Regional Towns Worth Investing

[flyernzl]

Given the high prices and consequential low returns on residential rentals in Auckland, some investors are looking at buying in the smaller North Island towns.

Obviously some of these places are dog-tucker - Murupara, Te Kuiti, Galatea, Wanganui etc.

So any ideas on which regional towns do have some economic future?

My own pics would be Tauranga (benefits from the port), Taupo (haven for retirees), New Plymouth (energy) and Palmerston North/Fielding (education).

Any comments on these, or other possibilities?

[Maccachic]

Timaru - Port of Tauranga has just acquired an interest in the port there so could be a growth town.

I would say Tauranga is more of a haven for retirees, when I lived in Taupo (3 years ago) I expected it to be a more Queenstown of the North (moved up for Dunedin) but was surprised at low socio economic demographics of the area - doctors visited are well subsidised in Taupo (for eg) there are the rich, I didn't notice that many retirees - I didn't like to town personally rather transient (tourism workers).

I'm still hoping Dunedin gets some flow on effects its a nice town but weather isn't great - global warming may help.

[Leftette]

Moerewa! %-wise it will (has) increased faster than everywhere else.

[flyernzl]

Moerewa! %-wise it will (has) increased faster than everywhere else.

From $1 to $2?

[Leftette]

100% mate. Can't argue the mathematics. Stats don't lie. Cliche etc.

[elguapo]

Timaru - Port of Tauranga has just acquired an interest in the port there so could be a growth town.

Agree, I think Timaru has more potential than anywhere else in the South Island.

Tauranga is a bit pricey IMO and Taupo seems to still have a huge hangover from 2006-2007 prices, when people did think it was going to be the Queenstown of the north.

[Meehole]

Our rental in Whangarei is becoming vacant in a couple of weeks and the PM tells me that she will have no trouble renting it as there is a shortage of good properties to rent. My parents who live up there have just been told by an agent that properties in this suburb are selling well to investors so wondering if we should sell instead. We have had no capital gain since its purchase in 2007 but have increased our equity.
We have another property up there and would keep that one as it is in a higher price bracket and the demand in this price range is not as great. (yet?)
Should we sell or should we keep? Any suggestions??

[flyernzl]

Looks like more of an income investment than a capital gain investment, which is not necessarily a bad thing.

[Pim]

Our rental in Whangarei is becoming vacant in a couple of weeks and the PM tells me that she will have no trouble renting it as there is a shortage of good properties to rent. ***********
Should we sell or should we keep? Any suggestions??

What would you do with the money if you sold Meehole? Buy elsewhere? Why don't you work out the rental yield based on what you'd get for it today and see if you'd do better elsewhere (maybe in Dunedin = best yields atm) I have done that exercise as I want to sell my 2 Dunedin units but cannot get a better yield elsewhere plus, with selling costs, would lose some equity so I am resigned to keeping them and using the equity/rental income to buy elsewhere.

[Meehole]

What would you do with the money if you sold Meehole? Buy elsewhere? Why don't you work out the rental yield based on what you'd get for it today and see if you'd do better elsewhere (maybe in Dunedin = best yields atm) I have done that exercise as I want to sell my 2 Dunedin units but cannot get a better yield elsewhere plus, with selling costs, would lose some equity so I am resigned to keeping them and using the equity/rental income to buy elsewhere.

We need to add some garaging to our PPOR to store our gear for our business so it would save us borrowing the money or could try and find a do up and do a trade?
2 Librans trying make their minds is not good. Very indecisive......

[Maccachic]

We need to add some garaging to our PPOR to store our gear for our business so it would save us borrowing the money or could try and find a do up and do a trade?
2 Librans trying make their minds is not good. Very indecisive......

Talk to your accountant about restructuring debt on the rental if possible and use this to fund it?

[Meehole]

Talk to your accountant about restructuring debt on the rental if possible and use this to fund it?

He is fan of investment properties and would probably suggest restructuring, which is a possibility.

[Courham]

Timaru's economy is strong and we have seen a $40,000 incr in average house prices in last year (according to today's paper), however that means rental returns are down if trying to get into the market here. Also, the capital gains have, traditionally, been traditionally low but there are usually a few bargains about.

[Meehole]

Timaru's economy is strong and we have seen a $40,000 incr in average house prices in last year (according to today's paper), however that means rental returns are down if trying to get into the market here. Also, the capital gains have, traditionally, been traditionally low but there are usually a few bargains about.

Do you think that there have been a lot people move there from ChCh with insurance money?

[flyernzl]

I was in Timaru last December.
The local gossip was that yes, they were benefitting from the Christchurch exodus.

But my original question was about buying in the smaller North Island towns.