By Cam Harper*
For decades owning property beyond the family home has been an almost sure fire way to make money in New Zealand.
In fact, for many people property has been a central part of their retirement plan.
But as house prices fluctuate and other market conditions change, for many Kiwis owning investment property isn’t quite as alluring as it used to.
If you are relying on investment properties as part of your financial plans, it’s always useful to get personalised financial advice for your situation.
However, my team and I are seeing Kiwis adjust their property investment strategies to give them the benefit of investing in property, without the hassle of actually owning property.
We’re focused on giving Kiwis investment choices with good returns and tangible security.
Investment choices with good returns and tangible security
You don’t need to own a property to make money off houses in New Zealand anymore.
With more than 25 years’ experience, we run a specialist lending division that identifies high quality, short-term lending opportunities, across residential housing and construction projects.
When a loan application passes internal approval processes, we lend our own money to the property owner and then load the loan up on our secure online portal for investors.
We lend at conservative loan-to-value ratios of up to 65% of the completed value of construction projects and up to 70% for residential refinance. This gives investors a buffer if things change during the loan period.
It’s these loans in houses and construction projects that Kiwis invest in. Kiwis don’t invest in Southern Cross Partners. Instead, they choose the specific project they want to put their money into.
Currently, investment interest rates start from 6% per annum, but these are subject to change and availability.
Click here to find out your potential investment income.
What we look for in our investments
Most of our loan applications come through mortgage advisers that we’ve worked with before.
Generally speaking our customers can’t get lending through banks for legitimate reasons and come to us for a short-term loan to see them through.
We are very careful about who and what we lend on. During the last 25 years, our cautious approach to lending has served us well, and our investors well too.
Before approving any loan, we need to know how a person is going to exit their loan with us and when that will be. That way we can tell investors what our investment timeline is.
Here are the main ways that people exit their loans with Southern Cross Partners:
Bank transfer. After a year of working with us borrowers have got their finances in order and are ready to move to a traditional bank.
Asset sale. This is a common clear exit strategy, particularly with our construction clients and people bridging between houses. They sell the properties they’ve built or bought, and then they are free to start on their next project.
Refinance once consented. We’re finding that the banks are generally unsupportive of construction projects prior to consents being issued. We work with borrowers to give them the funding they need to secure the property. Then once borrowers have sorted through the necessary steps to start construction, they move to get traditional bank lending, or wrap it into other debt they have.
There are a myriad of other exits at the end of a loan term, which is why we always start with a conversation about what the borrower is trying to achieve and what their plans are after the loan.
To learn more about Southern Cross Partners’ investment opportunities click here.
Disclaimer: All investment opportunities are subject to change and subject to availability. Southern Cross Partners Ltd is licenced to provide Peer to Peer lending services under the Financial Markets Conduct Act 2013. This article is general in nature only and has not taken into account any particular person’s objectives or circumstances. We recommend you speak with a financial adviser before making any investment decisions.
* As Managing Partner of Southern Cross Partners, Cam Harper leads both the lending and investing sides of the business. He is passionate about helping New Zealanders achieve real financial freedom through specialised lending and secured investments.
