Forum Replies Created
Hi Luke,
You may have missed the boat on these areas. I brought my first little house in Kurri Kurri in 1995 for 54k. Conservative value of that one is now 250k.
On a positive note these towns no longer rely on mining and are not mining towns in the true sense of the word. The mines are anout 1.5hrs away by road. The areas rely heavily on service industries and argriculture and tourism. As you would have seen this is wine country and every time you look there is a new resort or golf course getting built. All the support industries are also moving closer to the area.
HEZ has been looming for some time and is coming at exactly the right time. I had hoped that the project would not get launched during the crazy boom that occured last year.
HEZ as you say is the largest project of its type in the country. With the freeway at its doorstep this places this development the same driving time to Sydney CBD as western Sydney so you can see the sort of impact it will have on a town of 10,000 people. It will probably change the face of this whole area.
Unlike many developments HEZ is designed for small to medium operations. The area could support literally hundreds of different small businesses. Pre sales indicated that these businesses are relocating from Western Sydney, Blue mountains and greater Newcastle. The roads are built and it is all about to come online.
If you dont already know land in this council area that is 2a residential and over 1000sqm will support a 4 unit development so you really need to try and source larger blocks. Council was recently talking about reducing the number of units allowed to be built on blocks this size. I am not sure what they have decided. Time will tell what impact the project has on the area. If you are seriously interested I would speak to some of the smaller developers around town to see what the trends are.
Good Luck.
bps,
I have seen a few of these sorts of apartments in the major papers in Wellington and Christchurch and never made any real enquiries, that’s why I asked.
My gut feeling says to stay clear of this type of investment but I am a bit biased. I like to find opportunities where I can add value or properties with a larger land content that might increase in value of have an alternative use.
If you are looking for a property that services your debt only then you should not have any trouble finding a property in NZ to fit the bill.
Hi yack,
Will you post to let us all know when it is time to buy, maybe you can ring the bell for us. No only joking.
I agree with you that it is good to pause and consolidate your portfolio. Fix all the problems whether they be people or the properties.
However, once that is done I can’t see myself sitting on the sidelines for years waiting for the days of 20 and 30% cap growth.
I would rather spend the time getting into some good deals now. I am not talking about buying off the rack and paying asking price for any property in any location. I had not brought anything in Australia since late 2002 and that property double in value in a year (crazy).
The thing is the way I see it is that you build your portfolio over time and of course there is some holding cost associated with holding properties but it is impossible for investors to lob at the bank and say can I have finance for 2million worth of real estate (most people anyway). It’s a bit hard to buy all your portfolio at once at some specified time in the future.
The other thing is that you would need to have the discipline to save the deposits for these purchases.
If you buy over time you get the chance to know the market you are in like the back of your hand. You get the chance to put in offers and buy well below the asking prices and add a little value to increase yield or bank valuation. Sure this is the formula that people have been using for years but that’s because it works. By the time the market starts to move it is too late to get any real value. I would rather have a debt lean portfolio on hand to take advantage of the early capital growth in the cycle and then use the equity in these properties to buy more over time.
I agree we need to consolidate but we can’t just sit on the sideless, where’s the fun in that!
Hi Elbows,
Welcome to the site. This same questions has been asked before and usually gets the response “go and do the hard work and find out yourself”.
Nigel is on the right track with NZ. There are good deals around over here and another thing is that the industry is starting to mature. What I mean by that is that as the level of information availbale to Aussie investors increases they are demanding better deals and receiving better service. If you are looking to buy and hold and make a serious long term investment then now is the time to buy.
One point I would make is if you are thinking about investing in NZ jump on a plane and at least visit each town you wish to invest in. If you do it that way when deals come up you will find yourslef buying three or four rather than getting one deal and losing sleep over it.
Cheers
Yes Dazzling it does get a bit confusing. I (Don) probably spend the most time on the forum but Liz also makes a big contribution and spends alot of time reading and posting. Often we are on the forum together and discuss peoples views ans new ideas that we here about. We are very lucky as the investing is a geniune team effort. Yes it is all very pc around here!
We are investigating some small non ressy deals around areas of nz that we already invest in. The returns seem to be in the 15% plus range and it would be good to get some fixed term leases in the portfolio.
One question then enough of the serious stuff. Do you self manage the industrial tenants?
Cheers
Dazzling,
Good Point and that is exactly why I am interested in the subject. Our portfolio contains a mix of properties including some of the cheaper ones. I was interested to see if any investors would share how the types of properties they hold has changed over their investing career.
Our focus has been residential property with a buy renovate increase yield cap value strategy.
I read that you are doing commercial at the moment and have moved away from residential.Is it the general trend among investors to move away from property as their wealth increases or trade out of larger numbers of low value properties into different classes of real estate.
I wonder if anyone would share their experiences or plans.
Hi Guys,
It is great to see that you are thinking about the structure of your investments. This will become very important as your planned portfolio grows in size and value.
There are many variables to consider.
The best advice I can give is to find a very good accountant and solicitor and go over your personal circumstances and your goals with them.
However, before you do that do as much reading as you can and prepare yourself to ask the best questions and get the best value out of your professionals. This site has links to a product produced by Steve that goes over different structures such as companys and trusts and the advantages and costs of each.
I think it was around $100 for audio and a booklet.
What do we do? The properties I brought when I was first starting out are still in my own name. The lastest properties and our overseas (NZ) portfolio are purchased in a trust structure.
What is the most suitable for you will depend on your personal circumstances so get good professionals on your side now.
Best of luck with the investing and well done for deciding to move forward!
Cheers
On the other hand, the over 25s (and baby boomers in particular) may discover that the fortunes they have reaped from property investing are largely illusory, the under 25s find that house prices have returned to their historic trend (as they always have in the past), and the intergenerational rift will heal.Hi Foundation,
You lost me a bit there. How will the profits become illusory!
Yes Quiggles that is an old number .
It would be good to get a more up to date number re ownership.
With the huge interest in the property market over the last few years you would think that the number of investors owning multiple properties would have increased.
It seems that there are many people on the forum who own more than five. Would be interesting to see how many on the forum own larger portfolios of say 15 to 20 or even more.
Or if people have owned portfolios of that size in the past how long did they hold before selling ??
Hi Guys,
Yes it would be good to find out some specifics about a story like this.
I mentioned this in a previous post but we went to a talk recently and were given a stat that 85% of the complaints about landlords that were serious enough to go to mediation were about Australian Landlords (in southland) . I am not sure why aussies are so reluctant to spend the required money to fix properties. Maybe it is partly communication problems.
However, If this guy really did manage to buy himself a house next to a gang house maybe he is one of the 85% that won’t spend for repairs. You would not throw good money away. In saying that gangs are not a problem in Invercargill so I am feeling that it was something that happened in the North? Which town???
Cheers
but my non-ressy tenants I haven’t spoken to since we negotiated the lease in October last year. I am just enjoying seeing the rent go in the bank…JKM raises a point that is probably one of the biggest mistakes we made very early on.
Ignorance is not bliss. Just because the rent is coming in and the management report read okay does not mean all is well.
Get hands on and have a look at your properties.
Cheers.
Hi Sg,
People say money follows management! Tenant selection, maintenance, maintenance programs, insurance, (landlords and building), finance (product selection) finance (debt reduction), record keeping and accounting, monitoring capital value and rental yields, meeting tenant needs to increase yields, exit strategies. You need to try and do everything you can to add value to and increase the yields .
Slection of professionals to be around you will be critical. Investigating and or creating the correct sturcture. Basically treat each property like a small business and be very business like in your approach.
We are in the process of examining our entire portfolio and doing detailed profiles containing everything you would ever need to know about each property. We have the indentified the potential of each property and out goals for it.
In 2003 we investigated and set up a structure in NZ. We did not buy our first property here until March 2004. We are currenlty holdinng 8 properties here without using any of our equity in our OZ portfolio. Each property stands alone so as prices rise so does the overall equity. So we have spread the risk around. We have two seperate portfolios both of which are postive cashflow ( if you excluded our former PPOR). The NZ and the OZ properties pay for themselves and are showing capital growth. Investing in this way has given us the freedom to leave our paid jobs. We still have the security to return if we need to but that option seems less likely all the time. However, we are still very busy investing and concentrating on the portfolio.
Plenty of people will advise you on your properties and many parties have an interest in your portfolio ie managers, the bank etc. However, you are the only one that has made a serious capital investment and have the most at stake.
Insist on the highest standards for your property in every area.
Good Luck.
