If this is your first visit, be sure to
check out the FAQ by clicking the
link above. You may have to register
before you can post: click the register link above to proceed. To start viewing messages,
select the forum that you want to visit from the selection below.
I have to agree with many of the previous posts, I think the costs are hugely underestimated, I am an accountant in Queenstown and see a huge number of these types of properties, management companies charge for everything, stacking firewood, filling gas bottles, meeting trades people, changing light bulbs, taking stuff to be drycleaned. $100 is far too low for a clean, heating costs in winter take any margin out of it. It can work if you manage and clean yourself
These types of property are usually lucky to breakeven before interest costs, as Ahar says what happens if/when you can't get mates rates?
Thank you to all who answered,You have made some great points & helped me come to the conclusion that
this is something I would like to look at in future but at the moment with the one income and baby on the way think it would be wise to go with option 2.
Would you recommend Dunedin or Queenstown for a 3 bed rental property?
These are the closest large towns to us,we are living on a farm in south otago.
I'd be looking at cheaper properties with good yields in Dunedin, aiming for families rather than students (too risky). There are plenty of cheaper places in Dunedin, especially compared to Queenstown- you could probably get 2 solid rentals in Dunedin for what you'd be paying in Queenstown.
Re the original Q of rental vs holiday let. Start with rentals and build up your portfolio over time, then look at holiday homes if that is your thing. I bought a holiday home to add to my portfolio earlier this year in a beautiful yet relatively unknown spot (a place called Kakanui), return is less than if I rented it out full time but am on track for 90 nights for the year which equates to the equivalent of 45 weeks had it been rented out traditionally. I'm happy with this as it hasn't been added to make money, more as a place I aim to move into longer term. I get to use the place as often as I want (assuming I haven't guests) and I could look at options to get more bookings but are making enough off it as is.
However, if I were starting out (I've been investing in property about 18 years) I'd start with cheaper rentals and do basic things to add value and increase the rents and upgrade over time.
If I had 100k to start off I'd be looking at something in the $250-300K range max, ideally closer to the $250k end of the equation- especially if a baby was due. Who wants extra financial hassles at a time like that, especially if you have unexpected vacancies?
Comment