New to Auckland, hate renting - Buying house using equity

[Psilan]

Hi

Just after some friendly advice for a newbie buyer.

I have a Christchurch home in Avonhead I would like to keep. It only just covers itself while a family member rents it. (soon to change!)

$200k owed to bank
$300k valuation (pre EQC improvements)
$300k GV

I would feel comfortable using 50k out of my rental to get myself a deposit to buy something in Auckland at ~$300k.
I will be living in the house, and it can be a weekend do-up.

2 incomes contributing, and I can get more than $300k, but I don't like to be in too much debt.

What Auckland areas should I go for? Desirable to be as close to the CBD as possible.
Any school zones stay in? Or am I wasting my time with this question at $300k?
Following the train line beneficial?

I'd like to stay on the CBD side of Auckland, otherwise I'll have to buy another car.

Advice appreciated .

[KyronGosse]

At 300k the only chance you have is buying an apartment or a unit somewhere. If you want a house then you will be looking either south, you can find the odd property in that price range in Otahuhu, Otara areas, but then the question is would you really want to live there.

You should probably check out Avondale, it is probably your best chance at getting something on the train line, close to motorway with second motorway due to connect up in waterview in 2015 and with a bit of hunting you can still get a house there for the high $300's.

Train line is relevant to any where you would be buying and relevant to Auckland too, however the majority of Aucklander's buy for proximity for motorways.

[DazRaz]

Avonhead should be worth more than 300K. 200K should be more than breaking even. Rents should be 300K depending on number of bedrooms etc. I would get the Avonhead property valued. You can then see a mortgage broker about finance for the new property. You also would likely want to change the mortgage for the rental to interest only. You will want to pay your new home in Auckland off first.

[Psilan]

Apartment buying sounds good in some aspects, but I just don't think I could ever bring myself to do it. No vege garden, leasehold options, body corp fees. No big renos...

Thanks for the Avondale/Waterview tip. I'll have a look around. It does look like I will have to stretch to sub $400k.

My Avonhead home is a 2BR unfortunately. But it's on 815sqm. Double garage, new kitchen, new deck, new modern paint and plaster in every room through eqc (all this after valuation).
It would be the best 2BR in Avonhead, but could be a knockdown and build because it's a small house on a corner section and has a lot of land (cannot subdivide, yet).
I would think $350k max.

Reminds me I need to look at living zones to see if anything is going to change. Subdividing would make me mortgage free...

[Keys]

You'll need a new loan to pay council fees to subdivide.

[Toasty]

Don't know much about Auckland but if you are going to keep your house in Christchurch as a rental for the long term then I would suggest a visit to an accountant. Pretty much as DazRaz says. A change of ownership and a restructure could save you a few bucks. May as well claim as many deductions on your old rental as you can. All the equity should be in your Auckland property if you are planning to live in it.

[flyernzl]

Desirable to be as close to the CBD as possible.

Why do you want to be close to the CBD? - unless you plan to work there.
Noisy, congested and polluted (and not just by diesel fumes).

86% of Aucklanders never go near the place.

If it's just a whim, then you are paying one hell of a lot just to say you live there.

[firsttimecaller]

We are in the same situation as you (and probably thousands of other Aucklanders) looking for a property not too far from the city in the 3-400 range. I have seen things come up in Waterview and Mt Albert, one property we heart-brokenly missed out on in Waterview to someone with cash basically.

Since we started looking a while ago we have greatly broadened our search to include areas which are not even convenient for either of us, but sometimes you have to go further out to avoid the middle areas that aren't that nice. So my advice for you is to not even worry about the commute, it's too late to have your cake and eat it in Auckland, and look in as many areas as you can that have decent houses, neighbourhoods and schools in your price range.

At least for you it won't be as disheartening to realise how the areas once deemed as reasonably low class are now too expensive for you to buy into as an adult...

[DazRaz]

Get your mortgage pre-approved so you can put cash offers too.

[speights boy]

Daz
I am not sure you can correctly say mortgage pre-approval is the same as not being conditional upon finance.
Pre-approval as we know simply gives us our upper limit to spend, based on serviceability, LVR and financial history.

If someone then used that to make an unconditional offer on a terrace style, monolithic cladding, no cavity system, no eaves, no flashings style of townhouse; they may well find the bank has some bad news for them.

IE: When it comes to SOME types of property the banks' confirmation that they will lend on THAT particular property may still be required.