Reasons to not buy an IP outside of Auckland?

[Maccachic]

BC mintues have to be provide now there is no opt out clause but I would still get an inspection done. Agreed the LTMP should help just need to make sure the person who carried them out actually knows what they are doing and that they have done a thorough apprasial, have heard of a lot of property managers doing their own - whether they are qualified to do so I guess will become apparent in the years to come. Question will be who is liable for insufficient plans - Body corporates / sellers?

[Glenn]

I'm still looking for my first IP and most 3 bedroom homes in Nelson in a reasonable area are over $300,000 by quite a bit and the rents are really crappy. I've always thought It would be a better long term investment to buy a house rather than a unit. Could be my thinking is scewiff ?

You better start looking more carefully.
One property I manage just sold. Rent $380 sale price around $270000. It was a four bedroom stand alone house in the Brook with a double garage. Probably about 15 years old. I was asked to find a tenant. The out of town owner had bad experiences with another property management company and then tried doing it himself and made a worse mess of the job. I got $40 a week more than he had been been getting and the property was on the market for sale. Getting a good tenant made the job of my REA freind much easier.
There are several other deals out there that are bringing in around 7% Gross. It has never been so easy to get into the business in Nelson and yet it is generally hard work finding investors at the moment.

[Looonie]

Thanks for all the input people. I understand that areas such as Te Kuiti and Moerewa may not make the greatest investment due to declining population in the areas, and while the advice to buy in a nice leafy suburb is well and good, not all of us are in a financial position to begin there...

What about areas on the outskirts of Whangarei or Tauranga for example, perhaps some more affordable properties there and two towns that should have substantial industry and utilities to continue growing?

Or is it still possible to get good return on units/townhouses in Auckland?

I understand the concern with buying an IP out of Auckland and said property not growing in capital gain at the same rate Auckland will, so potentially not helping to procure more properties in Auckland, however I really want to get started somewhere, and preferably soon as its a time game so the sooner I start the better the end result will be. I don't feel the justification is there to wait and save for another 2 years just to get entry level in Auckland as the growth seems to be well outstripping my savings capabilities.

[Glenn]

Thanks for all the input people. I understand that areas such as Te Kuiti and Moerewa may not make the greatest investment due to declining population in the areas, and while the advice to buy in a nice leafy suburb is well and good, not all of us are in a financial position to begin there...

What about areas on the outskirts of Whangarei or Tauranga for example, perhaps some more affordable properties there and two towns that should have substantial industry and utilities to continue growing?

Or is it still possible to get good return on units/townhouses in Auckland?

I understand the concern with buying an IP out of Auckland and said property not growing in capital gain at the same rate Auckland will, so potentially not helping to procure more properties in Auckland, however I really want to get started somewhere, and preferably soon as its a time game so the sooner I start the better the end result will be. I don't feel the justification is there to wait and save for another 2 years just to get entry level in Auckland as the growth seems to be well outstripping my savings capabilities.

I have just scim read the posts and there is one aspect that all the good pc people on PT have not mentioned.
As a first time or new investor do no overlook culture differences.
I am not being racist but from one side of Auckland to the other the tenants are very different. So to around the country.
Even the mediators at DBH are different from one town to the other.
As an investor you have to upskill to understand the way your tenants think about life.
Like heading off for a month when a distant relative dies and funding the trip out of the rent money.

[eri]

if you are going to buy something "extremely affordable"

you are going to want to "know" something everyone else doesn't

how you are going to do this if you live hundreds of km away is a bit of a trick

how you are going to manage a cheap property in a far and distant small town

is going to be another huge challenge...

imho

stay local

until you have enough knowledge to start answering more ? than you ask

[NovInvestor]

There is nothing wrong with units.

Yes sure there are other owners in the block, that's why you should check out the condition of the whole block and also the surrounding area. Nice block = nice owners.

Also units bring good yield and often less maintenance cost, as most of them have brick/concrete block walls, and some dont even have lawns.

The good yields will support your standalone town house/houses, where later on when you have got some equity from inflation/time, feel free to sell of the units, if you think houses are more manageable.

Buy units close to CBD, don't buy units out too far, ie don't buy units in a house area.

This applies very well to Auckland Central, ex Auckland City

[Ahar]

I have just scim read the posts and there is one aspect that all the good pc people on PT have not mentioned.
As a first time or new investor do no overlook culture differences.
I am not being racist but from one side of Auckland to the other the tenants are very different. So to around the country.
Even the mediators at DBH are different from one town to the other.
As an investor you have to upskill to understand the way your tenants think about life.
Like heading off for a month when a distant relative dies and funding the trip out of the rent money.

Cultural differences is one of the reasons I stay out of "deepest darkest South Ak"

I just don't understand some people......and like you I don't consider myself to be a racist.

Got a couple of 2 beddie flats in Beachhaven.....cheapest area on the North Shore and has it's fair share of Maori, and Pacific Is'ers.

Rented one unit to a Maori lady and her daughter.....she understood and agreed that only 2 people would live there.

Well according to the neighbour, there were 9 people living in this flat....lord only knows where they all slept, the 2nd bedroom was only a small single

But just try proving they've breached the terms of the rent contract

Another time, rented to a Samoan couple.....also were aware that the limit was 2 folk....actually they were expecting twins, so I said we'd alter that section when the time came

Well, once again, there were more people living in the flat than agreed.....there were 6 of them

I just don't understand where these people are comming from

Both sets of tenants were professionally qualified.....and earned good money, so it wasn't a poverty thing

But what really got me was the fact that they both were happy to say one thing and do something completely different....i.e. lie thru' their back teeth

I just don't have this same problem with my other tennants.....they all stick to the number limits I place on the property

So now I just don't rent to some folk

[Glenn]

So now I just don't rent to some folk

You are on to it. Yes spot on.
I tell you though the same crap happens at the other end of the spectrum.
I have a young lawyer and his ever so lovely wife and adorable child.
They were renting off a friend. Friend is a loving smart Doctor and his also smart wife. Friend tells me they never paid their bond and were always late with their rent.
Well they tried that a little bit with me. The bond got sorted right up front. No tenancy agreement without money. They get a nice precise text message when they miss the rent (sorry call that late)
I do not stand for that nonsense regardless of the desire to be nice and loved by my tenants.
It is actually sometimes harder dealing with tenants who come from the good side.

It is all about culture.

Us property managers have to be multi skilled with skins like a hippo and a heart like mother Teressa.
Actually no disrespect to the good lady but I think she would have identified with what I say.
It is not about being too hard or business only. But you need to be able to say it like it needs to be said when the other side starts on trying to convince you.

[eri]

i've found

lawyers

to have profoundly different characters

from Doctors

while their earnings may be similar

the way they earn it

is really really different

[Ahar]

i've found

lawyers

to have profoundly different characters from Doctors while their earnings may be similar the way they earn it

is really really different

Yep, whilst they both are known to do "dirty" work, obviously different dirt has differing qualities.

Some dirt has been known to stick to the professional practitioner

[flyernzl]

Rule 2 of my tenant selection rules:

Never let to anyone who has a law degree or who drives an Audi.

[TheLiberalLeft]

Ummmm, the owner of an A2 is a little different to the owner of an S8, flyer. Christ, there's enough variation in the A4 model alone to assume different personality traits.