Forum Replies Created
Thanks for that Wilandel.
I hope people pay attention also as they will get seriously burnt in the future if they don’t.
Plus if everyone started to do their due diligence the prices of property would not be skyrocketing and there would still be deals around for everyone. As you said on one of your other posts you could not find any deals around when you were in Tokoroa. I think you were there a couple of days after we left and there was not much around for us either.
What put me off was the lists as long as your arm of houses with no tenants in Tok, unfortunately one of those is mine around 6 weeks now.
A great deal is not a great deal if you are without a tenant, it is a liability.[One house that we bought there at the start of the boom had been on the market for 7 years!]
Well, how things have changed, every deal we have going at the moment has backup buyers waiting in the wings.
All the best.
KerwynHi Jet
I seen to be missing the doggies are they still around?
Kerwyn
Go the Sharkies.Hi All
I have run my own business for 30 years dealing with all kinds of individuals and Ridi your pizza idea is not that bad.
I have learned that if you give something free you get it back 10 fold. I had a Ski hire in the Snowy Mountains for 6 years in what people called a bad position, wrong side of the road for people coming from Sydney. I started to give little things like a free toboggan to the kids when their parents hired skis, this cost me $3 each child: but guess what! People told their friends and they started coming into my shop and before I knew it I had heaps of families turning up, my business doubled in 1 season.
The trouble with most things these days is that people are too greedy. They try to ring every last dollar out of someone and forget that if you are in the service industry you should be supplying a service. Being a landlord is supplying a service you are supplying a place for someone to live, so you are in the service industry.
95% of the time if you give a little something like a pizza it is really appreciated by the majority of people and they will do the right thing; but there are a small percentage of people who will not conform even if you gave them a new Volvo free: that’s the way it is with us humans.
So Ridi keep thinking of the pizza ideas and you will get a bunch of happy tenants.
Kerwyn.[biggrin]Hi All
To anyone who is worried about the vacancy rates in any town you visit, simply go into the RE agent and ask if you can rent a house, but don’t tell them you are investors. They will only be to happy to tell you what they have. If they have a list as long as your arm like Tok and Invercargill then you have to make up your mind if it is the right town to invest in.
I was in Te Kuiti 2 weeks ago and they had a list of people looking to rent a house. I couldn’t find any thing there at that time that met my strategy but it could be different when the KA2 gets there. One tip for Te Kuiti make sure you calculate the rates into your figures. Te Kuiti has to be the dearest town for rates in NZ, nearly double that of Tok.
KerwynHi All
Couldn’t agree with you more Wilandel about subject to valuation clause. If anyone buys a property with out getting it valued has rocks in their head.
I had a real estate agent only yesterday say to me that you don’t need a valuation clause and that if you know houses as good investor does you can see if they are good or bad. I told her, well not “this little black duck” I don’t buy houses with out one and was she insinuating I was a bad investor. She wasn’t amused and wrote it into the contract.
KerwynHi All
I take back what I said about Harcourts in Invercargill.
I was in there Tuesday 12th and a couple of young guys came in enquiring about a property they had applied for. Seems the agent was supposed to call them back within 48 hours to tell them either way what happened. According to one of the guys this was over a week ago and no one rang them. To say they were not happy when told they missed out on the rental would be a gross understatement.
Now since Harcourts had a list of rental properties a mile long you would think they would have offered them another house in place of the one they missed out on, but no one bothered to call them. Seemingly these guys were students at the SIT and wanted somewhere close, which includes the whole suburb of Appleby and a couple of others where there are a lot of rental properties at the moment.
Now if I had any properties with them sitting vacant and losing me money I would not be real happy with the way they conduct their rental department.
Kerwyn.Hi Kurra
Rick Otton has been investing in the USA for years and it seems to be Ok.If it was Westan you saw then you should have picked up that most if not all the properties he has on offer have been renovated and even though they are old they should be quite sound.
Kerwyn.Hi Jen
I never put down 10% deposit, the agents jump up and down but that is their bad luck. Just tell them that you buy lots of property and if you put down 10% all the time you wouldn’t have any money to live on.
It is only a problem in a rising market but in a market that is falling or going sideways most agents are happy to get a property sold.
If they say it is their office policy and you have to put 10% down, tell them it is your office policy not to. If you miss out on a property because of this it is no big deal, there are hundreds more out there.
Kerwyn.Hi Beanie
If you think Invercargill is cold try living in the North of Russia for 4 months during winter, a nice -36 to -40. We even had a warm spell for a couple of days when it was only -10, had to start peeling the clothes off. Invercargill is paradise compared to that.
If what you say is true Westan than I am glad I listened to you about Invercargill and bought a couple of properties there, thanks for the info.
KerwynHi All
I agree with Westan you can not put Tokoroa and Invercargill in the same context. I now have property in both and I believe Invercargill has a bigger future. I know that Westan is not sourcing property in Invercargill at the moment and has moved off shore, but this does not mean he has abandoned the area.
Invercargill is on the rise and it is still a good place to buy property, there are plenty of good deals if you know what you are doing in the town. After being there a few times now I have met some great people and even a couple of reasonable real estate agents.
You have to be able to sort out the good from the bad and you do really need to get help from someone who is familiar with the city. Buying property off the net is a dangerous business; just ask all the people who have property and no tenants.
Kerwyn.Hi All
Having just returned from NZ yesterday and spent some time in Tokoroa and Invercargill. I can comfortably say that neither Tok nor Inver are going to be ghost towns anytime soon, if ever?
After reading all the posts I can see that both Minimogul and Westan are correct on certain aspects.
Mini I think you are really on the ball with the rental situation and the fact that earlier investors have done nothing to improve their properties since the day they bought them. These investors are now starting to wonder why they can’t rent out their properties.
We have 2 houses in Tok that are not that bad luckily, although we spent a few hours with the help of Muppet, washing the walls and ceilings on one of them to make it more presentable. I will go back and paint the inside within the next year or sooner if I have too depending on when Jenny can find me a tenant.
I see a different problem facing investors in Tokoroa the lack of enough people wanting rental properties. When I was there all the real estate agents had heaps of houses on their books to rent and a shortage of renters. It does not matter if your property is 10% CF+ or 20% CF+ if you can’t rent it out you are 100% negative. You can’t expect to take bus loads of investors into small towns and buy up everything in sight and expect to rent them all out.
Invercargill is exactly the same so many houses for rent and no people wanting to rent them, although you have a better chance with a bigger population base. Again it boils down to how nice your property is and if it is appealing to a tenant. I was really surprised by the amount of vacancies in Invercargill as I was there in Jan 05 and there was not a problem. We decided to see why there was such a problem and if there was a reasonable answer to the problem. We simply went into a couple of real estate agents and said we wanted to rent a property, chose a few random houses got the keys and went and had a look. Again Mini was proven correct, the places were barely fit for human occupation. This boils down to the fact that too many investors are buying property straight from the internet based on a few photos and believing everything the agents tell them.
Westan is also correct in the fact that you have to have a 12% gross return to make a property CF+. This is not easy to do now in NZ the big returns are not that easy to find, anyone who still thinks you can simply find the 10% net returns anywhere are kidding themselves. Again I came across the investor who was all cashed up making offers well below asking price. Of course if their offer is accepted they can end up with a property that returns 12%+. The big draw back with this strategy is you buy the property then and there with no builder or valuation report. This is a big risk and these buyers deserve to find themselves with a lemon, you simply have to be a moron to forgo Due Diligence.
NZ is still a great place to buy for the astute investor, but you may have to start thinking out side the box to get the good returns.
Kerwyn.Hi Det
Let me put it this way: if you want to buy property is it better to wait until it is at the top of the property cycle then buy: or is it more of an advantage to buy when property is moving sideways or has dropped a little? If you get into the property cycle now you can put offers to the vendor much lower that you could have 12 months ago. It is a fact that vendors are not being knocked over by a rush of people wanting to buy their property at any price.
What Steve is talking about are people who have bought property when things were going up and who had the false impression that property would continue to go up without them doing anything forever and profit was assured.
This is not how it is, the last few years is really only an apparition and a short lived phenomenon. The property cycle works over a 10 year period on average and most of the time it is either going sideways or retreating. Then you have a boom period over a couple of years and everything doubles in price.
I would say with your financial situation that now is the time to position yourself in the market. As long as you buy well and below the asking price of the vendor, then add value in someway to the property you can make a good profit.
Indecision is the reason why most people fail.
KerwynHi Dazzling
Oh well, looks like I am in real trouble: I hate Golf.Kerwyn
Hi alexp
As Gramyre said have a look at Rick Otton for wraps and lease options. Rick is doing a bit of business with the lease option strategy at the moment. I am just waiting for his latest CD on L/O to turn up. L/O is a bit less complicated that wraps. Have a look at L/O also.
KerwynHi enduser
Well the town I lived in for 10 years and the smaller towns around, people were leaving in droves: I was one of them.
KerwynHi beno99
Nobleone is fairly close.
Valuation report $350.
See PropertyGuRu for 90% LVR.
Kerwyn.Dream on JetDollars.
Go the Sharkies.
KerwynTerryAnneG
Yes I agree there are deals to be made, but it depends where you are talking about. There are deals in small country towns but people are leaving these in droves. There are a lot of desperate people who bought apartments off the plan in Sydney and Melbourne who wish they hadn’t who may want to sell cheap. But when you get one desperado who sells out cheap the price of the whole unit block is devalued. Still if you have time to wait this should not be a problem.
Steve says problem + solution= profit and this is true for anywhere in the world, so good luck to you.
As far as you buying here, why don’t you incorporate? Get a shelf company and of you go. Japanese companies own half of Queensland and they don’t live here.
Kerwyn.Hi Westan
Interesting read sounds really good. Have a chat to you about it later.
KerwynHi Brady5
Makes sense if the bank will accept the higher valuation.
Couldn’t you get an independent valuation preferably before exchanging contracts but once you have the property sewn up. Have it based on the higher value with out disclosing the price you are going to pay for it. If you use one of the banks accredited valuers they would have to accept the valuation, one would think. Not sure if it would work but maybe someone could clarify this.
Kerwyn
