advise needs for my first investment

[czddrboy]

HI all
antoher option
at Water StOtahuhu
cross lease town house

3 bedroom 1 bathroom


price is 440k

current tanant pay $450/w

my situation is
deposit in hand is 160k
can borrow 640k from bank

is ok to buy
or any other strategy can be advised to me to start my investment journey.

thanks experts

[ivanp]

Not an expert myself, but I suggest stay away from plaster

[Frezzinghot]

Have you run the numbers on this, if it is negatively geared can you afford to keep it?

Fh

[Damap]

200 sqm land and plaster construction. Don't touch it!

[czddrboy]

whats reason? thanks

[Rosco]

I start with a quick gross yield calculation. So $450 * say 50 weeks (adjust down for bad areas) = 22,500 / 400,000 purchase price = 5.6% Gross yield.

This gives you an indication of the cashflow and gives you a comparison across properties. Have you looked at other similar properties and compared the Gross yield?

Next if seems reasonable, then I look at the overall cashflow. I normally work on 100% mortgage as there is an opportunity cost to you putting in cash. In your case I would look at 100% mortgage figures, then cashflow with your cash in. I'm guessing with 100% mortgage it will be quite negative, but with your cash in, it should cover itself, but you need to do the full figures and allow for all costs such as repairs, property manager, accountant etc.

Think hard on some of the earlier comments from other posters, as you want a normal house, in a normal area that is easy to sell if you have to. If others have instant concerns, this might make it harder to sell (if you had to)

Ross

[Damap]

Main reasons are
1. Value in Auckland especially is in the land. You have enough fire power to buy a decent full site, maybe even something big enough to add an MDU so why buy a postage stamp
2. Plaster homes, even non leaky ones suffer value drops of up to 20%. I know someone currently recladding their perfectly dry home in Remuera as they were advised the plaster finish meant 750K reduction in price.

Buy brick or weatherboard and as big a piece of dirt as you can!

[PTILoveYou]

dont buy plaster, ever!

Either buy an unit close to cbd in central suburbs for capital gain.

or go out west or south buy full or at least half section 400m2 or more. full section with minor dwelling/subdivision potential even better, but dont buy too far out and watch for quality of suburb too.

these two options will be negative cashflow so you need to ensure you can handle that.

else buy cashflow in outter south auckland or hamilton

[Damap]

Or buy a house out East and get best growth and land!!

[czddrboy]

Or buy a house out East and get best growth and land!!

Hi
which area your reconmand?

[czddrboy]

dont buy plaster, ever!

Either buy an unit close to cbd in central suburbs for capital gain.

or go out west or south buy full or at least half section 400m2 or more. full section with minor dwelling/subdivision potential even better, but dont buy too far out and watch for quality of suburb too.

these two options will be negative cashflow so you need to ensure you can handle that.

else buy cashflow in outter south auckland or hamilton

thanks for reply
how about buy a townhouse at otahuhu near to motorway
rent is $450/w
Gross yield is 5.2

how do you think?

[PTILoveYou]

thanks for reply
how about buy a townhouse at otahuhu near to motorway
rent is $450/w
Gross yield is 5.2

how do you think?

Not too close to the motorway though, and also needs to be stand alone house.

[Damap]

Pakuranga, East Tamaki, Ormiston.

[czddrboy]

Not too close to the motorway though, and also needs to be stand alone house.

I agree with you. my budget is 800k,which can afford a better one
if I buy a a stand alone townhouse, it may cost me 600k not 400k. yield goes down abviousely,the cash flow will be negetive.
if pricing goes down, it will be hard time on me. what i am think now is buy two townhouse ., reno it and rent within my budget

do you think unit or town house investment not good choice any more currently

I have watched your investment of story online, you buy unit at the beginning,then top up it and keeping buying and hold

looking forward to hearing you

[PTILoveYou]

I agree with you. my budget is 800k,which can afford a better one
if I buy a a stand alone townhouse, it may cost me 600k not 400k. yield goes down abviousely,the cash flow will be negetive.
if pricing goes down, it will be hard time on me. what i am think now is buy two townhouse ., reno it and rent within my budget

do you think unit or town house investment not good choice any more currently

I have watched your investment of story online, you buy unit at the beginning,then top up it and keeping buying and hold

looking forward to hearing you

If your budget is 800k, perhaps buy a home and income? ie two properties on same title?

Unit is ok, cashflow is not as good anymore, but anything in Auckland these days are bad in terms of cashflow.

Sometimes half section houses further out than central units offer same or better cashflow, you just need to find the right deal.