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  1. #1

    Default Please comment on my situation.

    Hey everyone...

    I've been browsing the forums for a couple of months now and have soaked up some very good information, by far the best property forum Ive seen dedicated to NZ...

    I'll give you a quick run-down on my situation and feel free to comment.

    So now to my situation.
    I'm nearly 24 and in April 2010 I purchased an old 120m2 villa in Whangarei (where I live). I would call it 3 and 1/2 bedrooms (one bedroom is small and could fit a single bed and a couple chests of drawers, so good for a small child), one of the bedrooms is upstairs, like a loft but is pretty big for a loft and two double bedrooms, master has a walk-in wardrobe. It has a sunroom, lovely bathroom, modest kitchen. Double garage (with single access only) and 1300m2 of land. It is on a hill though so not flat. I purchased for 252,000. I have managed to pay off 34k since I bought it and have been paying off as much as possible, maybe to it's detriment as it needs to have a retaining wall at the back section re-fenced (part fell over) and some bora in the roof taken care of.

    I was thinking about waiting until winter to maybe get cheaper quotes (low-season) for the work, or should I just get it out of the way?

    I am always away with work as I am a long-haul flight attendant. So my rental situation is this...

    I live in the loft and have most of my stuff packed into the small bedroom. Part of the deal is the tenants (A couple and her son) needed a lot of the garage for their stuff, which was fine because what I have in there still fits in. They rent the two double bedrooms. They pay 230 per week and the agreement was I pay 1/4 power bill. The woman and her son have moved back to their mothers for the mean time as her father passed away, it's been a couple of months now. The only thing it's changed is I've agreed to go halves with the guy on power as they're not around that much to use it.

    They really are awesome tenants, the guy mows the lawns most of the time! I give him money for petrol and pay the odd power-bill myself sometimes out of appreciation. They're tidy and look after the place, especially since I'm not around a lot.

    Overall I think it's a pretty good set-up, and though I might be able to make slightly more out of rent, quality tenants are hard to find. Oh, and the rent is paid on-time

    I've also thought about buying an IP while rates are good but I'm wondering whether I should still pay off more debt. I guess I will pay off a bit more while keeping an eye out for good deals on property finder sites... when I know Im ready I will approach some agents so I can try get in on propertys before the go 'on the market'.

  2. #2
    Join Date
    Sep 2007
    Location
    Christchurch
    Posts
    1,258

    Default

    I'd do the retaining wall in summer while it's dry. Waterlogged ground could make the job a pain.

    For the rest ... it sounds incredibly convenient - well done. But if they stay for years, you'll need to put the rent up eventually. Could pay to check you aren't falling too far behind market rates.

  3. #3
    Join Date
    Jan 2004
    Location
    Whangarei
    Posts
    5,867

    Default

    I'm in Whangarei. Is anyone doing property finding here now?

    With the size of your section, I would seriously look at moving another house on it. You can pick up some really cheap moveable homes at the moment and the returns would be far better than buying another house through an agent.

  4. #4
    Join Date
    Apr 2011
    Location
    Auckland & Whangarei Office
    Posts
    21

    Default

    Hi there,
    We are active property finders in Whangarei/ Auckland and have picked up some excellent properties recently through networks. There are plenty of Auckland investors taking advantage of good rates and favorable purchasing conditions to make their next acquisitions outside of Auckland.
    Networks that access the best buys are built up over time and after lots of purchases! Agents will approach folk who purchase multiple properties cleanly, quickly and have finance assured with the best buys. Our level is about 12 per year in Whangarei alone.
    We also provide property management in Whangarei and Auckland and it sounds as if you have a great tenant well done one thing to keep in mind though is if you leave the country for longer than 21 days you are required to appoint a 'manager', let the bond office know amongst other things. There are fines in place if you don't do this and something happens with the tenancy. Check the Department of building and housing for details.

    Kind regards and good luck.

  5. #5

    Default

    Quote Originally Posted by drelly View Post
    I'm in Whangarei. Is anyone doing property finding here now?

    With the size of your section, I would seriously look at moving another house on it. You can pick up some really cheap moveable homes at the moment and the returns would be far better than buying another house through an agent.
    I live on Anzac Road, as you know it's on a hill... My property basically has the front lawn which is higher than the where the house is situated... then the back yard is divided into two 'tiers'... I think that there would be extensive work required to get another house onto the place... Maybe if I took out the garage and built a garage on the front lawn, then started the house on the site of my old garage. Still, a lot of earthworks, time and money.

    If it was a flat section it'd already be in the pipeline.

    You also couldn't move a moveable house onto the property without knocking the garage out of the way.

    This is my home. Though I knew to buy with my head, the place just felt right and I bought it with my heart. I still feel like I got a decent deal (not exceptional but I am satisfied). I like the section, the gardens.. and I want my kids to have space to play one day, so I will probably leave as is and start my investment/profit maximisation landlording on my next property which will be purely about business.

    Besides, a bit of land could come in handy if the world comes crashing down and I need to plant my own vegetables etc.

  6. #6

    Default

    Quote Originally Posted by Guardian Property View Post
    Hi there,
    We are active property finders in Whangarei/ Auckland and have picked up some excellent properties recently through networks. There are plenty of Auckland investors taking advantage of good rates and favorable purchasing conditions to make their next acquisitions outside of Auckland.
    Networks that access the best buys are built up over time and after lots of purchases! Agents will approach folk who purchase multiple properties cleanly, quickly and have finance assured with the best buys. Our level is about 12 per year in Whangarei alone.
    We also provide property management in Whangarei and Auckland and it sounds as if you have a great tenant well done one thing to keep in mind though is if you leave the country for longer than 21 days you are required to appoint a 'manager', let the bond office know amongst other things. There are fines in place if you don't do this and something happens with the tenancy. Check the Department of building and housing for details.

    Kind regards and good luck.
    Thanks very much for the tip! Dies this 21-day thing still apply if technically, they are flatmates and not people who are renting the house?

    I've just been to the guy who set up my mortgage (who I have a good relationship with and he continues to give me a lot of good advice) and he said I could quite easily get another 225k approved so I will be in the hunt for an investment property in the near future so if you wouldn't mind I'd be happy to take a look at any properties as they become avaliable.

    Cheers.

  7. #7
    Join Date
    Jan 2004
    Location
    Whangarei
    Posts
    5,867

    Default

    Quote Originally Posted by Fenix View Post
    I live on Anzac Road, as you know it's on a hill... My property basically has the front lawn which is higher than the where the house is situated... then the back yard is divided into two 'tiers'... I think that there would be extensive work required to get another house onto the place... Maybe if I took out the garage and built a garage on the front lawn, then started the house on the site of my old garage. Still, a lot of earthworks, time and money.
    You could always get a builder to take a look and let you know what can be done. They're short of work and would be happy for the chance! A call to a surveyor would give you an idea if it was sub-dividable too.

  8. #8
    Join Date
    Jan 2010
    Location
    Hibiscus Coast
    Posts
    1,777

    Default

    Not many builders left in Whangas! You'd be better looking at a housing company up there as they have the expertise at their fingertips.

    Alternatively $225,000 would get you a 3 beddy on a full site with $300 week rent. Rates $1300 pa, insurance $600pa


    Quote Originally Posted by drelly View Post
    You could always get a builder to take a look and let you know what can be done. They're short of work and would be happy for the chance! A call to a surveyor would give you an idea if it was sub-dividable too.

  9. #9
    Join Date
    Jun 2004
    Posts
    10,309

    Default

    Quote Originally Posted by Fenix View Post
    Thanks very much for the tip! Dies this 21-day thing still apply if technically, they are flatmates and not people who are renting the house?
    Reading this my 1st impression was that they were flat mates so the 21day things doesn't apply.

  10. #10
    Join Date
    Jan 2005
    Location
    Auckland
    Posts
    1,530

    Default

    If you own the place they are probably boarders rather than flat-mates. Flat-mates suggests they are co-renters, but as you own the place, and they are paying to live with you, that would make them boarders.

    Borrowing 100% is not without risk should you take up your mortgage broker's offer, and assuming you can find a place that is cash-flow positive. Similarly, borrowing "interest only" carries risk should you be considering doing that. It's your choice, but you are off to a good start so you have to decide if it is worth jeopardising it. In these troubled times I would be reducing debt fast. In fact, that is what I am doing myself, not that I am highly geared to begin with. It's hard to say "no" to what appear to be good deals, and yesterday I was offerred what sounded like a great buying opportunity (worth exploring normally) through a trusted agent - but at the moment my conservative side is winning against my greedy side.

    Meehole, using your figures, and assuming 48 weeks rent per year equates to a return on investment (for the building only) of 5.55%. Hardly going to set the world on fire with that!
    Gimme $20k. You will receive some well packaged generic advice that will put you on the road to riches beyond your wildest dreams ...yeah right!


 

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