Hi everyone,
Just wondering if any of you have had experience with buyying into housing commission areas. Would like to hear your experiencecs good and bad with tenants, capital growth , property management etc.
Thanks in advance for your responses.
regards,
karinaHi karina
i’ve bought heaps of houses in housing commission areas (probably about 20 in the past 7 years), but your question is really hard to answer as some areas are fine others are very bad. local property managers will give you great advice.
i make it my policy not to buy the worst street in a town/city. Often they are good solid homes that are very low maintenance.
As far as capital growth goes, these types of homes have appreciated incredibly over the past 5 years, they are so called low capital growth areas but it is a little know fact that they have outperformed the so called high growth areas. But what of the future ????
all the best
westanI live in New Zealand and for a fee find cash positive deals there, email me at [email protected] to join our database
Yes Westan is spot on, this whole community that is housing commission 10 minutes from me, where people rent from the gov and also buy from the gov has gone up exponentially.
3 bedroom, 1 bathroom, 10 sq. house 6-700sqm block;
Prices 5 years ago- $50 000
Now- Be lucky to find one under $200kMOH houses Rock !!
They’re solid and can be tarted up and come up a treat, great for starting out
karina,
I mean thiswith all due respect- forget the past- think about 2004 if you’re going to buy now. Almost all areas have had CG over the past decade- HC and non-HC. Past performance doesn’t mean future gain etc.
karina, with all properties, I think there’s a few things to think about. I gueass you want some sort of guaranteed rental- or the IP is adead weight. This is probably where a bit of local knowledge comes in (or fining someone who lives in that neighbourhood to tell you it sucks or doesn’t suck). Eg… I was speaking to a property investor who said he had bought up a lot of IP’s in an area I know very well. I said to him “let me guess- Blah Street…” and yes, he had bought places in the worst part of the area. The absolute worst! Everyone knows not to buy in that part of town- but he just worked on price. RE’s in the area know that tenants will move out as soon as their short-term lease expires- even if they don’t know the area, because the crime and environment is such a shocker. I’m not suggesting here that all HC houses are in shocking areas- no way. What I am sayinhg is that if you are buying a really cheap house… then it is often cheap for a reason- and local knowledge is essential.
As Wallflower said, these buildings were often very well built, so your BPI may come in healthy
But as to tenancy and associated problems, it is the LAST thing we need- to be in a constant state of worry about our houses.
Having said this- hehe… you could have an IP in a blue-ribbon part of town and the tenants- having snorted too much cocaine off the bauhaus table- may decide to redecorate and rip the walls out
kay henry
Hi guys,
Used to live a commission area, did it up, sold for nice price, and quickly got out of there!
Just kidding, I was there for 11 years!Anyway, a small point I want to make.
My husband and I are self-employed and when we first started in business, we tried to target the more “affluent” suburbs for work, definately no commission areas. We did this on the belief that, people with more money were more likely to pay, and pay well. Big mistake!
I can confidently tell you that…People who appear to be the least “well off” will pay you first. People who appear to have money, will haggle and drag out payment and perhaps not end up paying anything at all.
(I realise that this is a mass generalisation and I really don’t want to offend anyone, just trying to dispell the myth about “areas”)I guess my point is mean’t to be, people in commission areas are, in my opinion, more likely to pay their rent.
Cheers,
Sue [biggrin]
That was long winded…..“Be careful not to step on the flowers when you’re reaching for the stars”
Hi sue
thats some interesting observations and comments, i know people who have what i’d consider quality houses as investments and they have about the same problems that i have with my low income tenants. BUT there are some areas that are going to be worse than others.
regards westan
I live in New Zealand and for a fee find cash positive deals there, email me at [email protected] to join our database
I think it’s often a matter of affordability in rent. Generally, community housing organisations have said that 30% of income is ok not to put tenants into “stress” when paying rent (or mortgage). If a benefit pays about $200 a week, then I guess it depends on how much we are charging tenants for rent. If we are charging them $150, then obviously they are going to find it hard to pay rent and live. If a person is earning $1000 a week (net) and we are charging them $300 a week rent, then they are going to be under less stress to pay- just on the pure numbers, but if we charge anyone a high % of their income, they will struggle.
If landlords charge unemployed people huge rents, then they can end up homeless- just so we can add on that extra % to our cashflow.
And yeah, diclem, some people are bad tenants or disorganised. I know for me, I get my rent taken out electronically, because I am never organised enough to pay it.
kay henry
You must be logged in to reply to this topic. If you don't have an account, you can register here.
