"We are aware of the growing number of investment opportunities being offered to people as the Christchurch rebuild gathers pace. Our message to potential property investors who are being targeted by advertising to attend property seminars is that they should seek legal and financial advice."
"Investors need to understand fully the costs of property ownership and debt servicing and the risks of losing assets used as security. While property investment in itself is not regulated by the authority - as opposed to proportionate ownership schemes which are - investors should seek advice from an authorised financial adviser," an authority spokesman said, directing investors to the authority's website.
Kwasza said her scheme was aimed at helping Christchurch recover and investors were needed to buy the houses.
"Domain Consulting are actively seeking foundation investors to build quality permanent homes that will transition into family homes after the rebuild," a promotional document said.
"A restraint to the rebuild is finding accommodation for the 15,000-plus workers coming to rebuild Christchurch and 20,000 houses need to be built." Floor plans were shown for properties with corporate lease for 3 to 5 years at 9.7 per cent yield.
"Your chance to financially benefit from the construction boom. Use surplus rent to reduce debt," the material said.
"We have two kinds of homes: six-bedroom, three-bathroom homes that can easily convert into a four-bedroom home after the rebuild and a four-bedroom, four-bathroom executive home. The location will be central CBD, also in Wigram and Silverstream Estates in Clarksville."
How it works
*House purchase price $640,000
The Sums
*10 per cent deposit, borrow $576,000
*Fixed three-year term. Interest rate 5.9 per cent
*Three years, paid off $93,000, owe $482,000
*Five years, paid off $166,000, owe $411,000
*Estimated rental income at end of 5-year lease: approx $800/week or $41,600/annually
[Source: Domain Consulting promotional document]
