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  • invercargill

    hi guys,

    is there anyone in here with a good understanding of what's going on in invercargill ? according to oneroof, the place I bought in december has dropped 3% over the last 2 months which is a little surprising considering the state of play. the other one I have in wanganui has done the opposite and has gone 3% up in the same space. fyi I'm a kiwi but not in nz currently so that's why I'm a little out of the loop..

  • #2
    I don't invest in the regions but looking at data you may have bought at the peak of the southland market ,you may get some growth this year for lack of supply but if prices are decreasing more stock will likely become available, after that it may be many years before you see any capital appreciation. .this advice is for most regional towns.

    This market frenzy will run out of steam in the regions, myself personally would prefer investing capital in Auckland or Christchurch city.

    I believe BNZ has joined ANZ in requiring 40% deposits from investors, this will be one of several reasons why.

    This is my personal opinion so please don't shoot the messenger.
    Last edited by Jeffa; 03-02-2021, 04:27 PM.

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    • #3
      yep understood, thanks for input. didnt want to invest in chch was always reluctant after the earthquakes. but hey I'm not planning on selling for 20 years so shouldn't get too wrapped up in the month to month numbers. cheers mate

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      • #4
        Also, it's too small a decrease to draw a conclusion from yet.

        What yield did the property achieve when you bought it? I bought in Whanganui recently for a 9.8% yield so wasn't too worried.

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        • #5
          I bought in wanganui in july 2020 for 286k. 6.9% yield as I work off 50 weeks. it's gone up 110k in that time though, so as a first time investor it's been a real eye opener. invercargill yield 5.9%.

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          • #6
            Actually that yield on mine in Whanganui is 9% - four incomes. 8.7% if I use 50 weeks. Will be 9.8 (52 weeks) when I put up the rents which I can't do for a few months. That one was bought last month. Also bought 7.4%, including a finders fee, in Napier in July - three incomes. I assume that has gone up in value. With each purchase I thought I was done in terms of ability to borrow. But yet again my broker is saying I can spend $1M. Umm, ok!

            38% in six months is awesome for yours in whanganui!

            They're out there. Just gotta keep looking huh. You can probably do better in Invercargill. But it might be worthwhile taking 6% if it's in great condition or something.

            I think using 52 weeks makes sense because when comparing them within your own portfolio or someone else's, you're both speaking the same language - annual rent divided by purchase price - and you're using the rent that it's actually worth. A vacancy isn't the property's fault.
            Last edited by wodger; 04-02-2021, 08:23 PM.

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            • #7
              I'm tapped our for lending so thatll be me done for a couple years probably. I'm not a big time investor, just a lil sprat with 2. but hey I am not complaining with my lot. probably come home in 2023, buy one for myself and then just get whatever extra I've got into the stockmarket if house prices have gone mental which they likely will have. I'm looking forward to coming home in a couple years let me tell you. nz is amazing but hard if you're renting

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              • #8
                Originally posted by sp275 View Post
                I'm tapped our for lending so thatll be me done for a couple years probably.
                I've said that after each purchase but the banks have kept saying yes, surprising me every time with more and more money.

                Good luck with it all.


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                • #9
                  thanks mate you too. hey you never know until you ask, right

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                  • #10
                    This is an interesting discussion! I was all set to start looking to invest in Invercargill, then I read somewhere that you shouldn't invest in towns of less than 100,000 people. What do you guys think about that?

                    Those are some amazing yields wodger. What kind of property is it with multiple income streams? Is it a house split into flats?

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                    • #11
                      NZ is a pretty small place. The list for towns above 100k ain't all that big. That logic rules out Wanganui, and I think that and Gisborne have had the best yields in the country in 2020. But hey there are smarter people here than me thatll probably give a different answer.

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                      • #12
                        Originally posted by wodger View Post
                        Actually that yield on mine in Whanganui is 9% - four incomes. 8.7% if I use 50 weeks. Will be 9.8 (52 weeks) when I put up the rents which I can't do for a few months. That one was bought last month. Also bought 7.4%, including a finders fee, in Napier in July - three incomes. I assume that has gone up in value. With each purchase I thought I was done in terms of ability to borrow. But yet again my broker is saying I can spend $1M. Umm, ok!

                        38% in six months is awesome for yours in whanganui!

                        They're out there. Just gotta keep looking huh. You can probably do better in Invercargill. But it might be worthwhile taking 6% if it's in great condition or something.

                        I think using 52 weeks makes sense because when comparing them within your own portfolio or someone else's, you're both speaking the same language - annual rent divided by purchase price - and you're using the rent that it's actually worth. A vacancy isn't the property's fault.
                        Invercargill is looking pretty pricy for old homes .. last time I looked high 300's would get you something decent you might get 300-350PW return on less all the costs you have with Property hardly enticing ...but thats why my next property will be commercial 8% net yield min..

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                        • #13
                          Originally posted by propertyfinder View Post
                          This is an interesting discussion! I was all set to start looking to invest in Invercargill, then I read somewhere that you shouldn't invest in towns of less than 100,000 people. What do you guys think about that?

                          Those are some amazing yields wodger. What kind of property is it with multiple income streams? Is it a house split into flats?
                          Makes no sense but hopefully keeps some hungry investors away from some great locations ...

                          Comment


                          • #14
                            Originally posted by propertyfinder View Post
                            This is an interesting discussion! I was all set to start looking to invest in Invercargill, then I read somewhere that you shouldn't invest in towns of less than 100,000 people. What do you guys think about that?

                            Those are some amazing yields wodger. What kind of property is it with multiple income streams? Is it a house split into flats?
                            In Napier it's a 3br house with two 2br units on the back.

                            In Whanganui it's an ex state-house building comprising four x 3br units in the rough part of town. I paid a lot for it given its location and compared to what I could have paid a few years ago, but it was a mess back then I think. It has been improved inside and is in reasonable condition. It needs an exterior paint, which won't be a trivial job, that's its only flaw really. Not a perfect location but the numbers work, that's the main thing. I could drop the rent quite a bit and still be cashflow positive, but I can't see a 3br dwelling being worth less than $350pw pretty much anywhere.

                            I think Invercargill is nicer than a lot of people give it credit for. Diversity of employment is a factor in my mind in considering smaller towns. So if the main employer closed, will the town be f-----? In Invercargill's case if Tiwai closed I think it'd be ok in the long run. I've convinced myself, you have to convince yourself?

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                            • #15
                              Originally posted by JBM View Post

                              Invercargill is looking pretty pricy for old homes .. last time I looked high 300's would get you something decent you might get 300-350PW return on less all the costs you have with Property hardly enticing ...but thats why my next property will be commercial 8% net yield min..
                              yes invercargill has shot up like everywhere else recently. Invercargill has quite a lot of projects happening at the moment and with tiwai closing being extended by a few more years I think the local council realise they need to pull finger and have a plan B for the site. they nearly got caught with their pants down in the last round of site closing negotiations. as for rent, a 3bdr will get 380 a week minimum down there, most likely 400.

                              as wodger says, convincing yourself is pretty important

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