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Thanks Nick. Tokoroa is an interesting place for me. Its close to Hamilton, Tauranga, Cambridge and Rotorua. Lack of industry there worries me but being so close to a few major centres it's not a long commute for work. As you say can pick up a decent rental for 100-150K. I don't think it will be a boom town per se but I think house prices will remain consistent and people may look to Tokoroa as first house option.
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small town in a remote location.
80km and 1hr to Hamilton, 75km and 55mins to Tauranga, 55km and 40 mins to Rotorua, 65km and 45mins to Taupo
220kms to Central Auckland and 210kms to Napier.
A damned sight more central to the North Island than Auckland is.
How long does it take you to get to work in Auckland?"There's one way to find out if a man is honest-ask him. If he says 'yes,' you know he is a crook." Groucho Marx
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The thing to look at is what's going to happen from here? An awful lot of folks are hitting retirement age right when there is a housing squeeze and are looking for more bang for their pension buck. Anyway, do your research and maybe message Wayne from our website he'd be happy to talk about it having lived there his whole life.Free online Property Investment Course from iFindProperty, a residential investment property agency.
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Originally posted by Wayne View PostSpeights - I'll drink to that.
Hint - spate.AAT Accounting Services - Property Specialist - [email protected]
Fixed price fees and quick knowledgeable service for property investors & traders!
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Originally posted by Hamz1207 View PostThanks Nick. Tokoroa is an interesting place for me. Its close to Hamilton, Tauranga, Cambridge and Rotorua. Lack of industry there worries me but being so close to a few major centres it's not a long commute for work. As you say can pick up a decent rental for 100-150K. I don't think it will be a boom town per se but I think house prices will remain consistent and people may look to Tokoroa as first house option.
FH"DEBT BECOMES IRRELEVANT WITH INFLATION".
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Cashflow may be good but you must look at net cashflow - after rates, insurance etc.
Usually in places like this (small size) rates are around the same as the bigger cities (costs the same to flush a toilet no matter what the cost of the house) but as a % of the value they look high.
So as a % of the rent (number of weeks rent) they suck up your cashflow.
Repairs make a bigger difference too.
You need a much higher % return to make them pay.
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It depends on what your investing strategies are I guess.
For example you aren't going to get major capital gains, especially if you start this time of the cycle.
Tokoroa is like other small town NZ that is a little vulnerable when the market peaks. When it does it traditionally losses 10 -30% and then stabilises for 5 - 8 years until it again follows the larger cities and goes through a couple good years of growth like it is now, always be weary of whats coming up and how the major business's are going.
Make sure you are holding enough for the expenses from the rent, i.e. maintenance, rates, insurance, etc...
Just make sure you are investing their for the right reasons.To Sell or Buy Investment Property contact us. 0800 NZ PROPERTY or 021 402990
www.propertyventures.co.nz
*New* Check out our weekly free property show http://propertyventures.co.nz/podcast
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Originally posted by Wayne View PostCashflow may be good but you must look at net cashflow - after rates, insurance etc.
Usually in places like this (small size) rates are around the same as the bigger cities (costs the same to flush a toilet no matter what the cost of the house) but as a % of the value they look high.
So as a % of the rent (number of weeks rent) they suck up your cashflow.
Repairs make a bigger difference too.
You need a much higher % return to make them pay.
RossBook a free chat here
Ross Barnett - Property Accountant
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Originally posted by Wayne View PostCashflow may be good but you must look at net cashflow - after rates, insurance etc.
Usually in places like this (small size) rates are around the same as the bigger cities (costs the same to flush a toilet no matter what the cost of the house) but as a % of the value they look high.
So as a % of the rent (number of weeks rent) they suck up your cashflow.
Repairs make a bigger difference too.
You need a much higher % return to make them pay.
Perhaps also vacancies can be extended for long periods too!
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Talk to Fiona from Rent Assured about what makes a good rental. She's local and fussy :-)
Good tips in this thread about keeping an eye on your fixed costs as a ratio to rent.Free online Property Investment Course from iFindProperty, a residential investment property agency.
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On Trademe, 4 to rent in Tokoroa!
But also 120 for sale.
An example of one for sale.
Units, and agent saying 10% Gross Yield - which sounds good but obviously based on 52 weeks.
7 owners since 2004, plus currently on the market! Gives you an idea of what investors have thought once they actually own it!
Here would be my workings on cashflow
Income: Rent - Weeks 46 22080 Per week 160 3 units As a % of total house 8.83% Less Expenses: Accounting 1200 Bank fees 50 Body Corporate 0 If interest goes up Insurance 1500 Interest Rate 5.00% 12,500 7.50% $18,750.00 Property Management at 7.5% plus GST 1,904 Rates 4779 Repairs and Maintenance 2000 Seminars Subscriptions Travel 500 Total Expenses 24433.40 $30,683.40 NET CASH SURPLUS (DEFICIT) -2353.40 -$8,603.40
So in my opinion factoring in vacancy and fair expenses, it would be losing cash!Book a free chat here
Ross Barnett - Property Accountant
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