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%.
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Originally posted by primal View PostIs it good idea to invest in rural areas such as near to Huntly,tokoroa, etc where house is cheaper and yield is above 10%.
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
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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.
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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
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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.
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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
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Originally posted by speights boy View PostWhy don't they sell them ?
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
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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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Originally posted by primal View PostIs it good idea to invest in rural areas such as near to Huntly,tokoroa, etc where house is cheaper and yield is above 10%.
They basically cashed them up at a big loss and then buy in Auckland.
A workmate and investor also did the same, $40k loss ouch!!!
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Originally posted by Gary Lin View PostI have classmates who have properties in Tokoroa when they bought into it in 2006/7.
They basically cashed them up at a big loss and then buy in Auckland.
A workmate and investor also did the same, $40k loss ouch!!!
I have spent time living in the provinces after moving from Auckland. I have also kept an eye on property prices in various spots. I have visited (or lived at) many of these cheaper spots and had a first hand look at the situation on the street. (Emphasis added - this is very important for anyone seeking to buy).
To be clear - the rules in Auckland - where the market sets the price - do not apply in the provinces. People who turn up with cash burning a hole in their pocket are at a high risk of paying too much and/or getting hoodwinked by the agent's 'mates'.
This is point 2 - Never underestimate the social circles which operate in provincial areas.Last edited by PTWhatAGreatForum; 12-08-2015, 01:42 PM.
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Originally posted by MichaelNZ View Post+1.
I have spent time living in the provinces after moving from Auckland. I have also kept an eye on property prices in various spots. I have visited (or lived at) many of these cheaper spots and had a first hand look at the situation on the street. (Emphasis added - this is very important for anyone seeking to buy).
To be clear - the rules in Auckland - where the market sets the price - do not apply in the provinces. People who turn up with cash burning a hole in the pocket are at a high risk of paying too much.
Yeah there are certainly two different rules regarding investing in Auckland or out of Auckland.
Out of Auckland, just do what Graeme Fowler & all the books preach, cashflow.
Banks are definitely not helping the small towns. They don't lend kindly to Tokoroa that's for sure!
Auckland, well tough luck, speculate now, or wait a long time.
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One of the strategies I have used quite a few times is to go and knock on the door and have a yarn with the neighbors. People are generally friendly and good information can be obtained this way.
One question I strongly recommend asking is "how long has this been vacant/for sale" etc? Out in the provinces one will often be surprised. Reasonably nice looking properties can stay on the market for awhile. As I said, the rules are very different. Auckland is in the grip of a mania. Most of the rest of the country is not and this reflects in a lot more realistic real estate market.
Where I live is a typical lower North Island farming settlement (It's not even a town). It's a pretty good spot and we have no gangs or obvious social problems here. There is a 3 or 4 bedroom house for sale on a large section with an asking price of around $100k. It's been for sale for ages. It's being rented at present but the periods with no tenants can be a few months at a time. It's an ok spot and looks like an ok property. It's just in a cold area where there is hardly any industry other than farming.Last edited by PTWhatAGreatForum; 12-08-2015, 02:01 PM.
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