I am Nervous, No I am Scared

[Don't believe the Hype]

I've heard about these things, but I've never seen one in the wild.

youre doing it wrong - I've got dozens of them.

[Nick G]

Foreigner speculation rampant in Porirua!

[Don't believe the Hype]

Foreigner speculation rampant in Porirua!

im local as bro aye!

[elguapo]

youre doing it wrong - I've got dozens of them.

I do wonder if you have the same definition of cash flow positive that I do. 100% finance and all costs covered by the income. They just do not exist outside distressed markets.

[TheLibrary]

but well priced apartments in good buildings still go very FAST, as the market is pretty well educated...

Off topic question, but what do you mean by "market is pretty well educated" - is that in relation to knowing which buildings are 'leaky', or just more knowledge around apartment titles, leasehold vs freehold etc.

[Anthonyacat]

I do wonder if you have the same definition of cash flow positive that I do. 100% finance and all costs covered by the income. They just do not exist outside distressed markets.

Uhh... I'm by no means a genius buyer, but I've never bought a property that didn't pay for itself at 100% finance. Interest, Rates, Insurance, and an allowance for maintenance - though I'll admit I've tended to underestimate maintenance, it's not significant in the big scheme. [EDIT: And PM fees at 7.5% + GST]

2012, $206k at $320pw - 3bed in Clendon Park, South Auckland
2013, $170k 3bed in Rotorua - I don't remember the exact rent; maybe $260pw? But it covered it all.
2014, $200k 3bed in Lower Hutt, $310pw
2017, $720k in Auckland CBD, $1,220pw ($770pw 3bed + $400pw studio + $60pw carpark)

Some of them have been pretty close, but I always use an interest rate slightly higher than market available. Used to be 7%, but recently I've dropped to 5.5% or 6% as I don't actually believe rates will go up significantly anytime soon.

[Don't believe the Hype]

I do wonder if you have the same definition of cash flow positive that I do. 100% finance and all costs covered by the income. They just do not exist outside distressed markets.

yep - same definition.

They're still there you just have to look.

A percect example in porirua lately 2x3br units in good condition sold for $350k.
Weekly rent $700 or $36.4k/yr
Rates roughly $3k
insurance roughly $2k
mortgage @ 6% $21k (int only)
property management $3.6k
maintenance $3k
cash flow positive $3.8k yr or $7.4k yr if you manage them yourself. This will more than cover principle repayments.

These units required no work, were insulated had new (ish) roof and recent(ish) external paint so the $3k annual maintenance is more than enough to cover big ticket items down the track.

The trademe advert doesn't read - cashflow positive at 100% finance they tend to read more along the lines of needs work, or renovators delight.

You're probably unlikely to get them in the best suburbs in the major cities but you certainly can get them in the Wellington region. I think Orion on this forum is still managing to buy CF+ properties up in the Hawkes Bay area and I bet other investors around the country can point out other locations.

[elguapo]

You're probably unlikely to get them in the best suburbs in the major cities but you certainly can get them in the Wellington region.

This is something of an understatement. Your renting your properties out for more than the cost of ownership, so you are either dealing with a market where the renters have zero credit rating or ability to raise a deposit, or a market that everyone expects to drop in value.

[Don't believe the Hype]

This is something of an understatement. Your renting your properties out for more than the cost of ownership, so you are either dealing with a market where the renters have zero credit rating or ability to raise a deposit, or a market that everyone expects to drop in value.

Zero credit rating or ability to raise a deposit could be true but seem to have no issue financing big screen TV's, mag wheels and Nike Air Max shoes.

[fuzzlevalve]

Oh this guy quite funny

but the majority of property investors are after a quick buck. They want to buy a property now, it to jump up in value $100,000, and then to sell so that they can reduce their personal house loan, or buy a fancy car, boat , holiday etc. Paying tax on a property gain scares these investors.

I would guess that 65% of property investors have negative cashflow,

Most investors I know long term people. Flippers are no investors. And he guess 65%. 90% of investors I know are cash positive.

[mrsym0r]

youre doing it wrong - I've got dozens of them.

Let me guess : you didn't buy them in the last 3-4 years

[Don't believe the Hype]

Let me guess : you didn't buy them in the last 3-4 years

at least a dozen in the last 3-4 years. They're still cashflow positive at market rate now scroll up for the numbers.

[Wellington Broker]

This is something of an understatement. Your renting your properties out for more than the cost of ownership, so you are either dealing with a market where the renters have zero credit rating or ability to raise a deposit, or a market that everyone expects to drop in value.

Current market has some of the tightest credit conditions in the last 20 years so cashflow positive property is easy in Wellington

[Beano]

Let me guess : you didn't buy them in the last 3-4 years

In the last 4years would have brought 35 all cash flow positive ...weighted average 6.4pc after all costs except interest calculated on 100pc finance and taxation.
This is after capital expenditure needed to maintain income

[orion]

Uhh... I'm by no means a genius buyer, but I've never bought a property that didn't pay for itself at 100% finance. Interest, Rates, Insurance, and an allowance for maintenance - though I'll admit I've tended to underestimate maintenance, it's not significant in the big scheme. [EDIT: And PM fees at 7.5% + GST]

2012, $206k at $320pw - 3bed in Clendon Park, South Auckland
2013, $170k 3bed in Rotorua - I don't remember the exact rent; maybe $260pw? But it covered it all.
2014, $200k 3bed in Lower Hutt, $310pw
2017, $720k in Auckland CBD, $1,220pw ($770pw 3bed + $400pw studio + $60pw carpark)

Some of them have been pretty close, but I always use an interest rate slightly higher than market available. Used to be 7%, but recently I've dropped to 5.5% or 6% as I don't actually believe rates will go up significantly anytime soon.

That would only be on interest only though right?