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  1. #1
    Join Date
    May 2015
    Posts
    250

    Default investment in rural areas

    Is it good idea to invest in rural areas such as near to Huntly,tokoroa, etc where house is cheaper and yield is above 10%.

  2. #2
    Join Date
    Nov 2009
    Location
    North Shore Auckland
    Posts
    565

    Default

    Quote Originally Posted by primal View Post
    Is it good idea to invest in rural areas such as near to Huntly,tokoroa, etc where house is cheaper and yield is above 10%.
    Just remember the general rule about increased yield meaning increased risk.

    These high yields often turn out to be more theoretical than actual

    And in this case, two horse towns with "cheap" property usually are very much at the mercy of one or two employers....AND it can be really hard to get good tenants....hence the quoted yields

  3. #3
    Join Date
    Mar 2014
    Posts
    362

    Default

    Long term population growth trends are what stop me considering tiny towns like this (sub 20k population).

    Decent sized public hospital also a requirement for me with baby boomers now starting to get heart attacks strokes and cancer (good times!) You see a lot of older folk leaving towns without a good hospital (including decent sized towns such as wanganui which lack a decent sized public hospital relying on nearby p.n public hospital for the big jobs) to live closer to hospital cities as regular trips or life saving treatment becomes a main focus.

    I'm genuinely concerned about the general state of public health in n.z as the boomers get older. A lot more govt $ needs to go here, some stories i hear are shocking and this before the real demand from the boomers hits.

  4. #4
    Join Date
    Jul 2015
    Posts
    103

    Default

    Employment is a big driver of property markets, where there are jobs people move to live. Given the state of the dairy industry I would be wary of small town in NZ, likely shrinking job numbers followed by internal migration to the main centres for employment. Yield wise I started with 13% gross yield on one of my small town NZ properties and it slowly got eroded to a loss making property by increased rates, increased insurance premiums, significant maintenance costs and stagnant rents. Population was only 3000 so maybe worse than other towns

  5. #5
    Join Date
    Apr 2004
    Location
    Auckland
    Posts
    1,895

    Default

    Is the cash flow high enough to cover all the expenses?
    Maintenance bills can be higher than expected.
    Can you get a tenant?

    If you can put the cash flow towards paying the property off quickly (15yrs?) then might be worth considering.
    Even if you get 0% capital gain - you would have something in the end.
    How hard is it to re-sell and get out should things go bad?
    The three most harmful addictions are heroin, carbohydrates and a monthly salary - Fred Wilson.

  6. #6
    Join Date
    Nov 2009
    Location
    North Shore Auckland
    Posts
    565

    Default

    Just remembered.....I started a thread a few weeks ago about the rental market in Kaitia....and if I knew how to post the link I would

    Had been talking to a person who claimed a couple of rentals had been empty for nearly a year due to the lack of suitable tenants

    I understood that "suitable" meant would pay the rent on time and not damage the property.

    IMHO many rural towns are infested with feral types....not the sort you'd want to rent to

  7. #7

    Default

    Quote Originally Posted by Ahar View Post
    Had been talking to a person who claimed a couple of rentals had been empty for nearly a year due to the lack of suitable tenants
    Why don't they sell them ?

  8. #8
    Join Date
    Jun 2004
    Posts
    10,313

    Default

    Also remember that the rates can be high in some of these towns (as a % of the rent) and eat your 'profits' quickly.
    You need to look at the costs and net return rather than gross.

  9. #9
    Join Date
    Nov 2009
    Location
    North Shore Auckland
    Posts
    565

    Default

    Quote Originally Posted by speights boy View Post
    Why don't they sell them ?
    I believe in both instances the buyers were from that area and wanted to retire there....heavens knows why

    I understand the population of Kaitaia is down about 2.5% over the last ten years

    Can only see that trend continuing....unless the major employer starts up

  10. #10
    Join Date
    May 2015
    Posts
    250

    Default

    Is buying new developed house good options in Huntly.
    What about houses that are currently tenanted.
    What are the best areas to buy in Huntly. What about Russell road, Manuka road where new development is happening.
    Is rates expensive there. Expenses wise.
    Anything to look for when buying in Huntly.
    What about areas that had mining.

    Too many questions when investing in Huntly.
    Is it preferable to buy in hamilton or Huntly capital gain wise.
    What about buying apartment unit in hamilton that has not been built yet.


 

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