Your thoughts on investing in Dunedin for an investing noob?

[StartingOutInDunedin]

I'm 44 years old, and never going to save a big retirement fund with my salary, but have a good amount of equity in my home. So, time to invest in property, and build up some assets that others are paying for.

I'd like to invest locally (Dunedin) so that I can manage the property(ies) myself and keep expenses down. I've only lived here 6 years, and am most familiar with the Maori Hill-Helensburgh area. However, I've been noticing a bit of chatter about Carlton Hill and Liberton lately..

I'm thinking I'd like to keep away from university students at this stage - they seem like hard work! And I'd like something that pays for itself - which I estimate to be at least 8% at the moment. Currently I'm looking for a 2-3 brm house or unit in the City-Mornington-Wakari area, suitable for professionals and/or couples.

I'd appreciate any advice or opinions from experienced investors in Dunedin.

[nicsa122]

There was a good thread on this recently have a look for it... What's the goss on Calton hill?

[StartingOutInDunedin]

Can't remember where I saw it - been reading too many commentaries lately to keep track - but the Nidd Realty woman said that, in her opinion, Carlton Hill and Liberton were the areas of best value/return, at the moment.

[jimO]

Can't remember where I saw it - been reading too many commentaries lately to keep track - but the Nidd Realty woman said that, in her opinion, Carlton Hill and Liberton were the areas of best value/return, at the moment.

she have some for sale there ?

[StartingOutInDunedin]

... no doubt..

[Nick G]

This thread had some thoughts on Dunedin.

http://www.propertytalk.com/forum/showthread.php?39428-Dunedin-property-investment-Student-flat-or-outside-the-city&p=387858#post387858

If this is your first time a couple of pointers.

1. Allow a 5% maintenance fund and 2 weeks vacancy in your figures. You won't need all of the maintenance cash but that builds up and will pay for a new bathroom 10 years later (for example)

2. Look at it as an investment (by the numbers). If you want a freehold investment because it paid for itself over 25 years then that's your benchmark.

3. Look at several properties and get an idea of what is out there, what types of properties attract what types of tenants etc.

4. Speak with a property accountant and sort your structure. You don't need much for a 1-2 property investment portfolio, a simple LTC for example. It really depends on your other goals.

5. Lots of good info on here. http://www.propertytalk.com/forum/sh...719#post386719 & http://www.propertytalk.com/forum/sh...705#post383705

6. Work out your end goal and plot backwards to come up with what you should do today. Take your time and don't be afraid to pay for help during your DD like legal and building advice. It's just as easy to go backwards as forwards.

Cheers

[StartingOutInDunedin]

Brilliant. Thank you. Yes, I've been reading Graeme Fowler's articles - he makes a lot of sense to me. Being strict with oneself and doing it by the numbers seems key.

[snobilo]

Nicks number 4. point is very important, my accountant's structure is saving me about $300 a week (she is my mum also so its free ). Plus the knowledge around how tax works and can effect you is crucial, Rosco is quite active on this forum and explains it well from what I've seen.

[StartingOutInDunedin]

Thanks snobilo, I'll add you both to my list of 'good reads'

[PTILoveYou]

Focus on cashflow cashflow cashflow.

Don't have any expectations of capital gains.

That's the advice I was given by Dunedin but now Auckland investors.

[nicsa122]

Gary that doesn't sound like you? I thought you were all about investing for capital gains?

[PTILoveYou]

Gary that doesn't sound like you? I thought you were all about investing for capital gains?

In Auckland I invest for capital gains (with enough cashflow to service the bank, expand portfolio/keep buying, and not go bankrupt).

In non-Auckland towns/villages, I would go textbook (no money down + positive cashflow), because you never know if capital gains comes or not.

[StartingOutInDunedin]

Yes, Dunedin seems slow on the capital gains front. Doesn't seem to be many cashflow positive opportunities either, in my price bracket of up to $250k anyway. Patience.

[jimO]

Yes, Dunedin seems slow on the capital gains front. Doesn't seem to be many cashflow positive opportunities either, in my price bracket of up to $250k anyway. Patience.

how would a price of 200k with a return of $300 a week be, newly painted inside and outside, new carpet, newish kitchen, newish bathroom, 3 bedroom, garage, in st kilda with a flat easy care section older house but thats what u get for 200k

[Nick G]

I'll PM you we can help in Dunedin.