Hi Guys,
I’m originally from the UK and have been living in Christchurch for about 8 years, really love New Zealand and recently got my kiwi citizenship!!
I’ve got 1 investment property, which I manage myself… plus a mortgage on my occupied home… I really enjoy property and I’m keen to build a portfolio. I’m hoping to be able to buy a 2nd investment property later this year. However after that it could be quite some time before I have the capital to buy another and so I have been researching different strategies that require less up front capital.
A strategy that’s popular in the UK is rent to rent… However I can’t find much (if anything) about this strategy in New Zealand and wondered why this might be. There are a number of different rent to rent approaches, but by way of example…
1) Find a 4 bedroom, 2 reception room rental property that’s currently being marketed as a single-let.
2) Agree a period of exclusivity with the landlord including a guaranteed rent amount for the period (usually between 3 – 5 years).
3) Do a light refurb if needed (eg. new carpets and paint etc)
4) Convert one of the reception rooms to a bedroom
5) Rent out each room individually to achieve a higher rental return
Clearly this is a cash flow strategy as the landlord continues to own the property and benefit from any capital gain (unless there is option to buy)…. I’m looking at it more as a way to create new income.
Interested to know if anyone on here does anything similar… If this isn’t a popular strategy in NZ why is that? Is it a cultural thing or is there a legislative barrier? Or perhaps people just struggle to get the numbers to work.
Would appreciate any feedback… as open an honest as you like
Cheers
Jay
I’m originally from the UK and have been living in Christchurch for about 8 years, really love New Zealand and recently got my kiwi citizenship!!
I’ve got 1 investment property, which I manage myself… plus a mortgage on my occupied home… I really enjoy property and I’m keen to build a portfolio. I’m hoping to be able to buy a 2nd investment property later this year. However after that it could be quite some time before I have the capital to buy another and so I have been researching different strategies that require less up front capital.
A strategy that’s popular in the UK is rent to rent… However I can’t find much (if anything) about this strategy in New Zealand and wondered why this might be. There are a number of different rent to rent approaches, but by way of example…
1) Find a 4 bedroom, 2 reception room rental property that’s currently being marketed as a single-let.
2) Agree a period of exclusivity with the landlord including a guaranteed rent amount for the period (usually between 3 – 5 years).
3) Do a light refurb if needed (eg. new carpets and paint etc)
4) Convert one of the reception rooms to a bedroom
5) Rent out each room individually to achieve a higher rental return
Clearly this is a cash flow strategy as the landlord continues to own the property and benefit from any capital gain (unless there is option to buy)…. I’m looking at it more as a way to create new income.
Interested to know if anyone on here does anything similar… If this isn’t a popular strategy in NZ why is that? Is it a cultural thing or is there a legislative barrier? Or perhaps people just struggle to get the numbers to work.
Would appreciate any feedback… as open an honest as you like
Cheers
Jay
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