[youtube id="DZDqQW2CIZg" align="left" mode="lazyload" maxwidth="500"]

Would I buy a positively geared property in New Zealand or a negatively geared property in Brisbane that needed to be subdivided into 3 townhouses to be positive cash flow? WWRD?

Hey and welcome to another episode of What Would Ryan Do, the series where you ask me questions and I give you my perspective and what I would do in this situation. This is not to be considered financial or mortgage advice, just so you know. It is just a little bit of fun. So the question today revolves around whether or not I would purchase positive property in New Zealand or negative property in Brisbane but there are some caveats to it. So let us go ahead and have a look at the question today.

Would you buy a property in a smaller city in New Zealand with a 10% yield or a negatively geared property in Brisbane that needs to be subdivided into 3 townhouses to be positively geared?

The answer to this one for me is very simple. I would actually probably purchase the one in New Zealand. Let me give my reasoning behind it, and I am not saying you should do this because it all depends on the person.

Now, if I was to go ahead and purchase a property in Brisbane that needs to be subdivided into 3 townhouses, what I am guessing you are saying is that you are either buying a block of land or you are buying a house that you are going to demolish. You are then going to subdivide and build 3 townhouses. First of all, I have never done a subdivision.

I have never done a demolishment. I have never got approved, I have never built 3 townhouses, and I have never even built a house or worked with a builder to build a house. So, all of that just sound too difficult. Would I purchase property in Brisbane that was positively geared or that I could turn into a positively geared property easier than that, yes I would. I do not understand the whole concept around your need to subdivide it into 3 townhouses in order to achieve your positive gearing. Whereas you are talking about a smaller city in New Zealand with a 10% yield, that is looking more attractive to me.

Firstly, let me just say I would need to research the New Zealand market, which I have not done at all, not at all, I have not looked into that market. I do not know how it differs from Australia. I do not know what it is like at all. I am not sure what you mean by smaller city. I am guessing you do not mean Oakland or the large hubs - what is there? There is Oakland. There is Queenstown. There is Christchurch.

There is one that my cousin lives in that I should know where it is, Wellington. Okay, I’m guessing you are not meaning one of them. You are kind of meaning a smaller regional center. I recently went to New Zealand and I absolutely love the place. And so if I have an excuse to go to New Zealand to research the property market over there and to look into that and purchase it, would I consider it? Absolutely!

You also need to take into account when investing in New Zealand, things to do with currency. Or if I am going to be living in Australia, how is the New Zealand currency going to change, how is the Australian currency going to change? Because if I invest in New Zealand and the New Zealand dollar outperforms the Australian dollar, then that is great.

I am making money on currency. But my property could do really well but the New Zealand currency is dropping below the Australian currency and then my property is becoming less and less in terms of Australian dollars. So that is also something that you need to take into account. But I do like the idea of having like a global asset based on diversifying things, having some in New Zealand. So if we do have a property bubble or do have a crash in Australia that some people are talking about, then you are diversified and you have something in other countries.

Again with New Zealand, I do not know how you get approved for finance and all that sort of stuff s...