Area information

[Dee]

Hi all

Id like some tips from some "seasoned" property investors on what areas they buy in... I have heard many say that they buy on the numbers only and that it doesnt matter what area. However when Im researching an area and I have a house in mind I find it hard to ignore the property managers telling me to "stay away from that street " Or are they just trying to make there job easier, do you just buy on the numbers and then select the tenants very very carefully and take out landlord insurance??Any advice and tips on researching areas will be most welcome

Thanks

[Propoholic]

Hi Dee

This topic has been discussed at length before on the forum, try doing a search to locate some valuable debate.

However, for an excellent discussion paper on property investment issues 'click' on Resources/Inspirational contributions from our community/categories-Whittaker Hamilton 'Property Investment Tips'.

Whittakers article touches on some of the location considerations.

[humvee]

What city/suburb are you thinking about?

What city/suburb are you thinking about?

[Dee]

Thanks propoholic I will have a look

Humvee - Im looking at Kaikohe (far north) and Whanganui and Levin ( amongest others)

[JohnL]

At a simplistic level, in the bad streets, there can be greater hassles which lead to costs ie damage, problems with rent payments etc. Also, most tenants don't want to rent in those areas so when there is a surplus of rental stock, guess which ones stay empty for longer - bad areas and un-maintained houses.

Having said that, there are investors who are successful working in those areas, but its a speciality and takes commitment.

John

[Dean@Massiveaction]

Hi Dee. If you are not experienced in investing I would strongly recommend you stick to main centres only at the moment. Coming into teh slump small towns can be seriously affected. As John says smaller and bad areas a re a niche market for some investors but you can get into trouble in this phase of the cycle. So I would advise you to look anywhere in Auckland. Including fringes like Warkworth and Wellsford. In the South Huntly and Ngaruawahia are safe fringe areas, or anywhere in Hamilton. Forget Kaikohe and the small far north places. Far too easy to lose money in my opinion.

[Dee]

Thank you JohnL - that was what I was concerned about!

Poomba yes expescially coming into this phase of the cycle...would I be right in saying to be very careful with development right now also..... (especially for the newbie) thanks for all the helpful advice!

[Dean@Massiveaction]

Development is always risky. One in 3 developers go bust, in a slump even more risky.

[leapy]

I would dispute the dictum to stick to main centres IF you are prepared to do your homework properly in the regionals.
You also need a clear idea of your buying parameters and goals - and confidence they are achievable in the location you are looking at.
The time has probably passed when you can stick a saddle on any old investment property horse, whack its butt and watch it charge around the capital gain racetrack.

[drelly]

Have to agree with Dean on Kaikohe. If you'd bought a few years ago, you'd have done well but prices have climbed considerably on the back of the new prison development and you may find it hard to make money in such a small market that has already been picked over by other investors.

[Aston]

Hi all

do you just buy on the numbers and then select the tenants very very carefully and take out landlord insurance??

Thanks

I'm no expert on insurance but landlord insurance isn't going to protect you from loss of rent through general vacancy, deliberate damage by tenants or any bad investment decisions a landlord may make.

[kolzee]

If you'd bought a few years ago, you'd have done well but prices have climbed considerably on the back of the new prison development......

Wouldn't this reduce the rental demand??!!!! (Just joking)

[kolzee]

Seriously though Dee, if you're willing to look long-term then you should keep an eye on roading, commercial and transport developments......these are what are likely to have the greatest effect on your property's area.

[janesco]

Im looking at Kaikohe (far north) and Whanganui and Levin ( amongest others)

Well first things first. There is no such City as Whanganui. The name of the city has been a much debated issue that was voted on recently in a referendum. The problem stems from the fact the local Iwi wanted the name of the river and the district changed to reflect the "correct" spelling. I find this amazing as the Maori didn't have a written language in the good old days so how can it be spelt wrong? Beats me.

Any way assuming you do in fact mean Wanganui let's move on.

There are definitely areas within wanganui that I would not touch with a barge pole.

Suburbs like Castlecliff or Aramoho are remote from the city centre so people don't like to rent out there.

Key streets like Talbot St or Kea place should be left strictly alone. You won't get a good return because the people who would live there won't pay the rent. What they will do is help you redecorate the place. They will do the hard stuff like bashing in the walls, removing panes of glass, demolishing fences that sort of thing.

These tenants are best left to people who are predesposed to manage them. People like Glenn would thrive here. Most property investors would be eaten alive.

I own several properties in Wanganui. I very strongly advise anyone to get in contact with "The Rent Centre". No I'm not a share holder. These people will help you with setting criteria for purchasing properties.

I regularly pop in and I always pick up the list of currently available rentals. Although they are one of, if not the biggest rental outlet in town they are always looking for good quality places. This does not mean expensive.

They have managed my properties for the last three or four years and have done an excellent job. Like all PM's you should keep a watching brief just to make sure the rents are being increased on a regular basis. Other than that I have had no problems at all.

Anyway that's my tuppence worth.

[Emblaze Pete]

erm Janesco, whilst i agree with your sentiment in respect to the spelling of Wanganui. It may pay to change your signature/ Link " Whanganui property Investors association" to reflect this.