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Cashflow Properties In Northland

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  • Cashflow Properties In Northland

    Hi there, I am the original poster of this discussion back in 2016 and stumbled on this post when trawling.

    We still have those properties that we purchased for our cashflow strategy,

    1) Purchase price 108K, rented for $220pw- value now circa 320K
    2) Purchase Price 100K, rented for $260pw- value now circa 295K
    3) Purchase price 107.5K, rented for $250pw- value now circa 335K
    4) Purchase price 110K, rented for $250pw- value now circa 315K
    5) Purchase price 97.5K, rented for $240pw- value now circa 340K
    6) Purchase Price 95K, rented for $230pw- value now circa 290K

    Each property rents for between $400 and $450 per week now. Obviously rates/ insurance/ compliance costs have also increased markedly in that time.

    Note- we do have some nicer properties in different parts of the country.

    For the above properties, I would say that they have performed ok, but costs on cheaper properties are still similar compared to more expensive properties, and tenants can be more marginal in many instances which can cost more time/ money. Over the next 5 years we plan to possibly sell a couple of these and perhaps reinvest in a nicer area. They still perform a function for us but we definitely earn our money. Labour did force rents up markedly over the last 6 years I would say!

    Last edited by donna; 05-11-2023, 10:05 AM. Reason: created a new discussion

  • #2
    Cashflow positive from day 1 potentially, although you may have had tenancy problems and costs in lower market areas.
    And you have the capital gain.
    Yes with massive increases in rates and insurance, non deduct interest issue, compliance and maintenance costs, rents have had to go up.

    One example in Blenheim I have is a block of 4 units I bought 1 year ago for 1.13m.
    Rents were about $370 per week but market rent when I bought them was $430 so I made the increase of about 15% immediately.
    Some tenants have moved so we had to renovate and re-look at rents.

    Research showed only 12 rentals in the whole region of Blenheim.
    Property manager said $20 bucks a week increase, so I asked her how the rental market was, and she said last week she had 50 applications for a rental and 30 of them were excellent.

    I said, lets try $550 per week then - RENTED IN A WEEK.

    Thats 38% rent increase in 13 months.

    Thank you Jacinda and labour, all down to them.
    Their crazy spending and covid and other red tape hindered supply of all goods and services, so low supply and high demand, created rampant inflation.
    Then all the ridiculous costs and restrictions placed on landlords, also reduced supply of rentals, and now there is a massive shortage in many reasons.

    Rents have to go up by these crazy amounts because:
    A. Landlord costs got out of control
    B. Market situation.

    75% Labour Govt created.

    I wouldnt have even looked at market rents, if I hadnt of been hammered by Labour.

    I am talking chch, invercargill, auckland.


    • #3
      Even so is 38% rise in rent enough? It won't cover - the double interest rate worth thousands per month for any new investors coming off low-interest loans for example.

      And still we wait to hear anything from the new Government!
      Yep, I am one of the mortgagees coming off a fixed rate next year, and the best deal I will get will be almost double my current interest rate! There are a huge amount of mortgages coming off fixed rates next year - RBNZ data says 54% of all mortgages - are facing $$ thousands more per month in interest repayments. How are
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