What would rolling back the LVR restrictions mean for you?

[Nick G]

Say they went to 30% in 6 months and 20% 6 months after that while home buyers went 15% and then 10%.

What would you look to do? Assume lending rates same as now (low) and financing environment the same as now (tough).

My formula in the last 2 years has been buy properties and do large remodels and renovations to increase the value by a lot (50%+). It's a slow process by the time you go through working drawings, council, build, wait for the lease to come up it's 9-12 months.

If a bunch of equity suddenly became available I'm thinking:
a) Stick to the plan but do trades at the same time (I will keep the hold for 10 years+) or
b) Look to lower income housing, probably through subdivision + relocatable. Would mean I'm not totally exposed to one market... but I need to think this through. Currently I'm in the inner suburbs only. Wellington... mainly because I have a team there that's done well and it's an excuse to visit a cool city.
c) Be interesting what happens with new build deposits. Dropping to 10% for investors would be nice and central ChCh is pretty cheap right now with population on the uptick.

Some random thoughts.

[DaveW]

Say they went to 30% in 6 months and 20% 6 months after that while home buyers went 15% and then 10%.

What would you look to do? Assume lending rates same as now (low) and financing environment the same as now (tough).

My formula in the last 2 years has been buy properties and do large remodels and renovations to increase the value by a lot (50%+). It's a slow process by the time you go through working drawings, council, build, wait for the lease to come up it's 9-12 months.

If a bunch of equity suddenly became available I'm thinking:
a) Stick to the plan but do trades at the same time (I will keep the hold for 10 years+) or
b) Look to lower income housing, probably through subdivision + relocatable. Would mean I'm not totally exposed to one market... but I need to think this through. Currently I'm in the inner suburbs only. Wellington... mainly because I have a team there that's done well and it's an excuse to visit a cool city.
c) Be interesting what happens with new build deposits. Dropping to 10% for investors would be nice and central ChCh is pretty cheap right now with population on the uptick.

Some random thoughts.

That is an interesting post. More equity released will allow you to borrow more and if you say you can add 50% to the value of a property then that is good business. What % of the property value you would spend on the renovations, holding costs and other expenses?

[Nick G]

15% or so... so far.

They're unicorns.... hard to find and it can be a while between drinks. That's why I was thinking in the burbs with relocatable houses or something... it just seems like it would be more repeatable.

Or, figure out the same strategy with commercial. I believe we spoke once and you were doing that, a few years back. Or have I got the wrong Dave?

[DaveW]

15% or so... so far.

They're unicorns.... hard to find and it can be a while between drinks. That's why I was thinking in the burbs with relocatable houses or something... it just seems like it would be more repeatable.

Or, figure out the same strategy with commercial. I believe we spoke once and you were doing that, a few years back. Or have I got the wrong Dave?

Yes that's me. That's good going 35% profit, even if you do one a year you can keep adding to your portfolio. Yes you should look at both residential and commercial and check the numbers before buying. Commercial is all about yields, residential about emotions.

[Nick G]

Commercial is fascinating because of the local business knowledge required to truly be able to ascertain whether a site is valuable or not. It seems like if you can figure through that you'll be solid. The guys I know who do well at it are sharp.

[DaveW]

Commercial is fascinating because of the local business knowledge required to truly be able to ascertain whether a site is valuable or not. It seems like if you can figure through that you'll be solid. The guys I know who do well at it are sharp.

I'm sure you could handle it.