Over priced? 1 Bedroom Eden Terrace

[samuri]

I may invest , sight unseen in some 1 bedroom apartments ,
47 sq m to 55 sq m in Charlotte street
$NZ 207000 to $214000.


I an not in NZ
eg Apartment
53 sq m, Gross rent $NZ 15600 car Park
Net yield 5.9% ie less water insurance rates / body corp / management fee
Built 1999
Building depreciaton $145000
Equipment Depreciation $57552

Does this seem good/bad /average at face value?
Is it worth persuing or are there better places for the price?
There is an 11 year lease with NZHC with yearly rental reviews.

I have not supplied enough information for an exact anwer but maybe you could add some input.???
Thanks

[tamara]

Hi Samuri

Welcome to Propertytalk.

If you do a search about apartments you will find some threads that discuss at length a variety of apartment related topics.

I guess that no one can tell you what makes a good purchase as it will be relative to the investment goals you have.

My feeling is that this is a very small appartment. I am not sure who will want to rent this property when your HNZC contract runs out.

Regards
Tamara

[CJ]

For central auckland city, 50sqm is actually a normal size for a one bedroom although eden terrace is fringe auckland city(I assume I have the right area) which means you would expected a larger place. it is possible to get a 38sqm 2 bed so I think the size is ok - I have personally lived in 3 different one bedders ranging from 40- 56 sqm and it is perfectly liveable for a couple.

You have also not mentioned a car park which means that the rent is probably fully priced ($300 pw for a fince CBD apartment - though you can look at rental stats yourself) so I wouldn't think there is much room for an increase in teh coming few years at least.

Looking at the depreciation figures, I am also guessing the apartment is lease hold (either that or you somehow got a valuation with little or no land value). This will effect cashflows (and profitabilty) depending on the size of the lease payment.

Given that it is housing NZ, I also assume it isn't a luxury apartment (though it would need to be of average quality for them to take out the lease).

Based on the above, it does appear to be a bit over priced but may fit into your portfolio depending on what else you have (no vacancies for the next 11 years has to be a good thing). This is a no hassle investment.

Does it work out cashflow positive because if you live overseas, tax losses become irrelevant to you.

[samuri]

There is a car park.
I was curious to see if the small size would affect resale value.
It seems very over priced but evrything is relative..........wish I had relatives in Auckland!
It is cash flow positive for me ,but should I be trying harder to find something better, in a country I know very little. Probably impossible to get the best deal possible, but I would llike to get at least a good deal
Thats the real isssue .

Still not sure about the size , but Tamara and fanatical poster thanks

[RentMaster]

I think you really need to find out what the body corp fees are going to be. Like what they were last year. The RE agent should be able to tell you this. For some places, the cost of body corporate fees is quite high, and can have a large impact on your cashflow and profitability.

[samuri]

body corp $855
Is that High for New zealand

[masteraccountants]

Hi,

If you are looking for other options you might try the www.hotpropertyinvestments.co.nz website and specifically the property featured in this link http://www.hotpropertyinvestments.co...3&subcat=3.

The featured property offers a rather high rental yield, and that may suit you being an overseas investor.

Happy investing!

[RentMaster]

body corp $855
Is that High for New zealand

No $855 is not high at all. It is quite reasonable.

While on the topic of body corporate fees, I found out something recently. When developers sell their properties they put a very low body corporate fee on them to make the purchase appear better, but that is only short term because the sinking fund does not grow very fast. And then the building needs painting, and there is not enough in the fund to pay for it, and the unit owners have to pay a lot more in that year to cover it.

So what body corporate administrators do, is they accept the very low fees in the early years to keep the developers happy and to win the business, and then slowly increase it over the following years until it gets up to the level it should have been in the beginning anyway.

[samuri]

Thanks Andrew,
Can you guesstimate an average percentage thAT BODY CORP MIGHT eat up for a 1 bedroom and 2 beroom apartment in Auckland.
Broad question....broad answer ok

[RentMaster]

I personally only know the value of 2 body corporate fees, and they are both about 900-1000 per year. However I believe some can be a lot higher than that. I suppose places with their own gym or swimming pool and other facilities would require a much larger fee. Maybe some other forum-ites could tell us how much they are being charged.