Hi guys a “newbie” to this website here
I am starting to look for a 3rd IP. My 2nd was in Tassie but i tend to agree with some of you that market is drying up which leads me to NZ. Apparently i may even be too damn late for NZ so i guess im not laone in tryig to workout where to go next ?? China or Japan seems a lil scary but worth investigating i guess. Anyway back to NZ….if i was to throw say 100-150k Nz’s way where do you think i should start looking ie what are the most desirable areas (lower returns) and what are the areas with the best returns ??
Cheers, James.Hi James
start by getting a maps of NZ. then find http://www.realenz.co.nz it is the definative New Zealand website for listings. then you should check out http://www.propertytalk.co.nz. Speak to as many people as you can about areas, then be careful how much weight you place on what people say as many opinions are tarnished by prejudice, old information or no understanding of what you as an investor are trying to do. Only buy in areas with a strong rental demand (most of NZ), some people favour one island over the other, i don’t i’m happy with both islands. whenever you find a property in NZ always check with independant property manager on the rentability of your home. saddly NZ has some bad areas where property manager will not manage. a lot of aussies are buying sight unseen (no problem from me i do it myself) but they aren’t checking if the area will rent. For instance one area of Rotorua calleed Fordlands is a no go area. as are areas of Tokoroa unless you want to buy a place and have it vacant. Try to buy in growing towns, but don’t rely too much on the last census a lot has changed since then. i repeat, always check rental demand.
If you come across a good deal put in an offer and then do your homework ie building inspection etc, as good deals move very fast. Double check everything you hear about nz and while 95% of agents i meet are excellent and honest some are not.
Check that the land is not leasehold as you will not own the land under the home and will pay rates and a lease. i only buy freehold.
if possible get on a plane and come and look at this sensational country, it will give you a feel for areas and where you want to invest.
finally don’t be afraid to invest in NZ it is not all that different from Oz. The market is moving up and deals are not everywhere like they were last year but the astute investor will still find good deal. the window of opportunity will not be open for ever and is closing now.
all the best
westanI find +ve cashflow deals in New Zealand which I sell to other investors. To be on my database send an e-mail to [email protected]
thanks for the info westan. let me know if you come across anything that may be of interest to me over there
Hi James,
Another site to check out for NZ property is http://www.open2view.com Most of the real estate agents advertise on this site as well as their own.There are a couple of “hot spots” in NZ, Queenstown in the South Island and Mt Maunganui in the North. The areas command low yields but growth is phenomenal.
Westan seems to have the NZ market sorted.
Best of Luck
JeffHi Guys
Jeff, good point about that end of the market, i concentrate on the lower end. I love Mt Maunganui, i was there 2 weeks ago, can’t understand why we are in Balclutha (cold), but couldn’t talk the family into moving there (they love Balclutha after only 4 months). Anyway i can see this being the NZ version of the Gold Coast and it already is i suppose. In the South prices around those scenic spots (Queenstown, Wanaka, Te Anau) command a huge price and so they should. NZ is a unique country, perhaps the safest in the world, no wonder people from the northern hemisphere are buying up big.
regards westan
I find +ve cashflow deals in New Zealand which I sell to other investors. To be on my database send an e-mail to [email protected]
Hey Westan
I remember Dolf De Roos saying that leasehold land is generally long term lease in NZ, and is often sold at a discount to freehold?
He said that an advantage of leasehold is in the depreciation. Because you are not paying any money for the land, you can depreciate the entire purchase price.
Is this not true? Or not really relevant if you are buying at the lower end?
Cheers
Melhaha melbear, my house which cost me 16k had a land value of 800 bucks, so even with freehold properties, you can often depreciate just about the entire purchase price anyway, hehe!
I remember seriously looking at a property for 35K about a year ago in Greymouth, NZ. (west coast area.) GV 55K, 5 bedroom, right in town next door to the KFC, views, close to the polytech – would rent for 280. The yield was stupendous at 41 percent. I didn’t go for it because of the liability if vacant – students? move out over the holidays? I was unsure. cost of land lease 10k p.a.. so bad. and then of course no CG potential as you don’t own the land.
It was for sale for ages, nobody wanted it. actually I heard that sometimes with leasehold properties you can buy the land at market value and it can actually work out OK.
joy to the world
Hey melbear!!
I bought a house in Invercargill freehold two months ago. Land Value – $800.00!!! That leaves a lot of house and chattels in the equation to depreciate!!! Yeh I love NZ tax laws!!
Cheers
CDCastleDreamer
Hi mel
personally i won’t touch leasehold, it just means that there is one factor that can destroy the value of the property and also the return.
Often in NZ leasehold is to the Moari’s but not always. In Napier in the North Island the lease for a lot of the city is to the port authority. Years ago (1930’s) they had a massive earthquake and land lifted up form the sea about 8 feet. This land was the port authorities, They suddenly became the wealthies port authority in the world (or something like that).
Anyway sorry for the story i just found it very interesting and thought you may. The bottom line is the land is leased at 5% per annum of the land value and signed up for 25 year lease. Napiers prices are now sky high by NZ standards 220k medain. No what if at the next valuations the land is valued at 100,000k that means the lease is 5,000 per annum (Ouch that hurt).
Muppet correct me if what i have said it wrong, some of what i have said if sourced from him, i’ve run with the figure and come up with a potential bad senario.regards westan
Hi Westan,
5% ground rental in Napier – Wow. Have you seen Rotorua – 8% of land value on a High School Board lease (21 year perpetual lease, 7 yearly reviews).
And the ground might still bubble up underneath you
Regards
Jeffhi Jeff
no i haven’t heard that one, Gee if the land does bubble up on you , if its not your land you can’t even open it up as a Thermal tourist destination.
best to stick with freehold
regards westan
Hi westan
Leasehold property in Napier is leased for 21 years before renewal at 5% of the land value.
And yes when it comes up for renewal could be a frightening wake up call to the house owner.
All house owners have until September to freehold the land by a law passed by Governemnt. Many houseowners have done so and are laughing all the way to the bank.
Regards
Thanks for thats Muppet.
are you one of the ones laughing ????
well done
regards westan
$800 for land?????? wow[biggrin]
Cheers
MelHello All
For instance one area of Rotorua calleed Fordlands is a no go areaIn defence of Fordlands, it isn’t all a no go zone, whilst I would be loath to buy on Wriggly Rd, some of the back streets are down right neighbourly, with good prices & returns. We bought an IP in Ewert St (Nominally in Fordlands) 4 bdr brick house for $40000 spent $10000 doing it up and it is currently rented with wonderful tenants for $170 a week. (How wonderful? They have built us a very nice fence when we supplied the wood…) I think the trick in difficult areas is to get a good property manager, in Rotorua I would reccomend Rotorua Rentals.
& yes land values are impressively low in some parts of the country, we just bought a property in Taranaki with a land value of $1500, $1 per sqm…
Cheers David
Well done david with the Fordlands Property[thumbsupanim]. as you are no doubt aware most property managers will not manage in that area. One property manager who looks after 300 properties and has 7 in Fordlands (by default, as the owner has 10 in other areas and he wants the whole business from them), he said he spends more time in the tribunal on those 7 properties than on the rest of their rent roll.
Richard at Rotorua Rentals is excellent , however he is one who will not manage in Fordands. (so he told me 4 weeks ago). Somehow he has taken on you property?regards westan
Thats very interesting Westan
He was the very chap we dealt with originally though the property is managed by someone else, their name slips my mind at the moment whats more in the last month or so they have taken over management for
my mother in law’s property in Wriggly rd which I would characterise as the bad end of Fordlands.I know they have recently lost the member of staff who managed our place, perhaps they aren’t taking on any new properties till her replacement has been broken in…
I know they discourage buyers from looking in the area, and fair enough to, it was a foot in the door but we certainly wouldn’t put many of our eggs in that basket if you’ll pardon the mixed metaphors[biggrin]
well good luck finding out whats going on
David
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