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  1. #1

    Default How to get started with very little money in a crazy Auckland market???!!!

    Hi all....so here is the dilemma!!

    I am a newbie investor with only $400,000 to play with, live in Auckland and would probably prefer to buy here in Auckland, ( easier to renovate etc and also the potential future capital gains). I've taken that long pissing about that now with all the LVR changes and the market going bananas, that I can afford very little. My intention is to buy as many buy and holds as possible in the next 15 years to supplement my retirement.

    It seems my only options with a starting sum of $400,000 would be
    - a 2 or 3 bed house in Pukekohe, Tuakau or Waiuku
    - a CBD apartment
    - or a 2 bed unit somewhere in an Auckland suburb

    I need advice on which option is the best one to go with .....my concern about a apartment is that it will be hard to add value and therefore difficult to build up any equity to take out for property #2. The concern about Pukukohe is that it is too far away from Auckland CBD and therefore property prices may not increase so much there.

    Any ideas on where I should start would be gratefully received - I feel like I am going round in circles and need to make a decision and run with it ....just don't want to stagnate at 1 investment becasue I haven't made a wise decision in the first place

  2. #2
    Join Date
    Jun 2013


    Do you actually have $400k, or do you mean that is the maximum you can fund with debt?

  3. #3
    Join Date
    Sep 2014
    South Canterbury


    It could be argued that wanting to "invest” in Auckland in the current climate is already not a wise decision. Others will probably disagree.

    As for capital gains how sure are you that Auckland prices won’t stagnate/decline over the next 10-15 years? Some pundits are now picking a plateauing/ possible drop and then a long (5-10yr) flat spell (wouldn’t be the first) as the market corrects itself. How would your strategy cope with that? You probably won’t be buying “as many as possible” during that time frame as you won’t have the additional equity due to lack of capital gains to fund additional purchases.

    Or will the current shortage of stock driven by lack of land + immigration (and rampant speculation) continue to see reasonable capital gains for another 2,3,4,5 years? Who knows for sure.

    Should things go pear shaped in Auckland lots of people with very large millstones round their necks they are going to have to service for the next 20+ years: “I owe, I owe it’s off to work I go.”

    Personally (and I must admit here I am biased) I’d stay away from apartments as they are very volatile, have a tendency to leak and can be harder to flick on in a downturn. I’d got for 2 bedroom units or 2-3 bedroom homes and take Gary’s strategy of trying to add value by possibly adding an extra room (not always easy).

    I’d be basing my strategy on yield not capital gain (that is the icing on the cake if you get it but not a sound strategy), so that probably rules out Auckland (for me at least) at present for that reason too.

    The good thing about property investing is there is no right answer to which strategy to use or type of property to buy, people have done well out of apartments for instance, others got badly burned when prices fell last time. Unfortunately though get it wrong and you can lose everything so I tend to go with a cautious approach.


  4. #4


    Sound advice Courham....great point about lack of capital gains for 10 years in auckland hampering further purchases

    It's a guessing game heh so I agree about being cautious....and am generally...so I agree on basing strategy on yield at this stage...impossible/very difficult in auckland to get a good yield though right?

  5. #5


    Quote Originally Posted by elguapo View Post
    Do you actually have $400k, or do you mean that is the maximum you can fund with debt?
    Yes $400.000 is the maximum ASB will fund us - going to try a different bank to see if we can squeeze more

  6. #6
    Join Date
    Jan 2015


    Craig's right, a downturn can, and if you wait long enough, will eventually happen.

    What I've learned from chch's mini downturn of the last 2 years is that it's instant. There's no warning, suddenly you can't find anyone to rent anything and the solid bricks and mortar that you thought was indestructible as an investment, now looks a lot more dangerous. When a big downturn hits, we'll have to couple that with higher interest rates, lower rents, lower house prices, higher tenant expectations and tough bank lending conditions.

    The thing that saves you is having a margin in there so you can suck up making little to no money for a while, rather than taking huge losses. Currently, there's very little margin in either equity or cashflow if you buy a place in Auckland. Dangerous.

  7. #7
    Join Date
    Sep 2007


    Quote Originally Posted by ralabbalar View Post
    Yes $400.000 is the maximum ASB will fund us - going to try a different bank to see if we can squeeze more
    Borrowing up to the eyeballs at the top of the market... be careful man.
    Squadly dinky do!

  8. #8
    Join Date
    Mar 2007


    Quote Originally Posted by ralabbalar View Post
    . The concern about Pukukohe is that it is too far away from Auckland CBD and therefore property prices may not increase so much there.
    I have bought in Pukekohe over the last three years, and have seen quite reasonable gains over that time - e.g. bought at 472k late 2014 now valued at 700k.
    People who live in Pukekohe don't work in the CBD - despite what the planners and politicians would have you believe, not everybody who lives in the greater Auckland area works there.
    There is lots of employment in Manukau city.

  9. #9


    Is it to live in or as an investment? What kind of deposit are you showing the bank?
    Free online Property Investment Course from iFindProperty, a residential investment property agency.

  10. #10


    Hi Ralabbalar,

    Possibly have a chat with Ron Hoy Fong who offers a free first chat. I went and heard him speak at the Queens St ANZ about Oct last year and as Courham mentioned he and Gary seem to work on adding value to existing home units by adding an extra bedroom increasing the rent and value in a short time.
    He will tell you if $400k will get you anything.

    Also try thinking outside the square. I sold a small commercial unit in Auck late 2016 for $240k private sale so small investments can be still be found but not it is not easy.

    Try wanted to buy adverts or door knocking that can sometimes get you first chance.
    Last edited by Lovethiscountry; 21-03-2017 at 05:10 PM. Reason: Spelling


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