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Levin a good option?

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  • Levin a good option?

    I am currently looking at Levin as an option for a rental. I was wondering whether anyone has rental properties there and what the market is like? I think it could be a good option in the future especially since the new upgrades to the roads will result in a reduce commute to Wellington.

  • #2
    Hi Hamz1207,

    What is your long term goal with the rental? ie what do you want it to achieve?
    Does Levin help you achieve this?

    First thing I always look at is population - http://population.city/new-zealand/levin/ If the town is declining in population, this generally means less need for housing, so less tenants, less rent and maybe less value. So I would be very careful touching a declining area. Levin is slightly increasing.

    Second I would look at overal town. Is it relient on one industry or employer? Is it aging? Is it likely to have good tenants? Does it have jobs, infrastructure, industry, shops, hospitals, schools etc to keep good tenants living there? I prefer to stick to cities as they have all these things, and large number of possible tenants or future buyers.

    Third - depends if you are after cashflow or gain in value;.
    Cashflow - What is the expected rent as a gross yield? Most likely will need to be over 8% to break even, as repairs and other costs are the same even though cost of property is low.
    If reasonable gross yield, then I would work out full cashflow to make sure it pays for itself
    My approach in small town, I would work on under 50 weeks vacancy, and want the rent to pay down Principal too with 100% debt.

    Gain in value - Do you really want to gamble on small towns with less buyers? Do you home work well and make sure buying well under value.

    Ross
    Book a free chat here
    Ross Barnett - Property Accountant

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    • #3
      How long will the commute to Wellington be after transmission gully? Looks like it's about an hour away right now. It might start to grow in a few years if Wellington prices continue to boom but I don't think we're there yet. Interesting to see investors considering it though
      Your Home Loan - Wellington Mortgage Broker
      [email protected]

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      • #4
        Why Levin over Porirua, Hutt Valley and Wainui?
        Free online Property Investment Course from iFindProperty, a residential investment property agency.

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        • #5
          What Nick said! Get closer to Wellywood.

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          • #6
            Hi Hamz

            From what I've heard from investors in Levin its very hard to get qualified tenants that will pay the rent and keep the property well maintained and looked after.

            However I don't have enough intimate knowledge on the area personally but the views are expressed from every investor I speak to.

            Hope that helps
            Fraser Wilkinson
            www.managemyrental.co.nz
            Wellington / Lower Hutt / Upper Hutt / Porirua

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            • #7
              Hope that helps......

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              • #8
                33% growth rate in property prices in Horowhenua Dist. including Levin compared from last 5 yrs. numbers
                One of the highest growth rate of capital gains compared to other regions

                Seems like many missed the boat.

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                • #9
                  Yeah I agree. The greater Wellington road projects will further assist Levin in time. Making it a possible commuters destination, which will bring more money and people to Levin. Levin will start to grow and become a more attractive place to live.

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                  • #10
                    I think it's a good option if you can still find the yields. Prices have gone crazy over the last few years, like everywhere. I have 2 x 2br units there, in a rough street. Rent is up 15% since I bought them two years ago. Road improvements will positively impact the town. There are people commute to Wellington for work and work from home in Levin.

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                    • #11
                      ^^ Yes more moving there to 'rent' as they've been priced out of rentals (+ lack of rentals) in Kapiti.

                      I know a couple in retirement who sold their house down south - thinking they could get into the market in Wellington. Now even buying in Levin is looking unlikely - and they'll rent there instead.

                      Not exactly the perfect retirement but this is what can happen when you sell somewhere and don't know house prices in another area.

                      cheers,

                      Donna
                      Last edited by donna; 29-06-2021, 05:12 PM.
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