Propeller property investment

[dongiblin]

I see on the propeller property website they are selling new build properties off the plan in flagstaff Hamilton.They consist of a 4bdrm 2bathroom house and a 2bdrm 1 bathroom unit all on a 700sqm piece of land at $595000 with a total return on both properties of $770.Has anyone had any dealings with this company?Seems like a reasonable return for a new build and maybe too good to be true?

[Keys]

Ask yourself one question.

Do they guarantee rent?

If so, don't go there.

[dongiblin]

They guarantee rent until it gets tenanted.The rental prices seem realistic and the location seems relatively good.Has anyone had any bad experiences with them in the past?

[Shane D]

I see on the propeller property website they are selling new build properties off the plan in flagstaff Hamilton.They consist of a 4bdrm 2bathroom house and a 2bdrm 1 bathroom unit all on a 700sqm piece of land at $595000 with a total return on both properties of $770.Has anyone had any dealings with this company?Seems like a reasonable return for a new build and maybe too good to be true?

That yield is a touch under 6.5% based on 50 weeks rent a year. Not too bad and probably cashflow neutral (or close to) with today's low interest rates. You could lock in a 2 or 3 year mortgage to be on the conservative side. With basically no maintenace issues ove rthe next fews years it is a nice conservative, predictable investment.

My questions would be what exactly is included in the $595k package?

You wouldn't want any surprise "extras" such as driveway, landscaping etc, as the yield is already tight.

Shane

[dongiblin]

From their website it says they are turn key investment properties fully landscaped and also the 4 berm house has a double garage internal access and the 2bdrm unit a single internal access garage.Must be too good to be true what am I missing?

[Shane D]

From their website it says they are turn key investment properties fully landscaped and also the 4 berm house has a double garage internal access and the 2bdrm unit a single internal access garage.Must be too good to be true what am I missing?

It sounds like Propeller may have hooked up with Investor Homes http://www.investorhomes.co.nz/index.html.

Investor Homes specializes in the type of build package you are talking about.

Shane

[Matt Gilligan]

Nikki Connors is the promoter I believe. She is a discharged bankrupt. When I dealt with her she was only interested in slamming deals, not interested in the client. I stear clients away from her now, our firm knew her when she was Catalyst Property . I bet you could go to the developer directly and get a big discount dealing direct. She is a middle man selling negatively geared property in a low growth economy. Just dumb business if you ask me. What happens when rates go up? The market softens, low growth and negative cash flow.

Put your money in Auckland and look for net yields above 7%. They are there.

[elliot]

Matt do you apartments in auckland to get a net 7% yield. I think the same. Just rerenting 2 properties in rotorua top area and surprised at the lack of interest. Certainly need to look at higher growth areas but auckland prices have now bolted.

[Craig Pope Mortgages]

Hi Dongiblin, you see it written quite often that you make your money when you buy a property. So if you buy off (or via) a property investment company they would be making a cut so in my opinion you pay a premium for someone else to do the work. This is fine if you are busy and don't have time to find a section and build yourself. You may do it cheaper if you had sourced the section and managed the build yourself?
I would recommend getting your own valuer to look at it though.

[Matt Gilligan]

Hi Dongiblin, you see it written quite often that you make your money when you buy a property. So if you buy off (or via) a property investment company they would be making a cut so in my opinion you pay a premium for someone else to do the work. This is fine if you are busy and don't have time to find a section and build yourself. You may do it cheaper if you had sourced the section and managed the build yourself?
I would recommend getting your own valuer to look at it though.

Agree entiely.

[cube]

More on Propellor's charging structure and history here: http://www.nbr.co.nz/article/new-fre...company-102087

[Matt Gilligan]

Matt do you apartments in auckland to get a net 7% yield. I think the same. Just rerenting 2 properties in rotorua top area and surprised at the lack of interest. Certainly need to look at higher growth areas but auckland prices have now bolted.

How long is a piece of string ? It depends on what string. Auckland is a large place and quality, demand and buildings vary massively. Even in the CBD you have leaky apartment buildings and good ones.

I think apartments are a cashflow play in Auckland, yet at time of writing this they have inflated to their former peak value making their cashflow relatively poor and the capital growth prospect low. However there are sometimes bargains around, they are just a bit thin on the ground in Auckland if you are a bargain hunter at present.

Get in touch with grant Hoey at Proeprty Tutors. The guy owns 30+ apartments and is a central AK apartment guru. Ive purchased a couple of apartments during the recession for around $100k ( with net yields of 12%) and I rang him when I was doing it. He seems to know every building and the leaky ones....you need to watch CBD apartments for leaking.

Also as a rule I prefer to buy assets with land, - for the capital growth. You can get net yields in this market in South Auckland of 7-8%. In my view these properties will get similar cashlow to Apartments but better capital growth. The time to buy apartments is in the middle of a proeprty crash, not a boom. They are very volitile in value...timing is difficult right now unless you really know what your doing and you are deep in the market. talk to Hoey....

[Contrail]

They guarantee rent until it gets tenanted.The rental prices seem realistic and the location seems relatively good.Has anyone had any bad experiences with them in the past?

I bet whatever tenant they get will be paying a lot less than the guaranteed amount

[Roberto9]

I bet whatever tenant they get will be paying a lot less than the guaranteed amount

the rental guarentee is usually built into the purchase price, so I'd be looking to see what I could buy for $35-$40k less, and do some sums on what that might return.

[mortgage broker]

You probably want to check the area, Hamilton is very different to Auckland in that you drive for 10 minutes and be in an area with lifestyle blocks.