Forum Replies Created
Hi all,
Just read this thread. We are both 32… so now we are feeling very old in the present company.
All I can say to you little spring chickens is that momentum is very important. It is okay to start early but make sure you keep up the investing as there are so many distractions out there for people in there 20’s. (Especially if you have a little equity or cash in the bank).
Don’t worry about negative noises from your peers.
Make sure you turn the property investing journey into a fun one and if you can involve your family.
And don’t worry cause when you get to the ripe old age of 32 you will still feel 21 so no need for an early mid life crisis.
Oh, don’t put to much pressure on yourself to retire by 29 or something crazy like that. If your goal is unrealistic then you may burn out.
cheers
Hi Dazzling,
If a 100K house is your pride and joy that you are struggling to pay off, it is probably inappropriate for me to term them as such…even though that is how I would accuartely describe them.We all have to be careful on these forums not to make assumptions about the other contributors experiences and so on.
The tenants pay off our houses and capital growth takes care of the rest. This may not be everyones experience with RIPS but that is the way it has worked out for us.
Cheers
Don & Liz,Who said anything about tying up your entire net worth in one building ?? What are you talking about ?? Owning a 13 MM block doesn’t preclude you from owning other assets ?? You need to widen your scope just a tad.
I’ll give you that one Dazzling! I don’t mind saying that my net worth is not 13 mill and this is probably why I was thinking that way.
But there are some other issues with the corporate tenant. eg It may be hard to recover funds or rents from structures that no longer exit or go into bankruptcy. Individuals will also default but going into bankruptcy due to rent arrears is probably not that common (i’m guessing).
In previous posts you have mentioned investing as a group in these sorts of investments which is probably the way to do it.
In fact I would probably swap one of my poxy houses for a share in this sort of investment. Probably more for the experience I would gain rather than anything else.
So how about it? A few of us can sell one and get together and buy an office building (just one to start).
Or there is the other option of a margin loan and lpt’s. That does not sound like as much fun though!
YES! THAT IS YOUR PREFERENCE BUT HAVING MY ENTIRE NET WORTH IN ONE BUILDING POSSIBLY AT THE MERCY OF A SINGLE TENANT? THAT WOULD BE CRAZY. NO THANKS
NO CHANCE TO SPREAD RISK OR TAKE ADVANTAGE OF DIFFERENT CAP GROWTH TRENDS IN DIFFERENT AREAS OR CLASSES OF INVESTMENT. HAVING YOUR ENTIRE WEALTH FIXED IN ONE INVESTMENT IS PROBABLY A BIT QUESTIONABLE.
CHEERS
2) There is a set of 3 x 2 B/R units for removal 1 kilometre from this block. (You can see where this is heading!!) I am currently in negotiations to purchase the building for $25,000.Hi Guys,
Enjoyed reading your post. I wonder what is going on at the original site. Are you aware what is planned for the land that the old units are on? Why are they being moved?
Cheers
Great Post!
– Don’t guess what tenants and buyers want. Ask! Plan project around the yield and capital maximising improvements.
-Don’t over capitalize
-Everything is negotiable and negotiate with a smile.
-Keep a clean, safe and organised project. You don’t want to see a plumber or electrician with a broom in their hands.
-Choose finishes and fittings that meet your market. View as many similar priced homes and match or exceed that visual.
-Pay your people on time – you will want repeat business and build good relationships.
-Keep accurate records and monitor your budget
-Get access during the settlement period for estimates and selected repairs.
– Be very careful about colour in the project.
-If your own work will not exceed the standard of the pros pay someone to do it. The last thing you want is an obvious DIY job. Don’t kid yourself because you will be decreasing the value of the home if your don’t meet the right standard.
-Meet the valuers on site if possible. Listen to every word.
-Be aware of the impact of weather on your time budget.
and have lots of fun!!!
Cheers
Hi K3ymaker,
It will depend on your mind set or strategy. Our personal preference is to buy rather than sell. We would only ever consider selling under exceptional circumstances. Not to say we have not sold property before!
Waiting for the market to bottom out is a fools game. Do some DD and get into property now. There will always be some new excuse. Once you think the market is at it’s bottom you may find yourself waiting for things to pick up. People will tell you that there is no point buying until prices are on the rise again.
Some of the investors in my family still own every property they have ever purchased. Others only ever hold two properties at a time. However, everyone is still active in the market and doing well out of it.
As for the “market” – it does exist. Next time you go to an open house you will see the market of potential buyers for the class of property you are looking at. The “market” is the people.
cheers
Since you’re already there, maybe you could consider property management as a part time job??? We certainly need reliable ones!Very interesting idea Dr X. . Will have to give it some thought. In the meantime we are happy to help with any specific problems if you want to pm us as we have good contacts re local tradies and discounted material/second hand materials wholesale paint etc etc the list goes on. Could easily manage small reno’s or get some problems fixed!
There can be a laid back attitude towards management in some of the areas we have invested in and this includes Invercargill. We pencil in a day on the calender or in outlook etc an call each manager every 14 days and more often if there are issues. (you also get all the local gossip which is very helpful when you may not be around)
Generally, we will not rely on email as a form of communication but use it set the agenda for upcoming conversations. Never assume that a phone message has been passed on. The more effective the communication is between you and the manager the better for everyone. Since we have adopted this approach we have not had a single problem and there are no surprise repairs etc.
Cheers
Hi Milly,
I agree with you and Dazzling about the mechanics car thing.
I grew up in a builders home (builders son). The old man specialised in rehabs and cottage work after doing 20 years in “town building”in mining communities. So when they settled down the home was a constant work in progress.
Not so much that there were alot of unfinished jobs just always a new job being started or a new plan drawn and submitted to council.
All these jobs were done when we were tired (yes I was made to help) and had gotten home from doing all our best work at other peoples homes. The other thing is that because you have the knowledge there is no excuse when the spouse wants an new “thingimebob” built somewhere.
I think like many families we spent most of our quality time at work. ie renovating and investing (when the family started buying their own homes to fix) became a team/family sport. Holidays and weekends were spent on site with teams of builders and plumbers and mates who professed to have a skill in some particular area. If we were not doing that we would travel around to open homes trying to find the next project and talk with agents etc.
So Milly you are right. Many of us probably live in homes that need a little more tlc. Makes it all the harder when tenants make their little noises and the home they live in probably has a better paint job/bathroom/kitchen then yours.
The good thing is that we love it so it hardly seems like work. In that way we are lucky!
Cheers
Hi Guys,
We are based in Invercargill now as some of you know. We are still buying in this city and have found that good yields are still available. I suggest anyone thinking about buying in Invercargill jump on a plane and fly down here and or get on the phone and speak with some local agents.
If you are an investor interested in a cities fundamentals you may be pleasantly surprised when you finish your due dilligence.
We could talk about some of the cool things going on down here but we are biased coz we live here and own property in invercargill. Best to find out for yourself.
Cheers
Nice post KP. Heaps of detail in there already but could you share what sort of house and land you rolled the profits back into. Are they single homes on blocks of seperate title or have you split another block/s and built dwelling on each.
Promise I will contribute a story soon!!!
Cheers
Just a few things to add re capital gains tax and the local buzz around at the moment.
As some of you know election time is looming in nz and parties are talking about the possibility of a capital gains tax for kiwis who own foriegn assest ie kiwis who own homes in OZ and shares etc.
Initial discussion has indicated that this should place positive pressure on the price of local assest, ie increase demand for local (tax exempt real estate and stocks etc. Time will tell.
This mornings business report stated that the market has started to factor in a rate cut early in the new year or later this year.
The NZ dollars is moving lower against the majors so it will be interesting to watch currency movements over the next few days/weeks.
Cheers.
Imagine how much you can achieve in three years……exactly KP. Also imagine how much you can learn in that time.
Real life, deal making, problem solving experience. Three solid years of it.
You will be way ahead of the pack.Cheers
Hi All,
As some of you know Liz and I have moved to NZ. We have not brought a property since we moved here but still consider ourselves buyers not sellers. In fact, we consider ourselves investors rather than speculators.
I imagine there will be some changes in our portfolio over the next two years but our holdings on NZ property will increase rather than decrease.
Our position in the NZ market is based on the fundamentals. That is, the economic fundamentals ( I knew I would eventually use that degree for something.)
However, rather than go all mirco/macro on you all I will describe in laymans terms what I am seeing “through my eyes”. Some people will interpret this next comment the wrong way, however, investing, especially property investing is not an exact science.
The numbers are crucial but if you spend all day listening to commentators and so called experts all you will ever be is part of the crowd. You may take some small profits along the way but when you have those dinner table conversations (spin forward ten years) you will probably be the ones saying “Ã wish I still owned the property at such and such, Imagine what it is worth now”, maybe I could retire!” Or “I wish I had brought 6 in xville and not 1, why didn’t someone tell me the new freeway/developement/zoning change/tax regime etc etc was about to come online.
Perhaps the days of treating the NZ property market like an offshore equity fund are over. Now maybe some serious property investing can take place.
So, we are still buying but buying quality properties “Keepers”.(that is our position) We are fixing the problems that come up along the way and adding what we like to call “real value”. That is, changing our properties place in the rank order of properties for that suburb. ie moving ours up the scales of desirability. Make the properties appeal to owner occupiers, investors and tenants. You can then use this increase in equity however it best suit your investing needs.
Cheers
AM I BEING TO NAIVE?????? Please let me know if I am. The way I read the insurance policies, if a tenant punches a hole through a wall, the insurance will cover the repair cost and the rent while finding new tenants.Hi Simon,
Remember most of these policies require that the property is uninhabitable before they will pay out for loss of rent. I don’t think a hole in the wall would qualify.
The excesses on my current policies are $500 and $250 and as Westan said each incident will require a new excess.
Also if your property manager fails to do the proper inspection or issues a wrongly dated arears notice the insurance company wont pay you a pinch.
So my opinion of these policies is that they are an essential part of the risk management of your portfolio. They do not replace good management, tnenat selection and proper maintenance.
Good luck with the investing.
Hi Lisa,
We have done this before and it came up looking great.
Rendering is much more difficult than bagging and I would not attempt DIY rendering of the outside of the premises as if may come up looking a bit worse than before as some of the others have said.
So I would go for the bagging option. To start with you need to make sure the bricks are sound. before you start make sure you wet down the wall that you are doing and do one wall at a time.
With bagging it is best to add the colour as you go so buy some coloured oxide and add it to the mix.
To maintain the colour consistency use buckets to mix the mortar so the proportions of sand, cement and oxide remain the same.
Also you will need to paint on some bondcrete and add a bit of bondcrete to the mix as you go. This will ensure that the walls remain waterproof and will stop the mortar cracking.
There are a few roll on products around that will give you a textured finish without going to all that trouble but the result on an old house may not be as good.
Good Luck
