Back for New Zealand

Hi Westan,
congratulations, I am very happy to hear that some Aussies are thinking of moving to NZ as you hardly hear of that happening – mostly the other way around! *insert twee smiley face*

I’ve got three now, just about, all in regional towns in the North Island. I have to say that about two months ago i felt like I was the only person looking and there seemed to be a zillion deals, but there are a few less because a lot of people (several from this forum that I know of, and probably others i don’t ) have been buying up large, several at a time, because it’s just so d#$mn cheap! and like Westan found, the returns are there.
As a Kiwi I have an advantage in that I know the country, more or less, but I have to say that before i looked back home I looked here, and just couldn’t find the yields or the affordability, really. I mean you could get three for the price of one in say Goulburn, over there. Even if I did find some fairly good yields here it was a bigger risk because of more expensive property, and in the end for my first foray into the market I picked a house that cost me 27K and is rented for 110 per week, to some long-term tenants who signed on for a year. Where you ask? Half an hour out of Wanganui on the surf coast.
as far as capital gains go, that information is published i think every month in the KPI magazine (kiwi property investor magazine) and their website is
http://www.kpimagazine.co.nz

they do mail subscriptions out to Aus and i would highly recommend it. Only seen one issue but there is so much in there re lawyers, accountants, finance, and the usual info about where to buy etc.

Me personally- I’m trying to start with a few cashflow positive properties with as high yields as i can get, and work my way up with the bank’s help to some capital gain places later on.

the Auckland area is going really well if you can afford it, it’s not quite Sydney for cap gains, but it’s definitely going that way. In a lot of ways i think NZ is several years behind Aussie so whatever is happening here will drift across the Tasman eventually.

i get the feeling that houses will never be as cheap as they are now, in NZ. Even though i’m not buying in towns for capital growth (and people i know with properties rising like mad can’t quiteunderstand why i’m buying where I’m buying – *insert mad and tricky grin face* ) I still feel that this time next year, you won’t be able to get a property for 27K, it will be 35 K, and that’s a gain of 20 something percent. Let’s see if i am right! but if I am sooo wrong and everything goes down a bit, who cares, because the rent yield is still as good as it was when i bought it…maybe better cause you can put the rent up a bit each year in line with inflation.

i haven’t had any problem getting my first house rented. (second house is a saga all on it’s own, i will tell you if you’re interested- next time – and the third house hasn’t settled yet. but we think we have a tenant already!) Back to the first one. Even though it was in a town with only about 3500 people, and I was allowing 4 weeks to get a tenant, I advertised it for 120 and the first people who looked at it wanted it, the agent turned them down (didn’t like the look of them!) and then the second week, a couple bargained me down to 110 but signed on for a year, and said they may want it for up to three years. (Share-milkers! ) It seems to me that the small towns aren’t as depressed as they once were, you can’t even get a plumber for weeks or months these days, explained to me by the fact that farmers are having a really good time lately after 20 years of struggle and there is a backlog of 20 years worth of kitchens that are being put in, etc. it seems that little shops in the main streets are full. It does pay to do the due diligence on whether it will rent – but as Steve says, any place will rent at the right price – just drop it a bit and you’ll get a tenant. Also i like David U’s idea of asking a competing real estate property manager what they think the house will rent for, rather than the one you are buying it for. You can look at the market rents for the various towns in NZ here

http://www.minhousing.govt.nz/tenancy/Market-Rent/market%20rent%20region.asp

it’s as up to date as anything because it shows the bonds lodged.

the web site to look for the deals is….and I mean *the* website….is….

http://www.realenz.co.nz

There are others such as open2view.com
who seem to have (in general) more upmarket homes, however the first house i bought which certainly wasn’t that upmarket was on there too complete with a virtual tour. so handy! however the same house was listed for 44 on open2view and only 33 on realenz. (i think it was on the market at least a few months while i was watching it, and the kept reducing the price on realenz but they still had the original price on open2view. i only discovered open2view and the vitrual tour after i’d put the offer in and asked the agent for more pics, so i was well pleased that i’d seemingly got even more of a bargain than i thought.)

so yeah – capital growth, check the latest figures in KPI magazine, or check out where richmastery.co.nz are finding their deals. they have two types of deals (might suit the person to nervous to look themselves, use a property finder service, and this outfit is really good, as far as I know, i know someone who bought a property from them as he was too busy to look himself. ) Anyway richmastery have cashflow positive and capital gain deals, colour coded green and purple i think. Their criteria for capital gain is the area must have had higher than the national average growth for 10 years, for 5 years, and for 1 year. only then does it qualify. So you could maybe tell where some of those areas are just by looking where they are finding.
as far as tenants go just do all the diligence you can. One town where i thought it might be tricky to get tenants turned out to be the opposite, the agency had two people a day coming in to rent houses and they had no houses for rent, as in, zero!!! Same thing in another town a friend has bought in, the agent said ‘I had a house for rent last week, not as nice as the one you’re getting, and i could have rented it three times over in that time’. Not bad for towns with 1500, or 3500 people. there are more people in the world every day and I guess that even eventually affects small town NZ.

end of rant!!
Cheers-
mini

http://www.vocalbureau.com

I see BIG $$$’s for the person who gets in and buys 100’s of $20,000 properties this year. Remember there’s no capital gains tax or income tax over there!

Hi Harris,

Search the forum for previous posts on investing in NZ, the finance side of things has been covered a few times in good detail.

Short answer though – yes. The major Aussie banks also have branches in NZ and are willing to lend Aussies usually around 80% LVR on NZ properties.