Procrastinator looking for advice

[mercutio13]

All - first time poster hoping for some advice.

I have a small property portfolio (1 townhouse rented, 1 carpark rented, 1 house -live in) all in Auckland with gearing of 27% (LVR) and unused borrowing capacity of around $650,000. The two rented properties are cash flow positive and the personal mortgage is not much. I have a share portfolio of around $700,000 with a LVR of around 26%, plus some cash. My wife and I have 1 child with another on the way, with a pretty income from my job.

So we have plenty of capacity but I have not taken much action.

Apart from buying our house to live in 3.5 years ago I have sat out the last property boom with my excuses and rationalisations being:
- having an "Aucklond-only" mentality, and
- saying Auckland price-to-income's are too high so I should focus on share market instead

I have managed to shed my Auckland only mentality and have started researching North Hamilton, New Plymouth and Palmerston North with a view to long-term rentals with perhaps future subdivision potential but I am still having problems committing.

I think my biggest problem is deciding what is a "good return" in the current market. I am probably being over demanding and hence ignoring opportunities that more experienced investors would be happy with, and get stuck in analyzing and analysis looking for a better deal.

Keen to get some experienced investors views: for a second tier city like New Plymouth (as an example) where we can expect low but positive population growth over the next 20 years and in a mid price point suburb what would be a reasonable year 1 gross yield?

I think I just need to confidence about that to get me underway.

[Nick G]

Howdy, perhaps we can help, www.ifindproperty.co.nz

We are set up to assist out of town buyers invest smartly.

I think it might take a long time to learn enough to buy with confidence otherwise - you're not the only one in that boat however.

Cheers

[Rosco]

My suggestion is going to be quite sad. You have waited through all the boom, why not wait a bit more. My strategy would be hope the market goes flat or down in the next 6 months to 2 years, and that there will be some desparate vendors coming onto the market. That should mean you can buy better and perhaps at a discount.

New Plymouth? Palmerston North? I’m not sure I would go for either, unless you are just trying to chase the last of the boom (too much of a gamble for me, and probably too late too).

I’d concentrate more on adding value (subdividable etc) and taking your time. Also developing a clear set of goals, and then strategy around how property can help you achieve this.

Good luck

Ross

[orion]

All - first time poster hoping for some advice.

I have a small property portfolio (1 townhouse rented, 1 carpark rented, 1 house -live in) all in Auckland with gearing of 27% (LVR) and unused borrowing capacity of around $650,000. The two rented properties are cash flow positive and the personal mortgage is not much. I have a share portfolio of around $700,000 with a LVR of around 26%, plus some cash. My wife and I have 1 child with another on the way, with a pretty income from my job.

So we have plenty of capacity but I have not taken much action.

Apart from buying our house to live in 3.5 years ago I have sat out the last property boom with my excuses and rationalisations being:
- having an "Aucklond-only" mentality, and
- saying Auckland price-to-income's are too high so I should focus on share market instead

I have managed to shed my Auckland only mentality and have started researching North Hamilton, New Plymouth and Palmerston North with a view to long-term rentals with perhaps future subdivision potential but I am still having problems committing.

I think my biggest problem is deciding what is a "good return" in the current market. I am probably being over demanding and hence ignoring opportunities that more experienced investors would be happy with, and get stuck in analyzing and analysis looking for a better deal.

Keen to get some experienced investors views: for a second tier city like New Plymouth (as an example) where we can expect low but positive population growth over the next 20 years and in a mid price point suburb what would be a reasonable year 1 gross yield?

I think I just need to confidence about that to get me underway.

A reasonable gross yield is 8%, anything higher in a good location even better if you can get it.
Not sure if you would get that in New Plymouth, but should be possible in Rotorua, Feilding, Palmerston North, maybe Wainui in Wgtn and Hawkes Bay.

[portofolio]

Better wait for couple of years, and still buy in AKL.

I have more conservative strategy. I enjoy a current 15.6% LVR with 6 PIs. Had not bought or built any PI since Jan 2016. When the market down, catching the falling knife would be more excited.