area. Typically, you pay body corp when it comes to an apartment, or new builds that have walls and roof joined together. The problem with these is that if for example your neighbour has a leaky roof, well you might be affected by the problem too and that the body corp for maintenance and repair will basically be shared by the community. Everyone in that community pays body corp regardless if you are the one facing issues or not. Lastly, the rates on the new build is much lower than the older property. Rates typically correlate with the CV of your property. So it's fair to assume that the older property has a higher CV and probably a higher potential to sell at a much higher price. You should be focusing on getting as much out of the sale as possible, instead of focusing on just swapping the property just because the cashflow in the new build is "better".
Hi could you consider cover Airbnb in nz please? We are considering putting portable self contained cabin on our property. Love a kiwi video on this ❤
Im wondering if 1 or 2 portable cabin Airbnb could be a business and pay myself? And are there any tax deduction to reduce tax bill
That's a pretty crap example to be honest. The numbers are just manipulated in a way to support your examples, but it's not the reality of how things work.
Firstly, the assumption here is that you're spending $5000 for repair on the old house, consistently every year for 10 years, hence why you said the estimated cost for repair for the next 10 years is $50,000. Unless you found an extremely terribly skilled tradie, who does NOT provide warranty whatsoever, it's extremely unlikely to have to spend $5000 on repair EVERY YEAR. And just because a property is new build, doesn't mean it won't run into issues and require repair either. So this isn't really a fair comparison, because you're immediately putting the older house at a deficit of $5000 every year.
Secondly, the new build property has body corporate of $500 every year. That's pretty low for body corp and most properties that charge body corp would be higher than that. So that's not entirely accurate either. Speaking of body corp, it's a shared cost amongst all the neighbours in that area. Typically, you pay body corp when it comes to an apartment, or new builds that have walls and roof joined together. The problem with these is that if for example your neighbour has a leaky roof, well you might be affected by the problem too and that the body corp for maintenance and repair will basically be shared by the community. Everyone in that community pays body corp regardless if you are the one facing issues or not.
Lastly, the rates on the new build is much lower than the older property. Rates typically correlate with the CV of your property. So it's fair to assume that the older property has a higher CV and probably a higher potential to sell at a much higher price. You should be focusing on getting as much out of the sale as possible, instead of focusing on just swapping the property just because the cashflow in the new build is "better".