Looking for A 3rd rental investment and want to diversify by looking to Nelson region

[gmannz]

Hello All,

This is my first post up on the forum here, usually I just try and research information from the internet, however on this occasion I would like to try and get some expert feedback (local knowledge) on some of the best suburbs around the Nelson area for an additional rental investment. I will ring some local realestate agents for advice also, however this forum may offer a more neutral view.

Currently we have properties in Christchurch, however as much as we are one eyed Cantabrians, we want to ensure that all our eggs are not in one basket. We have family connections to the area, it is only a relatively short drive in case we need to manage property matters, I have lived in Motueka many years ago, however a lot has changed and need a fresh perspective.

We can use equity to purchase a property up to the value of 350K, and what to create a positive cash flow investment, by offering a competitive rent, as well as really caring for the tenants. This strategy has worked so far in the past.

Thanks in advance really appreciate any feedback.

Regards,

Greg

[ScottSI]

I would do a search for house under $ 350 k on trade me and realestate.co.nz as this is going to guide you to the few areas you can buy in sorry.

Nelson is pricey and $ 350k isn't going to get you much choice sorry - about 60 listings currently for 3br up under 350K in Nelson / Tasman region.

Most of these are Mot, Tap, Murch, Golden Bay etc. so your target areas are quite limited. I would personally stay out of Tap, Murch & GB unless you are holding a property for future relocation of yourselves.

Victory Sq area, Washington valley, some cheaper areas of Tahunanui, Stoke or Richmond are going to be the areas in that range. Rougher tenants, shaded in winter that type of thing to be aware of.

Flats can start from $ 200 k up etc.

Have a look on trade me at the rents and this will give you a good indication on gross return.

Mot does Ok for rentals but is slightly seasonal and does have some bad streets that will attract rougher tenants so depends on your ideal tenant profiles. Be aware lots of lease land in Mot.

Riwaka generally never has empty houses but again not much comes up under 350K.

Be aware of semi rural Nelson & Richmond, Mot, Riwaka, Tap, Murch, GB etc round tank water, septic tanks as they still exist in many locations and can cause issues and increased costs for owners.

[ScottSI]

For $ 350k you would get something pretty nice in Dunedin though.

[Davo36]

I'd listen to ScottSI, he's one of the better investors to post here.

[PTILoveYou]

Why not stick to chch?

I did a short talk at CPIA event on Friday and there are definitely still good deals around in Chch.

[gmannz]

Thanks Scott for the information, I understand Nelson is quite expensive, although it would appear from trade me there are some reasonable deals around, and you may get a little more for your money, as obviously Nelson is not as larger city center, as say Christchurch. I think we will shortlist some properties and go up for the weekend and have a look, to get a feel for the different areas. Thanks again.

[gmannz]

Why not stick to chch?

I did a short talk at CPIA event on Friday and there are definitely still good deals around in Chch.

Hi Gary, Thanks for your feedback, I would agree there are some good deals around and the quality of stock is high, as alot of places have been renovated. I do believe there will be a good story for Christchurch, as the city rebuilds and become a world class tourism and business hub with quality buildings and infrastructure. We are still in a very active earthquake zone, as to be fair most of New Zealand is, after last weekend my confidence took a hit, so I am a little cautious, this would be the main reason for looking at other regions.

"adversity makes a man wise, not rich"

[PTILoveYou]

Unless you cant find decent deals in chch, I think 3rd rental is a bit early to diversify.

[gmannz]

Unless you cant find decent deals in chch, I think 3rd rental is a bit early to diversify.

Thanks Gary, that is what my wife also thinks, fair call. So in a way Christchurch being a larger center may offer a more sound investment with less risk compared to some of the smaller cities, aside from the unknown.

[PTILoveYou]

Thanks Gary, that is what my wife also thinks, fair call. So in a way Christchurch being a larger center may offer a more sound investment with less risk compared to some of the smaller cities, aside from the unknown.

Yeah in long term buy and hold, there are less chance of things going wrong with a big centre like Christchurch than compared to a small town.

As a start, invest in cashflow, and overtime, start buying better and better properties in better locations (less yield but more leafy), and trade up.

[elguapo]

Yeah in long term buy and hold, there are less chance of things going wrong with a big centre like Christchurch than compared to a small town..

Nelson has more population growth than either Christchurch or Dunedin.

[PTILoveYou]

Nelson has more population growth than either Christchurch or Dunedin.

I heard plenty of good things about Nelson, and I have no problem with Nelson at all.

But Gman lives in Chch not Nelson.

[Wayne]

I'm not so sure about Chch at the moment.
Values jumped high based on a shortage of property (12k houses munted) and rents jumped for the same reason.
Supply and demand now better in balance so I think values will come back and so will rents.
Buy now and you risk losing capital as well as income.
Timaru and Oamaru aren't going to disappear any time soon and may be worth a look - I have no idea of the values and yields in either, just a comment on 'small towns'.

[PTILoveYou]

With CHCH, my concern is not in residential, but in commercial.

So many relics are yet to be pulled down and rebuilt, but there are so many new steel and glass office buildings going up.

Are there that many businesses to fill the new office space?? If existing businesses do fill the new offices, then the old offices must suffer then?

[Wayne]

With CHCH, my concern is not in residential, but in commercial.

So many relics are yet to be pulled down and rebuilt, but there are so many new steel and glass office buildings going up.

Are there that many businesses to fill the new office space?? If existing businesses do fill the new offices, then the old offices must suffer then?

Many businesses are making do with whatever they could find.
Spead staff across many sites.
Converted warehouse.
The 'old' buildings will go back to whatever they were doing before (maybe nothing).