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  1. #1
    Join Date
    Jan 2004
    Location
    Whangarei
    Posts
    5,867

    Default Yields in the Provinces

    Just wondering what sort of yields investors are looking for in the provinces? I'm considering selling a couple of properties later this year in Whangarei and Paihia.

  2. #2
    Join Date
    Sep 2014
    Location
    South Canterbury
    Posts
    513

    Default

    Looking for or getting?

    My best yield is about 22% based on what I paid for it, about 12.5% at current market value.

    If I were buying I'd be looking at 8%+ down where I am but that is getting harder to do at present.

    Craig

  3. #3
    Join Date
    Mar 2015
    Location
    Brisbane Wellington Auckland
    Posts
    807

    Default

    Is that gross or net yeilds?

  4. #4
    Join Date
    Aug 2009
    Location
    Auckland
    Posts
    1,080

    Default

    My best gross was 18% and if I was to buy in the provinces again (I don't count Rotorua as one), I would not settle for less than 12% gross as I know the challenges involved with them.
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  5. #5
    Join Date
    Apr 2004
    Posts
    769

    Cool newbies

    And the next to nil cap gain ...I seen a property in Invercargill(sisters old house) that recent sold for less than it did several years ago ....and going off rents you be doing well to get 7-8% gross yield over those years ....then add in the high rates to values one pays in southland (have seen rates make up near 10% of R.V)....
    you newbies are welcome to buying them up ... as every decent high yielding Southland/otago property i have enquired about 20+ has been brought by out of the area investors ......

    the smart buyers down here are buying the high Capital Growth areas close to the likes of Queenstown when is the most expensive town to incomes in NZ..... I myself after fighting with many out of the area investors in buying higher yield properties to instead buy two side by side 1000sqm Lake view sections 30mins south of Wanaka 45mins to Queenstown ...178k + GST ea titles due early to mid 2017 so only 10% now ......

  6. #6
    Join Date
    Aug 2009
    Location
    Auckland
    Posts
    1,080

    Default

    I don't think it's fair to indicate that only newbie investors purchase in provinces. We have a number of properties in Auckland, Hamilton, Rotorua as well as some provinces. It is just that if anyone is keep to purchase in provinces they need to have a very clear goal and have done their research. My main worry about the provinces is not the capital gain (as any knowledgeable investor would know there is no to very little) is the cost of maintenance due to limited number of tradies around.
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  7. #7
    Join Date
    Sep 2014
    Location
    South Canterbury
    Posts
    513

    Default

    Quote Originally Posted by BigDreamer View Post
    I don't think it's fair to indicate that only newbie investors purchase in provinces. We have a number of properties in Auckland, Hamilton, Rotorua as well as some provinces. It is just that if anyone is keep to purchase in provinces they need to have a very clear goal and have done their research. My main worry about the provinces is not the capital gain (as any knowledgeable investor would know there is no to very little) is the cost of maintenance due to limited number of tradies around.
    Somehow the internet ate my reply last night. My yields are gross- only expense is rates, insurance and some maintenance.

    As for no capital gain in the provinces, that is bull. Invercargill has had some very flat years at times but other parts of the South have enjoyed reasonable gains oer sustained timeframes- I don't invest up north so no expert on North Isladn provinces but from what I've read on these forums NI provinces have very different experiences to South Island ones in the past decade or so where many East Coast south Island provicnes have doen weell economically. The gains may not be as spectacular as in Auckland over the past few years, or other major cities, but still reasonable in many places. Depends what you are after though.

    As for less tradies IMO it is safer and easier down here- it is all about relationships and a trademsen word is still worth something and reputations can be easily lost so they tend to look after them and their customers.

    Craig

  8. #8
    Join Date
    Mar 2015
    Location
    Brisbane Wellington Auckland
    Posts
    807

    Default

    Quote Originally Posted by Courham View Post
    Somehow the internet ate my reply last night. My yields are gross- only expense is rates, insurance and some maintenance.

    As for no capital gain in the provinces, that is bull. Invercargill has had some very flat years at times but other parts of the South have enjoyed reasonable gains oer sustained timeframes- I don't invest up north so no expert on North Isladn provinces but from what I've read on these forums NI provinces have very different experiences to South Island ones in the past decade or so where many East Coast south Island provicnes have doen weell economically. The gains may not be as spectacular as in Auckland over the past few years, or other major cities, but still reasonable in many places. Depends what you are after though.

    As for less tradies IMO it is safer and easier down here- it is all about relationships and a trademsen word is still worth something and reputations can be easily lost so they tend to look after them and their customers.

    Craig
    Hi Craig What would your net rental yield be ?
    My properties in Napier net yield 6.5% hard to tell what the capital gain has been but CG is not main aim ..its the profit margin i am interested in!

  9. #9
    Join Date
    Feb 2015
    Posts
    105

    Default

    My central Invercargill house has a 6% gross yield. It is a high quality property and has experienced only modest CG over 6 years, a total of 4 weeks vacancy, excellent tenants, and quality maintenance. It is a trouble free long-term investment and the principle has been quietly reducing. Net yield is still quite good as I have a good property manager who is not extortionate.

  10. #10
    Join Date
    Oct 2013
    Posts
    1,621

    Default

    I don't understand why people seem to think there's no capital gain in the provinces. I have no experience there myself, but basic logic tells me you're dead wrong.

    http://www.enz.org/house-prices-si-towns.html tells me that the average price in Invercargill was $198k last year, and $195k in 2010. So I accept there has been no gain on average for the last five years.

    But you can't tell me prices were $195k twenty five years ago. In 1990 the average Auckland house price was around $200k. I don't have any stats to support it, but I'd guess that average Invercargill prices back then were $60-85k, about a third of Auckland's at the time, as they are now. Anyone have stats to support or disprove me?

    If anything, I argue that regions that have been flat for a while are due to go up. Unless a town is clearly dying, why would the value of a region significantly decrease proportionally in relation to the rest of the country?
    Last edited by Anthonyacat; 17-06-2016 at 09:24 PM.
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