Mortgagee Auctions & Mortgagee Sales (Foreclosures) in New Zealand

[Monid]

The reason I posted this article was to receive feedback from those who have had experience in purchasing mortgagee real estate. I haven't had many stories from people yet as to investments they have made. Please give feedback someone

Hi Jeremy
Our first investment property was a mortagee sale as detailed here: http://www.propertytalk.com/forum/sh...ad.php?t=10773

But the long and the short of it was that it was owned by an investor not the tenants which made things easier in terms of getting things out and things not being "too" trashed. It was worrisome though since someone had already gone bust trying to make money out of the property . The place was aesthetically rough, it had been built in the 1970's and I would swear no-one had done anything to tidy it up since! The wallpaper was actually worn away at human height but still intact above and below... It was a four bedroom brick house in Rotorua which we eventually got for our top price of $40000. We spent $10000 and a lot of sweat bringing it up to a standard we considered liveable in. It rented then for $170 and now rents for $180.

We have looked at Mortgagee sales since but haven't dipped our fingers back in, too nervewracking and we never saw a property that looked like it might go as cheaply or be as reasonably hassle free.

Cheers
David

[SuperDad]

Slightly off topic, but...

David, I see you bought the Rotovegas property in early 2003, 5 years ago. Have rents only moved $10 there in that time, or are you currently underrenting it?

Paul.

[Monid]

Yeah it is in Fordlands which is the "bad" suburb of Rotorua. It was at the very top when it was originally rented out, but then our other places in Rotorua have only moved by $10. I'd be interested by others opinions of whether Rotorua has moved further than that.

Cheers
David

[Baron Silas Greenback]

But, New Zealanders are always looking for the quick buck. The very concept of wealth – real wealth, escapes them. New Zealanders think it’s a big house, a boat a fancy car, and an underserved sense of accomplishment.

Which western country doesnt have a large amount of people like this???

[jeremypyle]

New Zealand & Australia Refer to Foreclosures as Mortgagee Auctions & Sales

I know that both Australia & New Zealand give the term "mortgagee auction" or "mortgagee sale" when their are referring to foreclosure auctions & sales. Does anyone know which other countries in the world also refer to foreclosure sales as mortgagee sales?

I know that in America, you call them foreclosures. What are they referred to in the European countries like England, Scotland, France, Uk, etc.?

[Halfway To Paradise]

Yeah it is in Fordlands which is the "bad" suburb of Rotorua. It was at the very top when it was originally rented out, but then our other places in Rotorua have only moved by $10. I'd be interested by others opinions of whether Rotorua has moved further than that.

Cheers
David

Seems you got a real bargain when you bought. I am renting property in Rotorua and I have been happy with the rent I have been getting. We have 4 x 2 bedroom units returning $180, $185, $195 & $210. I do feel there is upward pressure on rents in Rotorua. I have steered away from Fordlands as a wary 'newish' investor. Have you had any problems with tenents in that area. We also live in Rotorua and have been more than happy with the capital growth in the area.

Robert

[Monid]

Seems you got a real bargain when you bought. I am renting property in Rotorua and I have been happy with the rent I have been getting. We have 4 x 2 bedroom units returning $180, $185, $195 & $210. I do feel there is upward pressure on rents in Rotorua. I have steered away from Fordlands as a wary 'newish' investor. Have you had any problems with tenents in that area. We also live in Rotorua and have been more than happy with the capital growth in the area.

Robert

We were pretty happy with it, we only wish we had been able to pick up more at that price. We also have 2 x 2 bedroom units returning $165 each in Selwyn heights, depending on were yours are sounds like it might be time for us to have a chat to the managers...

We went into Fordlands with our eyes wide open and there were plenty of houses I would have touched with a bargepole there. I certainly wouldn't buy there unless the property was strongly cashflow positive on it's own merits (ie without a deposit). That said we have had less trouble with tenants there than we have had in our other properties, funnily enough that property has probably been our best performer seeing as it hasn't had any major repairs (yet) been rented for all but two weeks since it was available to rent and tripled in value. We like Rotorua and in the long term want to pick up more properties there, sticking to our rule though that they have to be cashflow positive...

Cheers
David

[essence]

Checking on rent levels

Hi David

Check out this link http://www.dbh.govt.nz/market-rent?Region=4 , I'm not too sure which area Fordlands is in, but it will give you a good indicator of recent rent levels.

Comparing what you've quoted, and what's listed on the DBH website, it looks like your rents are a little light.

Let us know how you get on.

[Monid]

Hi Essence, unfortunately the housing NZ site masks Fordlands by including it with other much higher rent suburbs. As such it has been little guide to the market rent in the area. Nonetheless I think we are probably a little under so I will talk to our agents about it.

Cheers
David

[jeremypyle]

I'd still love to hear more stories

Who would want their stories written in a book?

[jeremypyle]

My websites traffic is increasing quite significantly

[Halfway To Paradise]

We were pretty happy with it, we only wish we had been able to pick up more at that price. We also have 2 x 2 bedroom units returning $165 each in Selwyn heights, depending on were yours are sounds like it might be time for us to have a chat to the managers...

We went into Fordlands with our eyes wide open and there were plenty of houses I would have touched with a bargepole there. I certainly wouldn't buy there unless the property was strongly cashflow positive on it's own merits (ie without a deposit). That said we have had less trouble with tenants there than we have had in our other properties, funnily enough that property has probably been our best performer seeing as it hasn't had any major repairs (yet) been rented for all but two weeks since it was available to rent and tripled in value. We like Rotorua and in the long term want to pick up more properties there, sticking to our rule though that they have to be cashflow positive...

Cheers
David

While we are in the Glenholme area which benefits from being close to town I think you could probably easily get away with sticking another $10 on the Selwyn property rents. How long have they been in? when did you last increase? The property we are getting $195 on had tenents in when we bought it and they had been paying $170 for over 3 years. So when we told them it would have to go up to $195 they were still happy to stay. I think it is easy to get into a position of not raising rents in case the tenent gets peed off.

You say you have property managers? I was with one particular PM in Rotorua, and I am sure they had no interest in raising rents, but resting on thier laurels and taking there pretty secure & easy percentage. This particular PM was charging $165 for our property so we moved it to another PM (who was looking after a couple of our other properties) and they raised it to $175 and we still have a very happy tenent.

Another point I would like to add about when we changed PM our repairs bill dropped dramatically. With our first PM there always seemed to be jobs needed doingthat the PM was only too happy to send out the repair man. You can read between the lines on what my thoughts were on that one.

Robert

[jeremypyle]

While we are in the Glenholme area which benefits from being close to town I think you could probably easily get away with sticking another $10 on the Selwyn property rents. How long have they been in? when did you last increase? The property we are getting $195 on had tenents in when we bought it and they had been paying $170 for over 3 years. So when we told them it would have to go up to $195 they were still happy to stay. I think it is easy to get into a position of not raising rents in case the tenent gets peed off.

You say you have property managers? I was with one particular PM in Rotorua, and I am sure they had no interest in raising rents, but resting on thier laurels and taking there pretty secure & easy percentage. This particular PM was charging $165 for our property so we moved it to another PM (who was looking after a couple of our other properties) and they raised it to $175 and we still have a very happy tenent.

Another point I would like to add about when we changed PM our repairs bill dropped dramatically. With our first PM there always seemed to be jobs needed doingthat the PM was only too happy to send out the repair man. You can read between the lines on what my thoughts were on that one.

Robert

What you say is true. Property managers at times are too quick to send out repair men because they get a cut of the repair cost.

[xris]

Yes, under renting for a property manager should be a capital offence. I agree it happens too often. there may sometimes be good reasons for keeping the rent at the bottom of the market range but this is not the same as under renting.

xris

[Glen]

Who would want their stories written in a book?

What's the context of the question? Are you asking/offering?,.............What's it worth?