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  1. #1

    Default Advice on the future

    Hi Forum

    I have 5 cashflow property in south auckland. Had the odd tenant paying issue but overall, generally experienced no issues with renting the properties over the last 8 years. I purchased for long term buy and hold. I have a current statement of position that when I used the latest 2011 GVs at 80% the LVR covers all my mortgages and my PPOR has no borrowing but the property is used for collateral security from historical times when original rental mortgages where obtained.

    Generally the positive cashflow is used up in maintenance and I currently have 4/5 properties on floating mortgages with the 5th property coming off its fixrd rate within 12 months. If interest rates go back to average 7s % rate or greater, it may not become cash flow positive any more.

    Is the south auckland market worth staying in long term or should I sell.

    My thinking is if I am not really getting much cashflow and the likely capital gain is minimal, is it worth the hassel of keeping them.

    The properties are in clendon, and the area is not as bad as many say well in my expereince any way.

    Any constructive debate would be appreciated.

  2. #2
    Join Date
    Nov 2006
    Location
    Cyberspace
    Posts
    5,898

    Default

    How old are you?
    What is your long term goal?
    Where will you put the money if you realize the capital?

  3. #3
    Join Date
    Sep 2007
    Location
    Christchurch
    Posts
    1,260

    Default

    Are you renting them at current market rates, and how fast are your rents increasing?

    The hope is that long-term your rents increase but your mortgage doesn't, so inflation is your friend.

  4. #4
    Join Date
    May 2008
    Location
    Torbay, Auckland
    Posts
    3,942

    Default

    I got 2 in Clendon, I quite like the place actually, coastal and seaviews, a bit like the french riveria

  5. #5
    Join Date
    May 2008
    Location
    Manukau Auckland
    Posts
    1,049

    Default

    Recycledak,

    May I ask why you purchased in Clendon? Has your investment strategy changed now fro the time you purchased the 5 properties?

    If I was in your situation and had 5 properties in Clendon, I would do the following

    - Hold them for 2 yrs longer. You would then have owned them for 10yrs so won't be tainted (won't be liable for tax on sale of property) when you sell.
    - In 2 yrs time, start to try to sell a couple of the properties (if the investor market is in good shape by then)
    - If you do sell and get reasonable prices for the properties, I would then buy in better quality areas (the best you can afford).
    - Your 5 Clendon properties may equal only 2 or 3 properties in a better area but long term i think you will be a happy and more finacially well off guy. Remember its not about the quantity of properties its about how much overall rent you generate.

    Shane

  6. #6
    Join Date
    May 2008
    Location
    Manukau Auckland
    Posts
    1,049

    Default

    Quote Originally Posted by Bluekiwi View Post
    I got 2 in Clendon, I quite like the place actually, coastal and seaviews, a bit like the french riveria
    BK....only you could put that kind of spin on Clendon and get away with it around here :-).

    Nice one mate...I am still giggling.

    Shane

  7. #7
    Join Date
    Oct 2006
    Location
    Auckland
    Posts
    570

    Default

    Personally, I would sell up when the market picks up and buy 2 in a better location. Far too many problems can be had in those types of areas.

    FH


 

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