Because I have a lot of deals go over my desk at the moment, I’m seeing a bit of the NZ market right now.

I’m shocked at some of the things Australian investors are buying.

Agents know that Aussies are willing to buy sight unseen, and are usually prepared to buy (funnily enough) at Steve’s 11 second solution calculation! (around 10-10.4% yields). These deals are being snapped up within days – often with 2 or 3 offers within a day if the listing agent knows a few investors up north or across the Tasman.

Chatting with an agent I know in Invercargill (way down in Southland), he’s now saying that with so many investors hitting the market, it’s begining to get harder to rent properties.

This is not to say that you shouldn’t be buying in NZ (or that you SHOULD be buying for that matter)

I would recommend that anyone looking to invest (in NZ or otherwise) take on three key points.

1. Always, Always, ALWAYS do your due diligence – get something which backs up every assumption you have made.
Put clauses on the contract which say you won’t settle until these assumptions have been proven.
(PS – don’t just put in a finance clause and have this cover everything. Often this loses you credibility – be honest and transparent right from the start, and more often than not the Agent will do whatever he or she can to help you, and get the deal across the line)

2. Consider bringing someone onto your team who knows a little bit about the market, and can understand how the subtleties work. Perhaps a bird-dogger like Tasman Investor or Mini in the North, Westan or Myself in the South.
(Don’t be a tyrekicker and pump these people for information though – if they’re good enough to help you and be on your team, they’re good enough to be paid for their time.)

3. Don’t get swept up in the deal. There’s kazillions of them out there – in Oz and abroad. Even though people like ‘Tasman Investor’ talk about changing their investing criteria because too many deals are slipping through his fingers – this doesn’t mean you need to go for the first positive cashflow deal you see.
Positive Cashflow deals are not scarce – and neither are investors whom agents know can be whipped into a frenzy and will possibly make a bad decision.

So keep a cool head, and know what you’re getting into.

Brent Hodgson
PropertyInvesting.com
Admin Manager

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