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  1. #1

    Default Reasons to not buy an IP outside of Auckland?

    Hi everyone,

    I'm a little new to this whole thing (and these forums, but have been reading and soaking up the awesome knowledge like a sponge), myself and my partner bought our first house a year ago in Auckland, which we are now selling due to splitting up and I'm looking at what to do with my share of any money. Its not enough to buy a worthwhile property in Auckland, but after a quick check tonight I've noticed a number of areas around the country (North Island specifically) where housing is extremely affordable.

    What I'm going over in my mind is the possibility of buying one an investment property in an area such as Te Kuiti, Moerewa etc where it should be at the very least, cash flow neutral, if not positive.

    Is there a downside or pitfall to this that I'm not thinking about? I still need to run the numbers on any property I investigate further, and would be sure to take into account vacancy rates and property management fees (as I wouldn't be in the same town/area to manage it myself)... but if the numbers stack up, its got to be a good idea right?

  2. #2
    Join Date
    Aug 2010
    Posts
    2,630

    Default

    Moerewa? Have you ever driven through Moerewa?

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

    Default

    Quote Originally Posted by TheLiberalLeft View Post
    Moerewa? Have you ever driven through Moerewa?
    Morewa: huge unemployment. Major employer is AFFCO (read the news), serious sewage problems. There's a reason the few shops that are still open all have roller doors. Suggest you take Olly Newland's advice. Buy in a nice leafy suburb.

  4. #4
    Join Date
    Dec 2009
    Location
    Tauranga
    Posts
    230

    Default

    Get the latest Property Investor Mag, or pull the DBH stats off their site a mull those over for a while.

    I would suggest looking into towns with more than say two major employers/industries and more than say 40k residents. Beware of the back peddling town, I'd have to say Moerewa and Te Kuiti fall into this category IMO.

    Olly's "leafy suburbs" buying is excellent advice, but it's not always easy when starting out to get the yields you need in nicer suburbs to grow a portfoilio so have a few "low-average" level properties to help sustain the "leafy" one's. Plan to offload the poorer performing of the "low-average" properties as the cycle matures and re-invest in more "leafy" properties as your portfolio grows.

    Just food for thought

  5. #5

    Default

    Bulls.
    Tenant to 3 lads, ladettes from Ohakea.

  6. #6
    Join Date
    Jul 2010
    Location
    Auckland City, why invest else where?
    Posts
    984

    Default

    Price reflects the quality of goods.

    Expensive usually means high quality/high demand.

    So think before you buy.

  7. #7

    Default

    I started investing out of Auckland. I am pretty hands on, so found it hard from a management point of view. Especially in the cheaper areas. I recommend buying in the better parts of any town you are looking at.

    But, over time with a bit a capital gains and paying the mortgage off it did help me get into the Auckland market.

  8. #8
    Join Date
    Oct 2005
    Location
    Auckland, NZ.
    Posts
    621

    Default

    It doesnt have to be a 5 bedroom stand alone house on 1000sqm in a leafy suburb.

    Could be a much more achievable nice 2bed unit in a leafy suburb.

  9. #9
    Join Date
    Jun 2008
    Location
    Nelson
    Posts
    191

    Default

    Quote Originally Posted by SwissKiwi View Post

    Could be a much more achievable nice 2bed unit in a leafy suburb.
    Hi Swisskiwi this comment caught my eye,

    So a 2 bedroom ownership flat makes an ok investment ?

    I'm still looking for my first IP and most 3 bedroom homes in Nelson in a reasonable area are over $300,000 by quite a bit and the rents are really crappy. I've always thought It would be a better long term investment to buy a house rather than a unit. Could be my thinking is scewiff ?

  10. #10
    Join Date
    Sep 2008
    Posts
    7,575

    Default

    30 years ago

    a 1 bed unit in newmarket or epsom was about $40,000

    as were the cheapest houses in the worst streets of otara

    now they are both about about $200,000 - $250,000

    and rent for about $300-$350pw

    http://www.trademe.co.nz/property/re...-457255647.htm

    http://www.trademe.co.nz/property/re...-473180199.htm
    have you defeated them?
    your demons


 

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