Property Investment - the beginning

[eri]

20-30 below would be a good deal

esp. when many houses in auckland are selling for 20-30 over...

[Micholas]

hi there,
i'm not from Auckland so not familiar with areas etc.
Does everyone here really think this is a good deal?
Micholas has paid $5k more than it's current registered valuation.
I have been led to believe that 20 to 30% below a RV is a good deal.......or perhaps a great deal.
What makes this a good deal?
Cheers

Hi The Property Store, what makes this a good deal is that it was valued at $375k, yes we bought it for $5k more than the valuation, but the house is extremely dated and if we renovate, the valuer expects the new figure to come in at around the $500k mark. If we didn't snap this house up before it hit the market, it could have sold for early-to-mid 400's. Although I don't think it would have hit the open market so to speak as the real estate agent was showing some people (possibly friends) through it on Christmas day, before he was supposed to have started advertising it. Lucky we got in

[The Property Store]

Eri........so what yo are telling me is that Auckland valuers have not caught up with the actual current sales demand? That is if property's are selling 20 to 30 above valuation. Wow good money to be made then.

Micholas, that's awesome; just make sure you don't over capitalise on the do up. If some of the predictions that I have been hearing lately come true - that a market rise is foreseeable in the next 2 years - you should do well. Good luck

[eri]

not valuers per se

but CV's

CV's are only calculated once every 2 or 3 years by council valuers and published on their websites

http://www.aucklandcity.govt.nz/council/services/ridonline/default.asp

if you want to get a rough picture of what's happening in a suburb check a few trademe ads with the 3 recent sales at the bottom, note those sale prices and then using a council rates webpage see what the CV's for those properties are, then divide the sale price by the CV to get % it sold for over or under the CV

the more properties you run through that calculation

the more accurate the picture you will develop for that area

[The Property Store]

Eri a cv means nothing any where in regards to a properties market value. Sorry i always talk in terms of RV being registered valuation; i don't have time to muck around with trade me ads and dividing by the cv.........good trick though. I just get valuers to tell me what i need to know especially in an area i don't really know.
Ask me about Taupo though and that's a different story as that is my "farm".
Cheers

[eri]

how much does an auckland valuer charge you to tell you "what you need to know"?

[The Property Store]

what i need to know is the current value of a property...........freudin slip there.

[eri]

and how much is that?

just askin

[The Property Store]

i haven't bought any property in Auckland so don't have a valuer I work with there.
Costs me about $400 to 500 in either Rotorua or Taupo.

[Ivan McIntosh]

About $500 in Auckland, plus GST

[Micholas]

thread jacked

Is there any benefit to getting the house revalued straight after the reno is finished even though I wont be needing to use the equity for quite a while?

[The Property Store]

Not really Micholas; valuations are only valid for a certain period - 3 to 6 months depending on the lender or market behaviour

[DaveW]

Micholas, yes get the same valuer that told you it would be worth $500k after you've done it up.

By the way, did you or the agent tell the valuer what you paid for it before you got him to do the valuation? (not a good idea).

The banks will then consider this new valuation once you've owned the property for 6 months - although there are some lenders that won't wait that long to secure your business. Ask your broker.

You might as well put the house on tradeMe for sale (as well as for rent) when its finished. You never know your luck, you might make yourself some money to put into the next property to repeat. You'll probbaly have to pay tax though so keep all your receipts and have a talk with a good property accountant before going down this route.

If you can make money in your own street and on your first deal, then the city is your oyster. Just make sure your valuations stack up during your due diligence. Good luck.

[donna]

I have stuck this thread for a while - it is a good read.

cheers,

donna

[Micholas]

Thanks for the sticky Donna, suppose I better post an update!

So far it has been just over 2.5 months since settlement and we have been working on the house every day after work and all weekends. I must say that the energy levels aren't what they were when we started!

Points worth mentioning:

Almost finished gib stopping - what a learning experience that's been! We take much longer than a professional obviously but must have saved a lot of money. Have spent a good amount of hours sanding off excess plaster.

Had a plumber friend of a friend come and replace 3 skylights for us which were leaking through the roof, he didn't do the job properly so had to come back and fix it, then they were still leaking so we have attempted to fix ourselves and are waiting till it rains next to see if we're good to go. He charged $30 an hour cash which is his cash rate he said haha. Will be finding another plumber for the other work.

Kitchen designed and in the process of getting prices from people, will be going to Mitre10, Bunnings. Are there any other places I should check out? Will be getting a nice benchtop, but are price-sensitive on the rest

Still need to put a screed coat of Gib4 plaster onto the existing walls (to sort out the nicks and crappy surface from removing wallpaper etc)

Going to be tiling the upstairs bathroom ourselves, my dad's done it before so should save a bit of moolah there.

Have cut down all the crappy trees which has made the place look so much bigger. All the neighbours have been commenting haha. We now have a huge pile of cut greenery on the lawn that we need to take away. Cringing at the thought of the cost...pretty keen to dump it in a field somewhere (shhhhhhh) put probably won't.

Have been reviewing the pricing of similar properties in Birkenhead and am now confident our goal of $500 per week will be achievable. Might even be able to get more, see this similar property on trademe going for $520 pw - Trademe Listing: 381391535

Won't be long before I need to be fully clued up on what it takes to be a landlord. I'll be putting 'landlord lives very close by' or similar in the trademe listing to hopefully weed out some of the riff raff who want to have parties all the time haha...

We've got 8 small bits of gib with test pot paint on them waiting for another coat so we can pick our colour, going for neutral colours and will be painting the interior/exterior ourselves to save another small fortune

I know the holding costs will be much larger than if we got tradesmen in for all of the jobs, but this is still by far the cheapest option. Plus I've taken a liking to the DIY side of property investing/developing haha. Might make it a full time career!

If anyone has any more advice I'd be keen to hear it

cheers