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  1. #11
    Join Date
    Jun 2007
    Location
    Wellington
    Posts
    1,237

    Default

    Auckland is not my market, but even in Wellington (where apartments have had fewer issues) I generally advise people to look at high yielding home and incomes properties in the outer CDB fringe suburbs. Yields are the same, risks are lower, and capital gains are higher.

    If I operated in Auckland I would only touch apartments at comedy level discounts of market value, and even then I'd probably run away because of the leaky building risk.

    Q. If a building has started to leak, but no-one has noticed yet, what possible Due Dilligence can you do to protect yourself? Or what if the cladding is defective, but hasn't let go yet.... and begins to leak next year?


  2. #12

    Default

    Hey Everyone I have decided Apartments are just not worth the land they are built on haha, good returns but you cant protect yourself from the leaks that eventually happen, 5-10 years down the track. So I have decided to stick to houses more expensive but if the tin roof leaks its on a tin roof leaking. If that makes sense. But I am looking at the below what do you guys think?


    Home and Incomes....... I have noticed a huge increase in H+I's for sale, I am currently looking at this one for sale, 2 houses one site one title , RV 625K and vendors wanting silly price way above RV rental of $790 per week. Can I ask what do you guys think the sale price should be? Agent (yay gotta love them right?) has said they will only look at offers above RV. This is my first major rental investment so I am a bit confused about which price would be the best to put down on the property?

  3. #13
    Join Date
    Jan 2006
    Location
    Wellington
    Posts
    559

    Default

    Joe90 - A standard for property investors over the years has been blocks of flats. Between 3-10 in a block and most often are purchased individually. Many of these are more than 20 years old so no leaky homes issues. Often maintenance issues and fixing up to do. But in most cases you get what you see. Not these issues that you cant see. Yields are reasonable generally, always over 6% often a lot better.
    Doug

  4. #14
    Join Date
    Sep 2007
    Location
    Christchurch
    Posts
    1,259

    Default

    Multiply the $790 rental by 50, subtract rates, insurance, management fees unless you'll DIY, at least $4000 for maintenance, and any other costs you can think of.

    That gives you annual before tax income.

    You want that to be more than the interest cost of a 100% mortgage. How much more depends how much you want to gamble on interest rates staying low.

    From that, calculate your offer price.

    They may laugh at you - if so, you can just walk away and see if they negotiate later.

  5. #15
    Join Date
    Jun 2007
    Location
    Wellington
    Posts
    1,237

    Default

    Can't comment on other markets, but in Wellington you should look for a gross rental yield of:
    7% if its a quality dwelling (ie the "home" might appeal to an owner occupier one day when you sell it)
    8% if its more like 2 flats
    9% if its got flaws that are hard to change (like no sun, bad access, no parking etc)
    10% + if its a block of flats - as these tend to be in high tenant "management overhead" suburbs.


  6. #16

    Default

    hi thanks for the info Joe90.i am a leaky apartment hunter, i have my trick and tools, so not for the faint heart to follow my steps,but if anyone knows of more leaky building please share thanks

  7. #17
    Join Date
    Sep 2008
    Posts
    7,562

    Default

    are you still refusing to pay for the repairs in the ones you've bought?
    have you defeated them?
    your demons

  8. #18

    Default

    morning eri, not i was never refusing to pay, i am paying at my own terms to stretch my cash flow to the upper limits,without needing to see the greedy banks and bankers.

    And yes the body corp,cant expect to everyone will pay on time,and a bit of leeway needs to be on the agenda, will everyone knew how to use common sense.

  9. #19
    Join Date
    Jun 2004
    Posts
    10,365

    Default

    Quote Originally Posted by Propertytrader View Post
    And yes the body corp,cant expect to everyone will pay on time,and a bit of leeway needs to be on the agenda, will everyone knew how to use common sense.
    They can really.
    How did you get on with the last one?

  10. #20

    Default

    Hi WAYNE,i paid some towards that special levy and negotiated to pay on installments as remedial work has not started yet, and the scaffolding company or is a white lie by the body corp, as they say work wont commence if the money is not in the body corp trust.

    I bet there are plenty of scaffolding companies willing to accept installment payments to get the contract,but there may be a financial interest between the body corp,to use that particular company.

    cant trust anyone these days, as everyone only see dollars signs,before they offer to help.


 

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