Forums / Property Investing / General Property / Where to buy an IP in NZ for under $35K??

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  • Profile photo of BridgetteBridgette
    Participant
    @bridgette
    Join Date: 2003
    Post Count: 14

    Hello all,

    I am wanting to buy my first investment property in New Zealand.

    Why NZ as I am from Australia you may ask?
    B/c I can not afford Australia and personally feel that what you can get for under $35K in NZ is a lot better and I mean a lot better than what you can get in Australia for the same price.

    Here is the problem and where all of you and Property Experts can help.

    Where do I buy?

    I am limited in my funds. Max $35K

    I only want to buy a property that is on a free hold section and that is in a high renatl demand area that will grow (have capital gain).

    I want to have capital gain and don’t want my property to be rented to unemployed people who could trash the house. Hence why the area has to be attractive.

    As I am wanting to buy a property for investment purposes, it really does have to be in an area that has little unemployment and again is in an area that is in demand for rentals.

    I am looking at a property at the moment in Gore, just a two bedroom cottage that needs a little work.

    What are your comments about buying an IP in Gore?

    Can anyone suggest anywhere that is good to buy an IP that is going to grow and that has a very low unemployment rate?

    Thank you for your time and assistance.

    I look forward to hearing from you all soon.

    Kind Regards,

    Bridgette
    P.S Hello and a big thanks to mini mogul. Mini is a great friend and the whole reason why I am now more knowlegable in NZ Real Estate. Without her encouragement and constant advice I would be none the wises about buying in NZ or buying in general as I always thought being a property buyer is something only for the very rich and fortunate.

    Profile photo of zanis1zanis1
    Member
    @zanis1
    Join Date: 2003
    Post Count: 70

    Hmmmm okay… this is a tough one but I have heard that the following are selling properties under 50k some under 40k. Check these suburbs out but please remember to think why they are selling them this cheap – has the one and only major business just left town? Has the local gang beefed up their businesses in the area, are all the youth moving out to go to the big smoke.

    Lots of questions to find answers to – there maybe people on this forum who are traveling to NZ soon so maybe you can come to some arrangement with them to help you understand more??? I will let those people contact you.

    Towns to check:
    Tokoroa
    Kawerau
    Woodville

    Gore – too bloody cold if you ask me!

    Best regards

    Marc

    P.s if you have no idea (like me) where these places are try the NZ map I have on the web site.

    http://www.propertytalk.co.nz/modules.php?name=Content&pa=showpage&pid=45

    Profile photo of westanwestan
    Member
    @westan
    Join Date: 2002
    Post Count: 1,950

    hi bridgette

    i suggest you get on a plane and go over and have a look around. i don’t like to say to much these days about NZ, it just creates more Aussie interest in the land of the long white cloud. But i’d be comfortable buying in Gore (i’ve got 2 there myself). some advice for you. i know alot of people who are regular to the forum and they would never take a deal out from someone, but we don’t know who is reading the forum so try to be a little more candid in future. i would hate someone steal this deal from you.

    regards
    westan
    [email protected]

    Copied from the “general investing” forum

    Profile photo of BridgetteBridgette
    Participant
    @bridgette
    Join Date: 2003
    Post Count: 14

    Thanks for the advise.

    I couldn’t fin however woodville and kawerau on the map. If you know actual locations…sweet.

    As for Tokoroa, my b/f family just bought a house there, on the good side. Just to let everyone know, there is a good and a not so good side to Toko so make sure you are informed. However, I think that is the case with the majority or areas. I guess one just has to think about where they live. I guess there is a nice side and a not so nice side a few km’s away.

    Can anyone give me some advise in buying the following areas:

    Wairoa and Waimate

    Does anyone on any IP’s in those areas?

    Now I know Wairoa had a big unemployment rate about 2 years ago, does anyone know if that has cleared up?
    Is it a good investment area?

    Now Waimate, I know there is a good and a not so good side to that area.
    Does anyone know if there is growth there and would that equate to capital gain?

    Does anyone know if there are any gangs in anyone of those two areas such as the mungrel mob etc?

    Thank you to both westan and Zanis for the support. Also a thank you to Sooshie.

    Kind Regards,

    Bridgette

    Profile photo of zanis1zanis1
    Member
    @zanis1
    Join Date: 2003
    Post Count: 70

    Hello again,

    Its good that you do have some “relations” in NZ. It is very helpful having someone there to give a possible property a look over or even better have another investor look over the place. I’m sorry but I can’t really suggest anymore areas since my price range is a little higher. However your on the right track in regards to sussing the place over first. Things to look for that Aussies might not know:

    1) Gang Activity in the area – gangs in NZ rule towns full stop. Check this out with the local police.

    2) Land claims under the Treaty of Waitangi. Locate the local iwi’s web site – they may tell you what land they have in dispute with government.

    3) Make sure you don’t go for a one industry town such as forestry, meat works mining etc…

    4) Search for the areas council web site.

    As a side note check out the facts on NZ section on my web site to gain more of an understanding of kiwi’s

    http://www.propertytalk.co.nz/modules.php?name=Content&pa=list_pages_categories&cid=5

    Anyone who is reading this please don’t be scared off with NZ – if you read the current news on my web site you would know that we just told the US to pi$$ off with the nuclear powered ships yet again! Its a great country!

    Best regards

    Marc

    Profile photo of BridgetteBridgette
    Participant
    @bridgette
    Join Date: 2003
    Post Count: 14

    Thanks again Zanis.

    However my b/f’s parents live here in Sydney, not NZ. They just bought for investment purposes just like I am trying to do.

    They actually bought the house that I found but didn’t have the funds to purcahse at that time.

    Now I have gone off Toko as an area. Not that there is anything actually wrong with Toko but I just don’t have a vibe for it anymore.

    I really apprecaite the advise on gangs etc and checking with the local police.
    Will do that when I find something worth purchasing.

    Kind Regards,

    Bridgette

    Profile photo of www.Landlords.co.nzwww.Landlords.co.nz
    Member
    @www.landlords.co.nz
    Join Date: 2003
    Post Count: 60

    Another thing to note.

    It may be worthwhile asking the banks where they will require more than a %20 deposit.

    parts of wanganui… i think tokoroa (thats the forestry??) is on that list too.. huntly (mining shafts subsiding??)

    I may be wrong on reasons, and location.. (* for reasons witheld [:D] )

    But if you think about it. If the banks are requiring a bigger margin on their lending, its got to ring warning bells.

    NZ Property Investing News
    http://www.Landlords.co.nz

    Profile photo of MiniMogulMiniMogul
    Participant
    @minimogul
    Join Date: 2002
    Post Count: 1,414

    hi bridgette,

    baby! it’s great to see you here!! yippppeeeeee!!!!!
    make sure you do a little looksee on the topic called NZ suburbs in the treasure trove folder, because it’s got heeeeaps of info.

    OK yeah tokoroa-
    I was semi looking there for a while, at one in particular a while back listed for 30K and rented for 110 a week with sitting tenant, and according to the RE agent (who I really liked the vibe of – jenny lamberton -) was a good tenant. Why didn’t i buy it? Because it was made of untreated timber. eek. And the RE agent volunteered that it was already starting to rot….I was trying to buy structurally sound properties that would last me for a while if i fixed it up and untreated timber just sounded too bad. If my offer would have been accepted i would have proceeded with a builder’s report but it wasn’t. Looking back yep it was a great deal but since I reckon i found even better deals in a town not reliant on one industry – anyway they didn’t accept my offer of 23K (based on research that in that area properties sell for way under GV and that was a fair price) I didn’t get it.

    I don’t necessarily think that properties have gone up as such,
    since then, – i just think that the cheaper ones have been snapped up leaving the 40K ones and up still for sale.

    Keep looking though as traditionally people put houses on the market in spring and summer.

    zanis – great idea to contact the police. I accidentally bought a house with a gang member living next door that nobody wanted to rent for 6 weeks. (now rented thankfully.!)
    but the weird thing is that i was over there for 4 days renovating it and didn’t notice anything, it was a really quiet cul de sac street and there was an old blind lame dog waddling about, not even a scary one, and people would wave and smile in the street. the RE agent says it was because of it used to be bad 5 years ago but the stigma remains longer than the street is bad. if you get what I mean.

    What else – yeh waimate – i have heard there are some businesses going in there so it could be great for capital gain in the future as well as rental demand. the only reason i’m not looking there is that North island is closer to my folks and friends and easier to get to if I need to.

    wairoa – yeah don’t forget that unemployed people need housing too, and provided you get a tough rental manager (as many of them are and need to be in those areas) who only take tenants with references, then look at it like, at least they have a guaranteed income! Because it is quite likely that at the bottom of the market in a town like that you might indeed get a beneficiary as a tenant.

    Now i have heard horror stories about a certain town in Queensland where landlords make their houses concrete inside and out because aboriginal tenants strip everything including ripping up floorboards for firewood. Now I don’t know if that is racist white people telling stories or true because I haven’t been there to see for myself. But I haven’t heard anything bad like that from NZ.

    However……two of the places i bought were off the same vendor who hadn’t done any maintenance for 15 years. they were pretty trashed (though structurally sound – ) in fact bridgette you’ve seen pics so you know what I mean. And in the state they were in they attracted only the lowest kind of tenant because they were the lowest standard of house. Now they are improved the tenant they attract has changed too.

    that’s all for now

    love Mini

    howev

    Profile photo of MorvynMorvyn
    Member
    @morvyn
    Join Date: 2003
    Post Count: 6

    OK so what records is Mini on anyways??? Hope you don’t mind but I had to ask!!!

    Profile photo of muppetmuppet
    Member
    @muppet
    Join Date: 2003
    Post Count: 900

    Hi Guys

    A report in this morning’s NZ Herald about a study that reveals causes of Auckland housing boom makes a statement that says and I quote:
    “The widespread belief that proprty values only go one way -up- is not borne out nationwide. Although real house prices have more than doubled in the Auckland region since 1981(up 11% over and above CPI inflation) they have fallen by 27% in Southland.

    In Auckland City they rose 152% over the same period in real terms but fell 50% in the mill town of Kawerau. Over the last 10 yrs prices have had a stronger tendency to rise faster where they were high to begin with…….. In 1981 an average house in Manawatu/Wanganui was worth about 66% of one in Auckland. Last year it was little more than 33%.”

    I can hardly wait to see the rest of the report. It should make interesting reading.

    Bridgette – There is a big strand dealing with NZ Suburbs already somewhere in the forum. Use your search button and have a look. Also there are a number of web sites listed in it as well that will also give information that you require.
    If you are after Capital Growth then you will have to spend big bikkies and buy in Auckland, parts of Wellington. parts of Christchurch and Dunedin which is starting to catch the Auckland bug.

    Regards

    PS don’t invest in any towns starting with T or W because very few of them are showing any capital growth. They have only +ive cashflow properties if you buy cheap enough.

    Profile photo of RodCRodC
    Member
    @rodc
    Join Date: 2002
    Post Count: 335

    Hi Bridgette,

    You’ve been given some good advice here so far. I’d just like to back up what westan said. If you’re looking at the lower (<$35K) end of the market you really need to take some time to go over and have a look around to get the feel for the different towns. Some towns have a completely different feel when you’re actually on the ground walking around. The internet only gives part of the picture.

    As mini said, unemployed need to live somewhere too. You just need a good property manager.

    Good Luck,

    Rod.

    Profile photo of ADAD
    Participant
    @ad
    Join Date: 2002
    Post Count: 636

    Muppet,
    IF regions don’t have capital growth does it matter if they pay themselves off in 8-10 years.[:D]
    When I look at any deal I see where the money is right now. On the cashflow deals I have money in my pocket from day one. As to the capital growth thing……well there are no guarantees. I’m no NZ expert but cashflow is cashflow.

    AS to the W or T thing again the question of CG. If they are tenanted and paying themselves down and provdiing cashflow then that is a good thing. If they are only worth $35K still in 10 years but they have paid themselves off and provide you with $$ every week….isn’t that good ?

    Just my thoughts.

    Enjoy
    AD [:0)]
    (Andrew)

    It is good to have an end to journey toward, but it is the journey that matters in the end.

    Profile photo of BridgetteBridgette
    Participant
    @bridgette
    Join Date: 2003
    Post Count: 14

    Thank you to all for all the knolegeable advise.

    You’re right Mini, well worth coming on here.

    I have been talking to Westan who says he has spoken to you on the phone. He is a real gun and is snapping up IP’s left right and centre. Good on him, I say!!!.

    I put an offer down on some land. D and I are waiting to hear back to see if the offer was accepted.

    Does anyone know where to find some IP’s in Dunedin? as realenz doesn’t have many listings for under $40K.

    I took Zanis’ advise and rang the local police stations regarding gang activity.
    Good thinking Watson.

    I think what AD says is right too. One shouldn’t be so scared to buy in areas that are not as well to do, so to speak. B/c people who live in those areas are paying off one’s house and helping to get one a step closer to their goal.

    What a fantastic bunch of people you all are, thank you once again for the encouragement, honest advise and good wishes. May you all reach your goals and remind such friendly people.

    Bridgette

    Profile photo of BridgetteBridgette
    Participant
    @bridgette
    Join Date: 2003
    Post Count: 14

    Thank you to all for all the knolegeable advise.

    You’re right Mini, well worth coming on here.

    I have been talking to Westan who says he has spoken to you on the phone. He is a real gun and is snapping up IP’s left right and centre. Good on him, I say!!!.

    I put an offer down on some land. D and I are waiting to hear back to see if the offer was accepted.

    Does anyone know where to find some IP’s in Dunedin? as realenz doesn’t have many listings for under $40K.

    I took Zanis’ advise and rang the local police stations regarding gang activity.
    Good thinking Watson.

    I think what AD says is right too. One shouldn’t be so scared to buy in areas that are not as well to do, so to speak. B/c people who live in those areas are paying off one’s house and helping to get one a step closer to their goal.

    What a fantastic bunch of people you all are, thank you once again for the encouragement, honest advise and good wishes. May you all reach your goals and remind such friendly people.

    Bridgette

    Profile photo of SooshieSooshie
    Member
    @sooshie
    Join Date: 2002
    Post Count: 974

    Hi Bridgette,

    Loved your tracks [8D]… so did Simon, my little one.

    I’ve done a search for you and rather than listing post by post, I’ll just list the link to the search results.

    https://www.propertyinvesting.com/forum/search.asp?mode=DoIt

    It might be good to scroll through the above link.

    Did you get some info from http://www.propertytalk.co.nz I know it’s new but it’s NZ specific. I’m thinking about posting in the forum section myself.. [:D]

    Cheers

    Soosh [8D]

    When a problem is created the solution is created simultaneously

    Profile photo of muppetmuppet
    Member
    @muppet
    Join Date: 2003
    Post Count: 900

    Hi AD

    Bridgette did say in her first posting that she wanted high rental demand AND capital gain.
    Therefore I am saying that these places starting with T and W will have no or little capital gain.
    If it is paid off in ten years, yes, you have made $35k but what a slow way of making it. Whereas in a place of capital gain you can make that amount in 6 months. But then again it will take you a lot more money to purchase in a capital gain area.
    Six of one and half a dozen in the other.

    I have purchased two houses in a T town. One property is let at $155 per week but the other doesn’t have a tenant yet. The PM has been unhappy with the calibra of prospective tenants.
    I am not expecting any capital gain, I am after the Steve McKnight method of getting +ive cash flow.

    The All Blacks by 105pts

    Regards

    Profile photo of MiniMogulMiniMogul
    Participant
    @minimogul
    Join Date: 2002
    Post Count: 1,414

    “they have fallen by 27% in Southland.”

    re muppet’s post, yes that is true, but that’s what makes Southland and taranaki and wanganui areas the most ‘affordable’ in NZ and the areas where you are most likely to get +ve CF.

    Yes it is possible to get +ve CF with cap gain potential (dunedin, waimate, milton, oamaru) but you have to spend a bit more to get in the market there, particularly dunedin, and Oamaru i have a huge vibe for. As an upcoming beautifula coastal town with heaps of beautful old white oamaru stone waterfront buildings, now being developed into tourism hotspot, the penguin thing brings in the people, europeans moving there and starting groovy cafes where a few years ago you couldn’t even get earl grey in the town let alone cappucino….Dunedin I have a huge vibe for as well….terrific place…beautiful….and still CHEAP to get a gorgeous red brick mansion right in town (relatively speaking!) Because of the young student population it’s like a mini-melbourne, it feels funky and alive. Much hipper than the more staid christchurch.

    Ditto Milton, hard to find anything for sale there, but jobs going in there like mad

    What AD said re: what does it matter if you only get a bit of capital gain if you are buying for cashflow? At a 20 percent yield after costs (still achievable) you get a ‘free house’ in five years and then it’s like free rental income forever indexed for inflation. even after maintenance, rates, and management.

    cheers-
    Mini

    Profile photo of ADAD
    Participant
    @ad
    Join Date: 2002
    Post Count: 636

    [;)]Agree to some extent Muppet. Can you show me a guaranteeed $35K cap gain. Over what time frame. What if the more negative economists are right and we are in for rain.[}:)] Prices will drop.[:(] For me I will choose cashflow over gain but in saying that I have bought a few properties under market and fixed and flicked. Horses for courses. Neither ismore right than the other. [:D]

    Enjoy
    AD [:0)]
    (Andrew)

    It is good to have an end to journey toward, but it is the journey that matters in the end.

    Profile photo of zanis1zanis1
    Member
    @zanis1
    Join Date: 2003
    Post Count: 70

    Here is another reason why you need to look at businesses in towns (NZ) ->

    http://www.stuff.co.nz/northland/0,2106,2687437a1927,00.html
    It seems that some town s may or maynot lose there meatworks. In some towns this is the major sourceof employment.

    I aggree with the other comments on the importance of seeing the IP for yourself or getting someone else to on your behalf. You get to feel the vibe on the street etc..

    Best Regards

    Marc

    Profile photo of battz71battz71
    Participant
    @battz71
    Join Date: 2003
    Post Count: 95

    G’day all,

    Great thread. Im actually heading off to NZ next Tuesday for a wedding, and figured whilst im there I’ll look at some properties. I’ve already managed to arrange some appointments with RE agents. Ahh the internet, what would we do without it. [:D]

    I’m going to travelling the south island, so my research will be restricted to there. If any members of the forum are interested in having a “spotter” look at some properties while Im there let me know and Im sure we can work out something [:)]

    I’ll be keen to see what the rental demand is like in the various towns and what type of rapport can be established with RE agents.

    Cheers,

    Battz

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