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  • Regional Investment - next step?

    I'll soon be ready to take my next step in building my portfolio. I'm priced out of the 'biggies' so am looking to the regions.
    So far I'm considering:
    Southland - Gore/Invercargill/Mataura - popular due to no SIT fees
    Palmy - steady market/upward movement
    Wanganui - rental shortages
    Rotorua - already have a property here that I can relocate another full-sized house onto. Harder to get finance, though.
    Kawerau - have heard things about becoming popular again

    Which of the above, in your opinion, would be my best bet? Or is there an excellent alternative that I've missed.

    Looking to buy and hold and aim is cashflow. Capital gains would be nice, but not my motivator.
    My blog. From personal experience.
    http://statehousinginnz.wordpress.com/

  • #2
    I'm no expert on the Southland market but Invercargill would be my bet if aiming to invest in Southland- a larger centre, less likely to rely on one industry (e.e. dairying) than smaller service centres such as Gore or Mataura. Prior to the "free fees" scheme you couldn't give property away down there, well almost.

    Craig

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    • #3
      Of those Palmy or Rotorua. Wanganui population declining, Kawerau, Seriously?, Southland, seriously? :-)

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      • #4
        Originally posted by Bobsyouruncle View Post
        Kawerau, Seriously?, Southland, seriously? :-)
        Until recently, I would have agreed with you. But I've heard whispers of change in the air. Hence putting it out there.
        My blog. From personal experience.
        http://statehousinginnz.wordpress.com/

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        • #5
          Unless there is toxic waste being put into the water supplies in every other town I just don't believe it :-).

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          • #6
            Rotorua, Palmy. I would also think about Napier. I am actually doing a free presentation in Penrose on Thursday, about Napier if anyone is interested. http://www.mortgagesonline.co.nz/buy...-presentation/
            Hamish Patel | ph: 09 625 4693 | mob: 021 625 693
            My Website
            Be informed - register for our free monthly newsletter

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            • #7
              Rotorua has taken a big step up. Values well up 21% this year, rents well up and lots going on.

              Knee deep in good tenants': Rotorua's 'horrifying' rental market gets worse



              Simon Anderson, chief executive of Realty Services, which operates Eves and Bayleys, said out of town renters looking for high quality homes were contributing to the rent increase.
              "A year ago it was very hard to rent a $500 a week property but now those are in high demand from out of towners wanting to move to Rotorua for work who are willing to pay a bit more.

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              • #8
                What have you tried with regards to getting finance for a relocation project?
                Free online Property Investment Course from iFindProperty, a residential investment property agency.

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                • #9
                  Originally posted by Viking View Post
                  Rotorua has taken a big step up. Values well up 21% this year, rents well up and lots going on.

                  Knee deep in good tenants': Rotorua's 'horrifying' rental market gets worse


                  Article is just ordinary herald rubbish... I've got 3 beddie which I can't find tenants for. All I get is "single mothers of 5 with couple of dogs and $1000 in defaults" type of trash.

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                  • #10
                    That doesn't sound right AlFa, we have turnover but our Ngongotaha flats find reasonable tenants, our vacancy currently is basically zero. Maybe you need a new PM? Or are you in a real rough part?

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                    • #11
                      Originally posted by Bobsyouruncle View Post
                      That doesn't sound right AlFa, we have turnover but our Ngongotaha flats find reasonable tenants, our vacancy currently is basically zero. Maybe you need a new PM? Or are you in a real rough part?
                      I doesn't indeed. Good street in Western Heights, good reno'd house but just crap applicants. Do letting myself but had a chat with agent from LJH (ex PamJones) and they seem to agree now is a tough time to find anyone decent. They're in a same boat - got several dozen beneficiaries no one wants

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                      • #12
                        Originally posted by Nick G View Post
                        What have you tried with regards to getting finance for a relocation project?
                        To be honest, not a lot, as I was told by Jeff that banks wouldn't lend on them until they were down and CoC'ed, so you have to be able to self-fund, at least until that stage. As I thought that was going to be at least a year away, I didn't look into it too hard.

                        However, a change in circumstances means that I'm a lot closer than I thought and perhaps I might be able to swing the rest through a T2 lender.
                        My blog. From personal experience.
                        http://statehousinginnz.wordpress.com/

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                        • #13
                          I'll PM you.
                          Free online Property Investment Course from iFindProperty, a residential investment property agency.

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                          • #14
                            If you are looking for cashflow, then I would start with the relocation project. Initially check the numbers. What will the rent be, less all the expenses including fair repairs?

                            As for other regions, you are looking for cashflow. So start by checking information that is key for tenants
                            - population growth or decline
                            - average wage
                            - % unemployed
                            - What employment opportunities are there, and beware of one industry
                            - Talk to property managers about tenant demand

                            i always prefer larger areas, as this protects your investment to a degree. Ie more people to buy if you have to sell, or more people to rent too.

                            Be careful of costs where the rent is less. Ie to buy a new stove will still cost the same whether in Hamilton or Southland, but your rent might only be half!

                            Ross
                            Book a free chat here
                            Ross Barnett - Property Accountant

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                            • #15
                              I've been watching Inver market for a while and decided not to touch it, as it's not growing. You don't invest anywhere where the population is dropping for sure, and Inver is not a main tourism destination either.

                              My friend invested well in Palmy, very steady market, slower then the rest of the country but very stable with good tenant, good cash flow.Houses are of good standard.

                              Rotorua is risky.......why didn't anybody consider Taupo? The township is still cheap whist Taupo is a lot tidier than Roto. And Tauranga actually cooled down recently and in long term it will still grow faster than other places plus very good income people live there bringing good tenants so can still buy if you can afford. Napier is good, a place with good living quality so will attract good people with income/money so you'll get CG, I don't know about the tenants though but generally speaking cities surrounded by plantations won't have big issues in this respect. There are too many lovely places in the north island why look at south, too far to manage, and I would only consider touristic places in the south, but they are all expensive. Basically the southern part of north island is mostly good if you don't go too remote. I used to think Turangi was terribly far but now.......

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