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  1. #21

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    HI Raddies,

    Do you actually enjoy your day job or are you trying to get out of it?

    Cheers

  2. #22

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    Quote Originally Posted by charlotte30 View Post
    Dear Raddies

    I am in Christchurch and can recommend Scott miller as a mortgage broker. He is a property investor as well. I think you should keep your day job so you can maximise your borrowings. Do what you can when you can. It is surprising how quickly you can leapfrog forward using equity and cashflow. Personally I have found it more cost effective to employ tradies rather than do most jobs myself. Quicker turnaround. I just do most of the clean up work. I have just purchased a property within the four avenues that is in 4- one bedroom flats on 1100 sm land. It has not had any maintenance done for 30 years. We have a plan to renovate and re-rent within 3 months. There is no way I achieve this myself in that timeframe.

    Cheers

    Charlotte30

    Hi Charlotte,
    Cheers for the recomendation of Scott Miller, I will definatly touch base with him.

    Yes looking like keeping the day job is the most viable option for me at this stage, good to hear from someone else purchasing within the four aves, I believe there are stong capital gains to be made within the 4 aves once the city is re-built (5+ years away) and in the mean time good rental yields due to all the workers required.

    Are you a member of the Canterbury PIA? If so, may get to discuss our projects at one of the meetings/seminars.

    Cheers,
    Nick

  3. #23

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    Quote Originally Posted by Auckland Newby View Post
    HI Raddies,

    Do you actually enjoy your day job or are you trying to get out of it?

    Cheers
    Hi Auckland Newby,
    My job is OK however if I/hopefully when I one day have a passive income that allows it, I would choose to work on my own property projects as this is where my real interest lies.
    Cheers,
    Nick

  4. #24

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    Quote Originally Posted by ScottSI View Post

    13.06% is the gross yield off rent earned vs purchase price.I am a cash-flow buyer so need to earn money from each property to pay me, meet serviceability requirements and cover unforseen costs. My target is 12% + with many renovation projects make 14 to 15% range.

    Cheers Scott, that is an impressive rental yield!

    Question - As for adding equity value through renovations, do you have a rule of thumb or rough figure you expect to gain in value for your renovation investment? I know all properties are different and different houses require different types of renovations to add value (an to not do the incorrect improvements for a certain property), but do you expect to say double your renovation investment on properties should you do this correctly? (i.e. Spend 25k on new kitchen/bathroom/carpet/paint etc = 50k increase in property value).

    Cheers,
    Nick

  5. #25
    Join Date
    Sep 2012
    Location
    Wellington
    Posts
    225

    Default

    Great to hear about what people mare looking at doing. I also wantr to live the dream hahaha. I have been doing IP for 2 years and about to buy my 5th place. I do not think I could sustain not working until I have at least 10 properties.

    I have just joined the Wellington PIA so looking forward to heading along to my first meeting later this month.

  6. #26
    Join Date
    Nov 2011
    Location
    Riwaka
    Posts
    406

    Default

    Quote Originally Posted by Raddies View Post
    Cheers Scott, that is an impressive rental yield!

    Question - As for adding equity value through renovations, do you have a rule of thumb or rough figure you expect to gain in value for your renovation investment? I know all properties are different and different houses require different types of renovations to add value (an to not do the incorrect improvements for a certain property), but do you expect to say double your renovation investment on properties should you do this correctly? (i.e. Spend 25k on new kitchen/bathroom/carpet/paint etc = 50k increase in property value).

    Cheers,
    Nick
    Book value increases after renovation - So much more to it sorry but here are a few tips.

    I work on a 1 to 10 ratio (I don't pay myself as no point in taking funds out if I don't have too) if I do the work so 4K spent = 40k increase

    If I use some contractors for general labour it drops to about 1 in 8 ratio.

    These ratios aren't just from renovation they are supported by my buying patterns which is a novel in it's self.

    Book value increases:

    1 - You must know what houses sell for in your area - get info off valuers, property guru, etc. If you do not know what a valuer will value the house at you don't know what you are doing. I am conservative so often are under by 5 to 15 K so always a nice surprise.

    2 - You must get below market price to increase equity gains - Buying techniques

    3 - Your improvements must be effective - I could drop 100K (piles, wiring, plumbing, roof) on a house and get 20K increase so total waste of time and I have seen this all to often by new investors & traders.1 huge structural reno took me 3 months, made 117K in equity and earn $ 83.20pw when rented. Compare to one that 1 that took 2 days, made 60K in equity and earns $ 82 pw. If I did one a week for 3 months (12) that's 720K in equity and $ 984 income a week after all costs - Pretty simple maths really.

    4 - Different areas / tenants want different things - Dog properties need good fencing, bogans like garages, students like parties, internet & heating, Dunedin like parking, Hastings like garages for turning into bars, and everyone loves a deck even though most never use it.

    5 - Don't expect the house to value above the area - If you have an average street and spend a million dollars doing up the house (kitchens, vanities, pools etc) it is still an average street - Called over capitalisation

    Renovation Tips


    Time is money - every day a house is out of rental stock it is costing you money. You need fast turn around. I would go to the house on settlement day and sleep there. I would start at 7 am and usually go through to about 12 - 2 am which is hard on the body (like a mountaineering expeditions which I loved) but the house would be advertised within 3 - 5 days and back in stock. This is what I did you need to get your own plan.

    Costs Down: Trademe, Trademe, Trademe, I have sheds in Dunedin, Christchurch, Nelson and Hasting full of stoves, hot-water cylinders, showers, vanities, doors, paint, handles, timber, MDF etc ready for the next reno. Also CURTAINS & TRACKS - these are expensive!!!!!

    Get a network of good tradies and labourers.

    Method: You need a set plan and I have refined mine to get the property ready for showing after 2 - 3 days. Finishing work takes up the last few days but often the property manager has an application on day 2 or 3.

    If you are bored go to our facebook page as I have posted a few renovation videos on there which include the numbers etc.

    Happy renovations.

    Regards

    Scott
    Plan and invest wisely - You only get one life so make the most of it!

  7. #27

    Default

    Thanks heaps Scott, I I'll check out your videos tonight

  8. #28
    Join Date
    Jan 2007
    Location
    Christchurch
    Posts
    240

    Default

    Dear Raddies

    Have sent you a private message. I also recommend attending seminars that Scott runs in conjunction with ANZ in Christchurch. Once a week over 7 weeks if I remember. Great value and free. You also get to interact with other Christchurch investors. I am not a member of CPIA but go to meetings when the speakers interest me.

    Charlotte30

  9. #29
    Join Date
    Jul 2012
    Location
    Tavua, Fiji
    Posts
    3,347

    Default

    @RaddiesI started in a slump so had some benefit in there was little competition for homes in Auckland then. I ran into all the usual problems one does when one has no regular income but as the market picked up AKA same as right now, I did well. I was making more in a trade than I used to in a year and was soon up to 20 rentals.

    My biggest mistake was not selling down before the GFC. I actually had started and sold 3 homes at huge profits but then the world ended. Thankfully in spite of some difficult years Auckland continues to be good to me. My homes in the rest of NZ have been stagnant but their day will come which I am sure my kids will enjoy :-)

    Can't think of much I could say to help you I am a simple soul. I just bought houses at 20 to 40% below market and rented them. I had such good equity on paper the banks continued to like me and I kept buying.

    My only piece of advice is ignore the spruikers and mentors they will push you outside of what you are mentally capable of. I have watched countless friends pay a fortune to learn how to get rich and they almost without exception are now poorer and wiser and hate property investment.

    Learn enough to come up with some simple rules and go and have a go.

    My 100% rule not to be broken that I did break and nearly killed me was/is:
    "Buy 20% below market or more and NEVER REFINANCE"

    Good luck!

  10. #30
    Join Date
    May 2007
    Location
    Hamilton
    Posts
    3,673

    Default

    The "never refinance' is a great rule. So many investors have a good property with good equity, ​but come across hard times so borrow more on the rental, or money to buy a new car, all of which put pressure on the first rental.

    Ross
    Last edited by Rosco; 14-09-2014 at 09:04 PM.
    Not sure where to start, book a free chat for 5-10 minutes https://cswaikato.co.nz/services-pro...s-hamilton/201
    Ross Barnett - Coombe Smith Property Accountants



 

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