Where to start...

[AdaSmi]

Hey guys, I'm new here and am seeking advice on getting into the property scene. My fiancé and I own one property together which we purchased approx two years ago in the Waikato and have now got about 100k equity in it. We're getting this ready for rent and hope to do this in the next couple of months.

While the house is rented we are going to move into my fiance's mums house for cheap/free so that we can put any extra money we have towards our next property. We'd be looking to purchase the next house in Hamilton.

I guess I'm just after as much experience and knowledge as possible to be able to get into that second property with the long term goal of building a decent property portfolio. There's a bunch of questions I have unanswered In my head but there's way too many to post here so maybe if you could just share your experience in moving from owning your first property to owning a second and the steps you took to get there those answers would come out

Appreciate any help!

[tulips]

Welcome

At its raw level its all common sense.

Your work will start and stop at tenant selection.

Go interest only so you can build your portfolio quicker.

Use a mortgage broker to remove the conflict of interest
dealing directly with the bank.

Buy in quality locations for quality rents and quality capital gain.

[Rosco]

Hi AdaSmi,

My best advice is to take your time, rather than rushing in and buying a 'lemon'.

Join Waikato Property Investors Association, www.waikatopia.org.nz or there is a link on our website. It will be the best $245 you spend as it helps you talk to other investors, hear from speakers. There is a great speaker at the March meeting, so I would suggest you come along to that. As a guest it costs you $30 but you get this off the membership if you join up after. As a WPIA member you also get property investor magazine subscription, discounts on places like bunnings and ANZ. I'm on the committee so I'm a little biased!

2nd - I would start to think about your plan and strategy. You don't need all the answers yet but you want to start putting this together. Some parts are
- talk to a good mortgage broker, such as Adam from www.mymortgage.co.nz. A good broker can help you work out what you can borrow now, and what you need to keep buying.
- Are you going to buy a personal house and how will this fit into your plan and strategy?
- What skills do you have to add value?
- The obvious idea is to buy a property below real value, add value through renovations, and end up with increased equity and a rental paying for itself. This is very easy to say, but hard to do in reality. Watching others and talking to them will help a bit.
- cashflow is the normal issue. Most investors buy crap rental return properties, and either gamble for capital gain (such as auckland - which is obviously working at the moment) or else stall when the cashflow runs out

Ross

[artemis]

Read up. Several books around on property in NZ. Try the library or Trademe for free or cheap copies. Tax Structures 101 by Matthew Gilligan is a must read. Also Rental Income by our friends at the IRD, plus they have various publications on depreciation to get your head round. And Propertytalk of course,

[revdev]

Get your structures right, for tax purposes.
Be clear in your strategy of what you want to buy (3 bed standalone, 2 bed unit, Home and Income etc)
Get a good Mortgage Broker
Go to lots of open homes and learn your hunting ground inside out. Become an expert on prices etc.
Get finance pre-approved, so you can move quickly if you have too.

[Micholas]

Tax Structures 101 by Matthew Gilligan is a must read.

Someone loan me this book!

[PC]

Try this awesome place (get some of those rates back):

http://www.aucklandlibraries.govt.nz/EN/Pages/Home.aspx

[kiwibean]

Someone loan me this book!

Go and buy it you cheapskate

[artemis]

Someone loan me this book!

Try your library. Put in a request to buy if they don't have it, but chances are they do.

[kiwibean]

I just bought mine from fishpond for under $40

[artemis]

Go and buy it you cheapskate

Not everyone can do that.

[Micholas]

What is this 'library' you speak of? Is that a new iphone app? Just kidding... I quickly hopped on trademe after reading the comment from Artemis as lots of people have mentioned Tax Structures 101 on here (perhaps Artemis several times). There were none on trademe for sale so my laziness brought me back here! Will do some more digging.