Forum Replies Created
Hi there,
the good areas in Auckland are – with what i consider to be their Sydney equivalents …
Mission Bay = Double Bay
remuera, epsom = eastern suburbs sydney
Mt eden = newtown
herne bay = pt piper
ponsonby = paddington
grey lynn and westmere = bondi junction
the north shore = the north shore
rodney district = central coast
sandringham = marrickville
west auckland = ‘out west’
titirangi = bundeenadon’t know if you’d buy any of these areas as an investment though….unless you were into negative gearing like mad with interest rates about to rise and prices plateauing or falling 5 percent
suspect areas? used to be Otara, Mangere, Otahuhu, but these are some of the areas you can get an Okay yield and do the subdivide thing or stick a granny flat on the back and get quite a good yield. 9, 10 percent even. Cause they’re up and coming. Auckland is growing and so the bad areas are becoming better and better over the years as the first homeowners are forced into the ‘worse’ areas. Much like Sydney, the balmain would be’s get forced into Leichardt, the Leichardt wannabes get forced into Annandale, the Annandale’s who can’t afford it now to Stanmore, Marrickville is the new Erskineville, and so on….
I know some people who are into negative gearing love the brand new “positive cashflow” (sic) apartments in auckland, but personally i wouldn’t touch them. Off the plan is so not me.
cheers-
Minijoy to the world
Stuart O’Neill is great. Have seen him talk a bunch of times and even met him briefly.
A friend of mine is using him to source investments in Q’land (both residential and commercial property) and is very happy, I’d use him myself if I wanted to buy in to Q’land.
He’s a very ‘dynamic’ person which can mean ‘scary’ if you find that kind of person overpowering, but I think that’s a good thing, as that’s how het gets his deals.
My two cents.
Also I know he must be a friend or esteemed associate of Steve if that makes you feel more comfortable, as it was at a Steve seminar that I met and heard him.cheers-
Minijoy to the world
same here, but westan has beaten me to it, and I will hereby vouch for him as a person of excellent character and integrity.
cheers-
Minijoy to the world
Hey Michael R,
Another legendary post from you with a lot more political understanding than I have or care to have. Thanks for that.
AFAIK there are no restrictions in place for Aussies to buy the kind of properties I have bought, which is the same sort that we source for our bird-dog clients – ‘second hand’ family homes and duplexes, fourplexes, etc. They don’t fall within the criteria mentioned and so it’s all good!
cheers-
Minijoy to the world
100 percent equity on three NZ properties.
Reason – firstly risk mitigation. Not kidding you, I could hardly find a single person with a good thing to say about the three properties I bought, at the time, that thought they were a good idea. Most people thought I was making a terrible mistake and would lose money. (of course those people didn’t KNOW, and weren’t investors…heheh) ALSO i am self employed and work in Entertainment so not a cookie cutter person for finance, and not buying cookie cutter properties. Also the properties were so cheap that even the banks may have screwed up their noses at them for finance!! They were less than half most bank’s minimum lends!!!so thought I would leave them a year, see if they COULD support themselves if financed, (they so can – I’m over 20 percent returns with all three now, and 70 percent capital gains based on the current market.) also thought I would do the renos and get them tenanted in the new reno’d state, using the increased equity and rental and serviceability in the future when I finance all three to get more properties. It’s been a year now and at any point I will at least double my portfolio to six properties if not more in the next year, the problem with doing that is 90 percent procrastination (after realising it’s ALWAYS a good time to buy properties, so there’s no rush) and 10 percent too busy….OK, 100 percent procrastination, cause i really could fit it in if i wanted…
Yes, note to self, i really must get on to that…
cheers-
Minijoy to the world
some great points here everybody.
questions: was the tenant loyal because the rent was underpriced? Is the landlord selling rather than raising the rent/moving the tenant??? was the landlord managing the property themselves???
I prefer to use a property manager so that these issues are kept somewhat at arms’ length.
You could do the same. The fact of the matter is that most people don’t want to move, because it’s a pain. And involves change which means stress. but we have all had to move at some point in our lives, for various reasons, when we didn’t want to. So it is the same for this tenant. Let professionals decide on the market rent, inform the tenant of when this will take effect, and let the tenant make their decision whether to stay and pay or find a cheaper place elsewhere.
or, choose a different deal – and let someone else make those decisions…
cheers-
Minijoy to the world
Hi Homer,
“The real estate agent told me rental properties are in demand in the area though. But I thought hey I’d say that too if wanted to sell someone the property.”
Exactly, and so the way to find out about demand is to ask a rental manager not connected to the sales office. (hopefully there are two in that town.)
Better still ask them to do a rental assessment for you and ask them if they’d manage the property for you. (sometimes they say ‘we wouldn’t touch that street as it’s nothing but trouble’ whereas the one selling you the property won’t tell you that.)
Basically if you don’t live there or know the town your leverage is asking other locals and cross-referencing that information. Also ask about the neighbours…just ask lots of questions. Ask them how many properties they manage, how many are vacant, why they’re vacant. In a town I have properties in, where one rental manager manages about 300 properties, about 8 are vacant. But she tells me that the ones that are vacant are all sub-standard.
The other thing to consider is that declining population *might* mean no capital gains, or worse still, negative growth. (capital loss!) you need to work out if the cashflow yield is high enough to compensate you for the risk you won’t get CGs.
For me, that figure is 10 percent in my hand after costs, being twice what a term deposit would give me.
Then again Tasmania had a declining population for ages and negative growth before it turned around, so it’s not a reason NOT to invest, you just have to be realistic about what the risk is and if it suits you.
In NZ you can get 10 percent yields for decent towns on the up, (capital gains highly likely) or 13 percent yields or more for towns that are stable (not really growing or declining no more than about half to one percent a year.) This is with a reasonable quality of house. Lower quality houses generally get higher yields once you fix the problems. I have found that you get enormous capital gains from the cheaper properties at a much higher rate than more expensive properties.
I took the risk of buying the worst house in the worst street for 16K next too a gang member (!!!) and spending 8K putting heating in, doing the flooring, handyman fixing absolutely everything, and painting. A tenant was paying 95 a week (20.5 percent return on 24K) for a year and it has now just been put up for a new tenant to $115 per week. (24.9 percent return.) Also i could probably sell this property for 42K, showing an investor a 14.5 percent return and giving them a lovely renovated property with a decent rental history and no ‘problems’ as a going concern, so I did get capital gains too of approx. 74 percent in a YEAR. Nevertheless, this investment was considered very RISKY by just about everyone i talked to. I was prepared to take the risk, because if it all went horribly wrong, hopefully I could have got 80 percent back so really I was only ‘risking’ 20 percent. As it turned out the risk i took has paid off handsomely.
but my parents for example who are at a different stage in their lives probably would have spent more, not had to do a reno, and settled for a lesser return as the payoff for the ‘security’ of a more desirable property. Then again as my one has shown, all properties are desirable as a rental, at the right price!
cheers-
minicheers-
Minijoy to the world
“Your spot on Mini, it pays to read the artical, but I really just wanted the attention……….
“salubrious, *giggle*, touche…..
Well, you did get my attention!!!
Then again I always look at threads with NZ in the topic as that’s my area of interest/expertise.!cheers-
Minijoy to the world
CONNECTION on it’s own is wonderful, and you can be great mates – all that good stuff like emotional, spiritual, intellectual connection and mutual understanding. And a connection is truly effortless – you have it or you don’t.
SEXUAL ATTRACTION on it’s own is wonderful, and you can have lots of fun
but when you get CONNECTION and SEXUAL ATTRACTION in the same person, then you’re on to something.
So i found that…and we added COMMITTMENT to the mix plus the FREEDOM to grow both as individuals and as partnership.
So the result is i feel PEACE in a relationship for the first time in my life. Coming up to 8 years together.
cheers-
Minithat’s what
joy to the world
The soul is androgynous
joy to the world
Hi Wilandel,
“NZ has plenty of good deals still, but it is getting harder to find “quality properties” at bargain prices. “
I agree, and it’s ironic that if and when NZ is not flavour of the month any more and “all” (myself not included) the investors go off the boil, that’s the exact time when you’ll be able to name your price and yet insane deals and yields. But then again you need the throngs pushing prices up if you are selling.
But once one gets how all of that works, one realises that none of it matters, one invests for the long term anyway. So in half the property cycle you get amazing yields, and in the other half you get amazing growth. It’s still amazing all the time though….
cheers-
Minijoy to the world
Everyone misses the good bit, because bad news and shiznit-stirring sells more papers, sheesh….
here it is:“But the New Zealand government has made it easier for foreigners wanting to invest big bucks in Kiwi companies by doubling the threshold at which transactions have to be scrutinised.”
cheers-
Minijoy to the world
I’ve read the article, and what I can’t get is how you read it and conclude “Kiwis don’t like Aussies”.
This is meant to LEAD the reader to LOOK for paragraphs which support your BIASED headline. OK, putting that to one side, the two salient points are that it’s going to be harder for Aussies to buy properties with “special heritage or environmental value.” Which does not have anything to do with who likes who.
Then again, perhaps you missed this paragraph…. “But the New Zealand government has made it easier for foreigners wanting to invest big bucks in Kiwi companies by doubling the threshold at which transactions have to be scrutinised.”
A lot of people when reading something that doesn’t fit their preconcieved bias just actually MISS completely the bits that don’t fit their paradigm.
Just really interesting how you interpreted this article, more interesting than the article itself!!
cheers-
Mini“special heritage or environmental value.
“joy to the world
yack – and this must be a historic moment – i agree with you 100 percent!!! “a tenant wants value for money.”
Absolutely.
I’m hoping my future tenants are going to want a combination heat lamp/extractor fan in the bathroom (cost $300 incl installation) as it’s winter and it’s near the snow…..and I’m just putting one in one of my properties…
i think tenants like trendy but not too trendy places. Such as warm neutrals rather than garish colours. I am quite comfortable with garish myself (hehe) but then again i’m not the average tenant…so i tone it down for them. I use cream, white, coffee, navy blue for feature walls kind of colour scheme. Tenants don’t want anything that clashes with their own decor – you don’t know if they will have black leather couches or floral browns or red cotton. so your ‘blank canvas’ should appeal to as many as possible. i think a good colour scheme (or rather, neutral) hides a multitude of sins, as it’s so rare to find a well -decorated rental properties. i think it’s the thing that’s given my properties an edge when quite frankly they don’t really have any other sort of edge! hahahahahahaaaaa
Also tenants like fences….they like garden sheds. these are two requests I’ve had in the past. they like good locks…they like taps that don’t drip etc – i.e. well maintained properties. they like low maintenance gardens – and so will you when you realise how little tenants do.
I once didn’t purchase a property as an investment, as it had a rose garden. Looked great and brilliant, but way too high maintenance for a tenant. Yeah, i could have bought it and ripped them out, but i chose to leave that deal for someone who would appreciate the owners’ love of roses. it’s not like there weren’t heaps of other deals out there!!
oh yeah, they like insulation, though they won’t realise/notice that unless they have lived in an uninsulated place….
they like value…no matter how nice or crummy your place, there will always be a nicer one as well as a crummier one. but how yours compares price-wise to the other nicer/crummier ones will depend on how much your tenant wants it!!!
joy to the world
Earthquakes….I grew up in Wellington, at the bottom of a main fault line, used to tremors on a regular basis, so therefore one doesn’t end up with any ‘fear’ of them. (No more than any other ‘act of God’ which could happen to you any time any where.) In wellington, a lot of houses are built of wood rather than brick (unless reinforced) because wooden houses are brilliant in an earthquake as they have a lot of ‘give’.
Re: “Heard there was an huge earthquake on sunday on the north island. Is this a frequent occurance? Is that why most here are buying in da south?”
I wouldn’t think so as a reason to buy in the South….I would have thought that ‘most’ were buying in the North – well, that’s where 3/4 of the houses in NZ are!!
The reason I personally buy in the North and not the South? Family in Wellington, friends in Auckland, so I was buying in between. kind of like the between sydney and melbourne thing. convenience. I was looking in the SI too, and there were some good deals there too, but in the end I felt the deals in the NI were as good as deals I was finding in the NI so I bought there.
And it’s become my main investing stomping ground ever since. Also now I have such great teams in place on the ground there is less reason for me to investigate the South unless the deals in the South start to get way better (and they’re still just on a par in my opinion.)Now if you are an Aussie with no particular affinity or reason to purchase in the North or South island, I would still go the North. Why? Because 3/4 of NZ lives there and as it’s more populated it’s less remote. You are likely to be max a hundred K from a sizeable town. Also any place within driving distance of Auckland has got more CG potential I reckon because of statistical population predictions. The SI towns have to work a bit harder to get people there (with exceptions like Queenstown, Nelson). For example Invercargill. declining population for 12 years and suddenly turned around because they made studying there free. Cool. long may it continue, because if they phase it out it won’t be pretty for investors if the town reverts back to it’s long term pattern of decline.
The NI is warmer too (with exceptions in the SI like Nelson, Blenheim, Marlborough which are microclimates similar to the mid NI)
my opinion only, feel free to debate if you disagree
cheers-
Minijoy to the world
Earthquakes….I grew up in Wellington, at the bottom of a main fault line, used to tremors on a regular basis, so therefore one doesn’t end up with any ‘fear’ of them. (No more than any other ‘act of God’ which could happen to you any time any where.) In wellington, a lot of houses are built of wood rather than brick (unless reinforced) because wooden houses are brilliant in an earthquake as they have a lot of ‘give’.
Re: “Heard there was an huge earthquake on sunday on the north island. Is this a frequent occurance? Is that why most here are buying in da south?”
I wouldn’t think so as a reason to buy in the South….I would have thought that ‘most’ were buying in the North – well, that’s where 3/4 of the houses in NZ are!!
The reason I personally buy in the North and not the South? Family in Wellington, friends in Auckland, so I was buying in between. kind of like the between sydney and melbourne thing. convenience. I was looking in the SI too, and there were some good deals there too, but in the end I felt the deals in the NI were as good as deals I was finding in the NI so I bought there.
And it’s become my main investing stomping ground ever since. Also now I have such great teams in place on the ground there is less reason for me to investigate the South unless the deals in the South start to get way better (and they’re still just on a par in my opinion.)Now if you are an Aussie with no particular affinity or reason to purchase in the North or South island, I would still go the North. Why? Because 3/4 of NZ lives there and as it’s more populated it’s less remote. You are likely to be max a hundred K from a sizeable town. Also any place within driving distance of Auckland has got more CG potential I reckon because of statistical population predictions. The SI towns have to work a bit harder to get people there (with exceptions like Queenstown, Nelson). For example Invercargill. declining population for 12 years and suddenly turned around because they made studying there free. Cool. long may it continue, because if they phase it out it won’t be pretty for investors if the town reverts back to it’s long term pattern of decline.
The NI is warmer too (with exceptions in the SI like Nelson, Blenheim, Marlborough which are microclimates similar to the mid NI)
my opinion only, feel free to debate if you disagree
cheers-
Minijoy to the world
what’s that saying – something like sell the mould, keep the gold – sell the trash, keep the cash??? no, i’ve got that wrong, but Steve has a saying which i forget – basically, if your investments aren’t performing, sell them and buy a different one instead. Negatively geared to begin with, and costing you heaps to run on top – what are you waiting for, capital gains? And then what? how much will it have to go up before you have recouped let alone made anything? Not saying it’s bad or good, have no idea, but if they aren’t working it doesn’t mean that PROPERTY INVESTING is no good, or even that you and property investing don’t fit, it’s just those particular properties that aren’t working out.
As long as you’re not emotionally attached to them you should be able to sit down and work out whether they’re getting you towards your goals or not.i’m a control freak and so I can’t imagine ever buying something with a body corporate. (never say never though.) Which seems like where a lot of your problems are coming from. if you buy single family homes then you’re the boss. You get your builder’s report, you fix the urgent, and schedule the rest.
Not arguing with the fact that a lot of properties need maintenance. but how does one stay in control? is the question.
1) insurance covers those weird ones (like when a fire place caught fire in one of my properties, had to be repaired, and cost as well as subsequent loss of rent in that time was all paid for)
2) builder’s report – you said you did that, but then your body corporate mucked it up so you weren’t in control of what had to be spent and when
3)the stuff that happens
broken windows, leaks in roof, hot water system element. Yeah, I’ve had all of those, but they are less than $200 usually, and as for the roof, well a builder’s report means I knew the roof needed attention some time, but for the time being you can just patch and silicone, and then repaint or repair better later to your own schedulejust my three cents
cheers-
Minijoy to the world
PS Why haven’t I bought more properties? Well…firstly because i am a risk averse chicken who kind of likes 100 percent equity which I have at the moment, that is I own my properties all outright, secondly because I have been using the income off these properties to live on (I know it’s a bit naughty in terms of not getting my portfolio any further, but it will pay off later, because I am using it as passive income while I develop a new business venture intended for global domination) and there are a few more excuses to do with having been travelling several months of the year, not to mention doing my ‘day job’. PLUS on top of that being totally busy with my other part time-but-growing-in-a-big-way-thing which is bird-dogging deals for our voracious clients (at least 15 properties in the last few months for other people) – so I have actually “signed contracts” to buy more than 12 properties this year, I just haven’t settled on any of ’em….hehehe
joy to the world
Hello all but firstly Kaye,
“if one buys a 500k IP, it is pretty much equal to buying 10 X 50k IP’s.”
No, because all other things being equal, you have ten rents coming in not one. I.e. your 500K property is vacant, your portfolio is vacant. 10 X 50k properties is spreading risk.
“Sure, the yield is going to be lower,”
which is another reason why a year ago I bought three houses for 80k instead of one ‘good one’ for 80k. the yields on the cheaper ones were higher. As the quality of house went up, there were less ‘problems to fix’ and therefore less opportunities to ‘make money solving those problems’ and also like you say, you don’t necessarily get proportionately more rent for nicer houses – the contary.
“The whole “how many IP’s do you have?” thing, is really like comparing apples with pears.”
It is if you really just want to know ‘what’s your net worth”? But as far as i am concerned buying my third property was not nearly as big a deal as buying my first. And I would rather have had the learning of looking, sorting out, purchasing, doing the numbers on, three properties over just having bought one.
“It all depends on what the properties are worth (if you have a growth strategy) “
not really!!! I reckon you will get much more growth from ten 50K properties than one 500k property. One 500K property, sure it might go up 20 percent a year if you’re lucky or at the top of a boom or in Manly or something. But my personal theory is that the bottom of the market houses in any particular market go up at a higher rate than more expensive houses in the same town. I.e. Wilandel’s 20k odd house being worth 40k 7 months later. You won’t read about 100 percent capital growth in that town in 7 months. In fact that house is so cheap it would hardly make a dent in the graph of ‘median house prices’. nevertheless, you ARE seeing crazy growth especially at the bottom of the market. It’s obvious really, because that’s where ALL house buyers in the market can afford….as you go up the market, there are less people that can afford the next price range up…and as house prices rise, people jump down a notch as they can’t afford where they wanted to buy any more….you get me???
“or how much income you are getting (if you have an income strategy).”
it doesn’t just have to be one or the other, it can be both. CF+ve gives you the means to support new investments and growth gives you the equity for deposits or ‘multiplication by division’.
The true answer to ‘do you have to pay CGT in Aus’ is a question for your accountant, not Jenman. (phish)
In NZ it depends on if the tax department thinks you are a property trader (i.e. “I buy properties and sell them for capital gains and live on the profits as income”) then yes, but if you are buying them for rental income then no. i think if you have held them for a year then it’s OK.)
But again it depends what you do with those profits. Who owns the property? You? a trust? A company? Are you a benficiary? how much do you earn from other things? etc etc
Therefore, q for a CPA.
cheers-
Minijoy to the world
