Wishing to Start Young

[Invader_X]

Hi all,

Hoping some of you can shed some advice to someone who has just started life.

So I got my degree out of the way and after 1.5 years of temp/casual work I finally landed a full time, permanent corporate job.

My whole objective of getting into investments and property is because I want to live and lead comfortable and high quality of life here in New Zealand without having to move to Australia as some of my hobbies are illegal over there).

I am currently 23 years old and earning $45,000 - $48,000 per year depending on my performance ($45,000 is the base salary).

I live at home with the family and don't have to pay any rent or any other costs. The only expenses I have are fuel for transport (fixed) lunch, leisure and hobbies (variable).

I think by the time I am 30 I will look back and think that sucking in my ego and choosing to stay at home rather than move out was a good choice.

My parents have equity on their property and have offered to help with my first investment property that I am planning on buying and renting out. Is this the right time to be buying given with increases in the OCR and the nearing general elections.

I really like the Dannemora, Flat bush and Mission heights area.

If anyone has any general tips for beginners and point me in the right direction where I can start researching in that would be good. There are a lot of hot property press opinions out there but they all seem very biased - probably linked to developers/real estate agents.

Thanks all!

[Leftette]

You've piqued my interest. What hobbies do you have that are illegal in Oz, but, presumably, legal in NZ?

I thought it was usually the other way round. Marrying your sister, for example, is relatively commonplace in Queensland, I believe.

[Shane D]

Invader X,

I have done quite a bit of property research in the Dannemora and Flat bush area as part of my job.

You are looking at minimum $850,000 for the older (up to 10 years old) 4 bedroom, double garage type properties in Dannemora and Flat Bush and closer to $ 1 million for the new 5/6 bedroom houses being built around Flat Bush.

As a young person looking at your first property, I would be looking somewhere else. I would focus on a more established area with lower price points. Pakuranga is nice and close by the area you are looking at. For that kind of money you could pick up a legal Home and Income in Pakuranga returning around $900 a week in rent. Obviously less if you lived in one and rented one.

Shane

[Invader_X]

Hi Leftette,

Sure!

First hobby is called Airsoft, it is similar to paintball but rather than gelatine paint filled projectiles we use smaller 6mm BBs


Second hobby is not 100% illegal but heavily restricted are tuned cars.

Two hobbies that I will have to be spending less resources in very soon.

[BigDreamer]

Dannemora and Flat Bush are so expensive at the moment. I don't think they make good rentals either (from a rental yield point of view). Have you talked to a bank to check how much you are able to borrow on your income? That would be the first point in my opinion otherwise you might be looking at properties out of your reach.

[elguapo]

I really like the Dannemora, Flat bush and Mission heights area.

I'm a bit doubtful there is much in that area that you could afford. Yields are terrible too, unless it's a 1 bed former leaky. If you looking in the Auckland area, it's going to be Papakura with a 2 bed unit or similar. You might want to look further afield, however that brings all the other associated complications for management etc.

[BigBadWolf]

I just turned 22, and my thinking is that my partner and I will be having kids about 5 years from now, so I am buying an investment that I can pay down enough to be cashflow positive by then to make things easier when my girlfriend is off work with the kiddies for a few years.
Once my girlfriend (hopefully wife by then) goes back to work when we are around 30 then we would be able to start investing much more aggressively in property if that is what we still want to do.

If I were you, I would be looking down the road in Hamilton for something that you can get with a more manageable level of debt to let you have the freedom to get married and have kids and all the other things that people do when they are young.

[PTILoveYou]

Welcome Invader_X.

Your idea of start invest early is good.

However, your area of choice may not suit you, as Dannemora, Flatbush (newly subdivided ones right?) and Mission Heights are all good home owner areas, but EXPENSIVE!

Perhaps you should look at higher rental return areas like Central Auckland units, or townhouses in Avondale/New Lynn, or units/houses/townhouses in Papatoetoe.

If you buy one in Dannemora/Flatbush/Mission Heights, you will be stuck with just one rental for a long time, as value increase opportunities are low, and rental return (yields) are low too.

[BigDreamer]

I don't find Central Auckland units as high rental return. They might have potential for capital gain but wouldn't have thought a good rental return.

[BigDreamer]

I'm referring to the current market prices of central Auckland units, by the way.

[PTILoveYou]

I don't find Central Auckland units as high rental return. They might have potential for capital gain but wouldn't have thought a good rental return.

Yeah the yields are pretty bad, only really feasible if you add another bedroom to add more rent.

Perhaps you should look south or west.

Your first few purchases will need to give you both equity and cashflow to get you going.

[BigDreamer]

Invader_X - I suggest you refer to this thread: http://www.propertytalk.com/forum/sh...time-to-invest

[Bluekiwi]

For the first house I would keep it simple.
Go and see a mortgage broker and ask him how much you can spend.
Mike Kingston at Mike Pero I would recomend.
Get pre-approved so you can buy if you see a good deal.

Then find the best area that you can afford, which could be Clover Park or Flat Bush on the edge of Otara maybe.
Spend about 2 months going to all the open homes in the area, and talking to agents so you know the area.
Find a good deal that needs work.

Move in with your friends and flat mates.
And upgrade and renovate it.
So you are buying below value, adding value, and giving it time in the market.

That should give you a decent chunk close to 100k of equity and added value.
And give you the funds to move on to the next step.

[Bluekiwi]

Invader X,

I have done quite a bit of property research in the Dannemora and Flat bush area as part of my job.

You are looking at minimum $850,000 for the older (up to 10 years old) 4 bedroom, double garage type properties in Dannemora and Flat Bush and closer to $ 1 million for the new 5/6 bedroom houses being built around Flat Bush.

As a young person looking at your first property, I would be looking somewhere else. I would focus on a more established area with lower price points. Pakuranga is nice and close by the area you are looking at. For that kind of money you could pick up a legal Home and Income in Pakuranga returning around $900 a week in rent. Obviously less if you lived in one and rented one.

Shane

Hi Shane,

Have you stopped doing your job that involved traveling oversease most of the time.
And have "really" become a Barfoots Manukau agent.

Cheers Paul

[DBrown]

Hi Shane,

Have you stopped doing your job that involved traveling oversease most of the time.
And have "really" become a Barfoots Manukau agent.

Cheers Paul

hmmmm.....??