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Two disclaimers before I begin.
1. While this is going to be the story of my wife and me in terms of property investing I’m going to write in first person and say I rather than we. Apologies, to my wife, but I think it reads better that way.
2. We are not super investors certainly not in the same league as folk like Dean or Robyn. For a fair while I’ve let that put me off doing one of these my story things, both on the don’t have as much to share front and on the don’t like to blow my own trumpet front.
3. Simone's disclaimer: Having just found out that David has pasted our life story on the net without warning me I was initially shocked and reticent to have so many strangers to be reading the intimate details of my personal finance. Lucky for him I did read it because I found a whole lot of misremembered reporting going on! However having read through all the posts and having seen how helpful people are finding it I have agreed that it should remain in all of its riveting glory
for everyone's enjoyment and education, on the condition that the information not be used for comparative bolstering of anyone's egos. We are what we are and we are pleased with it.
However thinking about it recently it occurs that while the super investors are very inspiring they are also somewhat off putting (no offence guys
) because they are so darn super… And there is only so much room in the market for super investors not everyone can consume that many properties, and not everyone wants to. I thought people might enjoy a somewhat different story of a somewhat risk averse small scale investor, and they might find it more in tune with where they are or where they might be heading.
In terms of format I’m basically going to walk you through several property investing decisions we have made, why we have made them and what we have learnt from them. I’m going to do this sequentially from our first property to our last and I am going to include some of the properties which got “away” either because we didn’t want them or they were snapped up before we got there…
I’m going to try and post a story of one investment decision every day or so, but in the meantime, between posts feel free to ask me questions and I will endeavour to answer them J
I’ll start out before we bought our first property (our home) with a wee bit of background about myself. My mother was a School teacher, highly educated and is now racing me to complete her PhD. She now lectures at Massey University in the School of Education. My father is the complete opposite, dropped out of school when he was 15 and became an entrepreneur starting several businesses. He did best when having spent the night in a bar talking to a plumber. The plumber told him that the best shower mixer in New Zealand at the time was the feltonmix mixer, but it was almost impossible to get hold of because the Kiwi company that made it did a terrible job of marketing it and distributing it. The next day dad walked into the company and asked to speak to the boss and told him what the plumber said and offered to take over distribution… And the rest was history, dad is the reason that half the cheap rentals in the country at least have decent shower mixers. That business ended when the owner’s sons on the advice of the accountants cancelled the distribution agreement. He then opened a plumbing supplies store which went south rapidly, basically the margins were too low to compete (20% retail 5% or less to trade.) Now he runs a specialist soccer shop www.soccerscene.co.nz So I am the son of an educator and an entrepreneur. J
Basically I’m a philosopher by training and trade, although while I studied for my first degree I worked in my father’s plumbing supply shop and did bathroom designs. I studied mostly philosophy interspersed with political theory, sociology and a touch of economics. Once I finished my undergraduate I was addicted to philosophy, and so continued on studying concentrating in my Masters on Philosophy of Religion and Ethics, and in my PhD (Which I will hand in by the end of the month!) on Political Philosophy and Bioethics. My interest in the last was spurred mainly by my first wife Kerry who had cystic fibrosis. As such I became her primary care giver and learnt more than I ever wanted to know about medicine, doctors and the ethics of medical practise. At the end of 1999 Kerry passed away. In 2000 I met Simone my present wife.
Okay that’s enough for a first post, and a tease since there has been no actual property information yet. Tell you what I will share our current buying rules:
1. Property must be cashflow positive or neutral when conservative figures are used (for rent, repairs and maintenance) and capital gains/ depreciation aren’t taken into consideration.
2. Property must be in an area that is growing or at least diminishing at a very slow rate.
3. Property must be such that we would be happy to live in it ourselves (the anti-slumlord clause).
4. Property must not take our LVR above 65%.
5. We must have at least $5000 readily accessible per property dwelling for emergencies.
6. In addition to the above we must have at least enough dollars available to service 50% of our properties being empty for a month.
7. Must have a plausible exit plan that will work in reasonable whatif scenarios.
Any questions, comments or suggestions fire away J
Cheers
David
1. While this is going to be the story of my wife and me in terms of property investing I’m going to write in first person and say I rather than we. Apologies, to my wife, but I think it reads better that way.
2. We are not super investors certainly not in the same league as folk like Dean or Robyn. For a fair while I’ve let that put me off doing one of these my story things, both on the don’t have as much to share front and on the don’t like to blow my own trumpet front.
3. Simone's disclaimer: Having just found out that David has pasted our life story on the net without warning me I was initially shocked and reticent to have so many strangers to be reading the intimate details of my personal finance. Lucky for him I did read it because I found a whole lot of misremembered reporting going on! However having read through all the posts and having seen how helpful people are finding it I have agreed that it should remain in all of its riveting glory
for everyone's enjoyment and education, on the condition that the information not be used for comparative bolstering of anyone's egos. We are what we are and we are pleased with it.However thinking about it recently it occurs that while the super investors are very inspiring they are also somewhat off putting (no offence guys
) because they are so darn super… And there is only so much room in the market for super investors not everyone can consume that many properties, and not everyone wants to. I thought people might enjoy a somewhat different story of a somewhat risk averse small scale investor, and they might find it more in tune with where they are or where they might be heading.In terms of format I’m basically going to walk you through several property investing decisions we have made, why we have made them and what we have learnt from them. I’m going to do this sequentially from our first property to our last and I am going to include some of the properties which got “away” either because we didn’t want them or they were snapped up before we got there…
I’m going to try and post a story of one investment decision every day or so, but in the meantime, between posts feel free to ask me questions and I will endeavour to answer them J
I’ll start out before we bought our first property (our home) with a wee bit of background about myself. My mother was a School teacher, highly educated and is now racing me to complete her PhD. She now lectures at Massey University in the School of Education. My father is the complete opposite, dropped out of school when he was 15 and became an entrepreneur starting several businesses. He did best when having spent the night in a bar talking to a plumber. The plumber told him that the best shower mixer in New Zealand at the time was the feltonmix mixer, but it was almost impossible to get hold of because the Kiwi company that made it did a terrible job of marketing it and distributing it. The next day dad walked into the company and asked to speak to the boss and told him what the plumber said and offered to take over distribution… And the rest was history, dad is the reason that half the cheap rentals in the country at least have decent shower mixers. That business ended when the owner’s sons on the advice of the accountants cancelled the distribution agreement. He then opened a plumbing supplies store which went south rapidly, basically the margins were too low to compete (20% retail 5% or less to trade.) Now he runs a specialist soccer shop www.soccerscene.co.nz So I am the son of an educator and an entrepreneur. J
Basically I’m a philosopher by training and trade, although while I studied for my first degree I worked in my father’s plumbing supply shop and did bathroom designs. I studied mostly philosophy interspersed with political theory, sociology and a touch of economics. Once I finished my undergraduate I was addicted to philosophy, and so continued on studying concentrating in my Masters on Philosophy of Religion and Ethics, and in my PhD (Which I will hand in by the end of the month!) on Political Philosophy and Bioethics. My interest in the last was spurred mainly by my first wife Kerry who had cystic fibrosis. As such I became her primary care giver and learnt more than I ever wanted to know about medicine, doctors and the ethics of medical practise. At the end of 1999 Kerry passed away. In 2000 I met Simone my present wife.
Okay that’s enough for a first post, and a tease since there has been no actual property information yet. Tell you what I will share our current buying rules:
1. Property must be cashflow positive or neutral when conservative figures are used (for rent, repairs and maintenance) and capital gains/ depreciation aren’t taken into consideration.
2. Property must be in an area that is growing or at least diminishing at a very slow rate.
3. Property must be such that we would be happy to live in it ourselves (the anti-slumlord clause).
4. Property must not take our LVR above 65%.
5. We must have at least $5000 readily accessible per property dwelling for emergencies.
6. In addition to the above we must have at least enough dollars available to service 50% of our properties being empty for a month.
7. Must have a plausible exit plan that will work in reasonable whatif scenarios.
Any questions, comments or suggestions fire away J
Cheers
David
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