Investing in the Bay

[Bay Investor]

Like most first time forum posters I’ve been looking at this forum for awhile and have found the information incredibly useful.

Some background I’m 25, I live (flat) and work in Auckland and am on a good salary.Before finding the forum I purchased an investment property in Whakatane, luck more than good decision making resulted in me buying a nice place in a very good part of town returning just over 7% yield – so just cash flowpositive with 20% deposit .

The reasoning behind buying in Whakatane was that my folks relocated there in the last 5 years and have experience managing rental properties – this results in a well looked after place with no property management costs but the need to buy in a good area so that the place doesn’t require too much management. If I’d have found this forum before the purchase I would have done some things differently but I’m going to stick with the place as financially the result has been ok.

I purchased the place under GV in Dec 2014 and I’ve just had the place re-valued, theresult being a valuation of just over the GV – an increase in equity (on paper)of $25K.

Since the purchase I’ve saved up another $25K and with the increase in equity I’m looking at buying another place with the $25 – 50K – My question is where?

Auckland isn’t an option as I’m looking for a casflow positive property ( or something that is close) and I don’t have an Auckland sized deposit, therefore I’ve been watching:
Whakatane –It’s a small town, is having two or more places in a small town risky?
Kawerau –Prices are low, yields are high and prices have risen significantly in the last few months.
Tauranga –Higher prices, likely to be better capital gain, lower yields.
Rotorua –seems to me to sit somewhere in between Tauranga and Kawerau

Thanks for reading - id be keen to here peoples opinions !

[muppet]

Artical about Rotorua in the latest Property Investing Magazine
could be worth a read.

[Rosco]

I would suggest starting with the population figures and growth for each area. If population is declining then do you really want to invest there?

Then sit down and write down some 5-10 year goals. Then start to build a plan on how you could reach your goals and what you would need.

Then review properties and areas, are they part of your plan and do they help you achieve your goals. If not, don't buy them!

Ross

[BigDreamer]

I always failed to understand why so many investors on PT are against Rotorua. It will never die down because it is a tourist destination and the government would back it up.

[Grads]

Yep nothing wrong with Rotorua, just make sure you don't invest in the right areas. You can find good yielding properties but you won't get the capital growth compared to area like Tauranga. I wouldn't invest in Kawerau (personal view) and Whakatane is fairly small.

[Maccachic]

Whakatane does have services - Hospital etc personally I wouldn't mind a bit of land for the future when Tauranga gets too big for me. However values are a bit high to just sit on it - coastal property in the area has already become very popular.