Frequently Asked Questions

Key information

Who can invest with us?

Our offers are not open to the public.  We only allow investment from the following:

  • Investors that are well experienced in these types of investments or have experience and qualifications that enables them to fully assess the merits of the investment based on the information we provide;

  • High net worth investors that have net assets in the last two years of more than $2M or have held or invested in investments of more than $1M in the last two years; or

  • People who invest more than $750,000.00.

  • Relatives and close business associates of our directors;

What are the likely fees, expenses and costs?

There is an initial fee that covers the finding and securing of a property, all valuations and due diligence research, finding investors and setting up the Limited Partnership.   The initial fee is to be found within the cash flow forecast of each promoted property.

There are also ongoing fees relating to the property management and accounting and statutory matters.  All fees are detailed in the cash flow forecast and the management deed.

What might the principal risks be?

All buildings have a comprehensive insurance policy.  This is paid for by the tenant.
Other risks of property ownership: -
-  loss of tenants / income in relation to the property
-  movements in bank interest rates

What is the projected cash return?

A regular monthly cash payment based on the capital invested is paid to the investor.  

As the rental returns are projected to increase over the years there is an annual cash surplus predicted.  Each year there will be an AGM investors will decide whether to distribute this or retain it for the future.

Please refer to the property specific cash flow to see predicted returns.  The projected returns do not include any allowance for capital growth.

The returns are not guaranteed by any person.

Under what terms can I sell my share of the investment?

Partnership shares can be on-sold at a property valuation determined each year less a handling commission of 2% of the sale price.
First option to purchase shall be given to existing investors then to new investors.  It is common in property syndicates for the remaining partners to buy out a departing partner.  If this happens it can be a relatively quick and simple process. 

Is there a time limit placed on the investment?

DABS Consulting investments are intended to be long term.    The property can generally only be sold if greater than 75% of the investors so chose.

  

What is the business structure?

Typically a Limited Partnership is established as owner of the property.   This is a simple structure which has two important features.   A partnership is not taxed upon income.   Rather the proportionate share of the income is passed directly to the investor and they look after the taxes in their own returns.    All investors have their own specific tax position.  Secondly a Limited Partnership is similar to a Limited Liability company where the partner’s liability is limited to the capital invested.

Who manages the property and tenants?

DABS Consulting and the Limited Partnership are contracted by a Management Agreement.  This ensures that DABS Consulting manage the property in all aspects ranging from day to day contact with the tenants, maintaining the building, accounting to the Partnership and liaising with the investors.  To maintain consistency there is an initial five year contract in place.

Within DABS Consulting we have considerable experience in property selection and management and have other expert resources to call upon if required.  We use OPM property management software to efficiently work with tenants, building upkeep, invoicing and partner reporting.

How do I register my interest?

Once you decide that you are interested in the business model please contact one of DABS Consulting directors.  We will inform you when we have found a building that fits our strict criteria.   You would then receive information to enable you to assess whether the current offering fits your portfolio.   We suggest you read through the information on this website and follow this up with us if you have any queries and would like to meet us.

What information will I receive to assess the property?

When we have a suitable building we send out an information package.  This contains a key Information summary, a cashflow budget, a valuation summary page and an application form.   We have other information you are welcome to access.  This would include the full valuation, the legal due diligence, and so on.  It is important that you have all information available to be able to make a considered and informed judgement.  We do not produce a prospectus for each property so it is important that you have access to as much information as you need.

If I wish to go ahead what do I do?

Once you have decided to go ahead with a particular property then you will receive a draft of the Limited Partnership Deed and the Property Management Deed.   Also there is documentation to complete relating to your investment.   As this investment is only open to those categories of investors set out at the beginning of this FAQ, we need to obtain appropriate certificates or confirmation from you to ensure you met the criteria.  We will explain this in detail when we get to this stage.

What are my tax obligations?

Under New Zealand tax laws a Partnership does not pay tax.  The partners pay the tax.  Therefore after the end of each financial year, being 31 March, financial accounts are prepared for the Partnership.  The taxable share of each partner's income is detailed in these.  This then gets returned in the tax return of the investing entity whether it is you personally, a trust or a company.    

An overseas investor is required to pay tax in New Zealand on this income.  If this is your only New Zealand income your tax rate is likely to be 17.5% or 33% depending on your structure.  We are happy to discuss this with you.  If your tax resident country has a Double Taxation Agreement in place with New Zealand then  it is likely you will need to declare this income in your own tax return and will receive a full credit for any taxes paid in New Zealand.  However it is important to discuss this with your financial advisor.  We do not purport to have any expertise in foreign tax regimes.