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  • $300k to spend

    Hey,

    just trying to work out what options I have for my next purchase, budget is $300k max. I'm thinking about buying two cheapies, probably NI. In any case I need 8% yield or better. The other option would be to go for one better quality, but I need the same yield. It doesn't matter where the property is. Any suggestions re areas or specific properties would help me clear the fog.

  • #2
    Originally posted by Eljay1 View Post
    Hey,

    just trying to work out what options I have for my next purchase, budget is $300k max. I'm thinking about buying two cheapies, probably NI. In any case I need 8% yield or better. The other option would be to go for one better quality, but I need the same yield. It doesn't matter where the property is. Any suggestions re areas or specific properties would help me clear the fog.
    Easier to get two cheaper ones around $150k each than one at $300k with over 8% yield.
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    • #3
      Where are you located? Hamilton is doing very well and you might still be able to find some decent investments under $300k. Rotorua properties have some great returns. I don't much about other areas but I know Orion has done very well investing in Hawkes Bay.
      www.PropertyMinder.co.nz
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      • #4
        Originally posted by BigDreamer View Post
        Where are you located? Hamilton is doing very well and you might still be able to find some decent investments under $300k. Rotorua properties have some great returns. I don't much about other areas but I know Orion has done very well investing in Hawkes Bay.
        What suburbs in Hamilton? Thanks

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        • #5
          Originally posted by Natalie19 View Post
          What suburbs in Hamilton? Thanks
          Why not do a search Natalie and have a look yourself.

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          • #6
            Originally posted by BigDreamer View Post
            Where are you located? Hamilton is doing very well and you might still be able to find some decent investments under $300k. Rotorua properties have some great returns. I don't much about other areas but I know Orion has done very well investing in Hawkes Bay.
            Thanks BD. I'll have a look.

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            • #7
              Originally posted by orion View Post
              Easier to get two cheaper ones around $150k each than one at $300k with over 8% yield.
              Thought as much!

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              • #8
                Originally posted by Natalie19 View Post
                What suburbs in Hamilton? Thanks
                With $300k the options are limited but you could still find some decent properties in Frankton suburb which is close to CBD and a nicer suburb compared to Bader or Nawton for this price range.

                All the best.
                www.PropertyMinder.co.nz
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                • #9
                  Personally I'd buy one place not two and save on rates, insurance, maintenance etc. Nicer places tend to rent better, vacancies are the killer in cheaper towns.
                  Last edited by Nick G; 14-12-2015, 01:28 AM.
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                  • #10
                    Seriously 370 views of this thread and about 7 replies. So, so many lurkers on this forum, as ever. It's so frustrating. Lurkers who have been reading, and benefitting from the experience on the forum, why not actually contribute something? No questions are too silly, or you may have a lot of knowledge and experience that would be useful to others. It just screams out on this forum, not much sharing coming in from investors (beyond the regulars), and very little in the way of newby queries. Just lots of invisibles on the sidelines.

                    Man up, you may even enjoy it.
                    Last edited by Eljay1; 14-12-2015, 01:42 AM.

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                    • #11
                      Originally posted by Nick G View Post
                      Personally I'd buy one place not two and save on rates, insurance, maintenance etc. Nicer places tend to rent better, vacancies are the killer in cheaper towns.
                      Thanks Nick.

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                      • #12
                        ....$300K "Land Banking" is the way...!!! Only rates @ LV to pay. No Insurance...Zero maintenance ..No pathetic tenants...No pathetic PM's...and safer then parking' it with the low-life bankers.... Lurkers are basically gutless in airing their views or PC brain washed..... Good Land Banking "Eljay1"

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                        • #13
                          Originally posted by Cpt707 View Post
                          ....$300K "Land Banking" is the way...!!! Only rates @ LV to pay. No Insurance...Zero maintenance ..No pathetic tenants...No pathetic PM's...and safer then parking' it with the low-life bankers.... Lurkers are basically gutless in airing their views or PC brain washed..... Good Land Banking "Eljay1"
                          From the original post, I understood it as the Eljay had finance approval for up to $300k rather than they had $300k in cash now.

                          If my understanding is correct, he will find it very hard to finance a purchase for a land only as banks have different rules for those.

                          Eljay, can you confirm if you have $300k in cash to spend or equity to use?
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                          • #14
                            Thanks "BigDreamer" for clarifying that point.....

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                            • #15
                              Hi,

                              Why do you need an 8% yield? (just been curious why you state this?)

                              What do you want from investing in property in general and what from this specific rental that you want to buy?
                              I would really think hard about the outcomes you want. Then work out what you need to achieve the outcomes. This should help you identify what kind of property you need, which should cut down some of your options.

                              I would think about;
                              - range of properties. ie if you have 4/5 high yield, low quality properties, then you might want one better, high capital gain property to balance your portfolio.
                              - are you in it for short term gain, or hold for the next 20 years
                              - true costs of lower end properties. ie a cost like a new hot water cylinder is still the same, but your rent is a lot less. So repairs and other costs are a higher % of the rent
                              - What passive income do you want?
                              - and by when?
                              - How risky are you?
                              - What hassles are you prepared to put up with? I've seen a lot of investors buy in Tokoroa, Rotorua and bad parts of Hamilton (bader and nawton), and put up with it for a year or two, then sell in a hurry because they have just had enough. They generally lose money as they have held for such a short period, plus had high vacancies and high repairs. Others manage these areas and tenants much better, but i would say the majority don't.

                              For example if you want to go from $0 passive income to $60,000 in 5 years, you would have to be quite aggressive, unless you had other great income. And a possible strategy would be to buy 6-10 high growth rentals, gamble that they jump in value, then sell a number to get the others debt free.
                              A less aggressive option would be to have strategy around buying and adding value. Realisically you might need this to be able to buy 6-10 quickly unless you have great other equity, or income.

                              Good luck

                              Ross
                              Book a free chat here
                              Ross Barnett - Property Accountant

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