• Login:
Welcome, Register Here
follow PropertyTalk on facebook follow PropertyTalk on twitter Newsletter follow PropertyTalk on LinkedIn follow PropertyTalk on facebook
Page 1 of 5 1 2 3 ... LastLast
Results 1 to 10 of 43
  1. #1

    Default South Auckland vs Hamilton

    Hi All

    I am very keen to start investing in residential investment property - I currently only have a main home, but have equity in it that I can borrow against for an investment.

    I am looking to initially use a buy and hold strategy with my ultimate port folio being a mixture of cash flow and capital growth properties (in order to mitigate future (potential) solvency risk while at the same time obtaining long term (15 year time frame) capital growth. I may trade later, but that will only be to assist with the recycling of a deposit.

    I want to start with a cash flow property (6-7% net yields) but still but in an area with moderate capital growth (doesn't have to be stellar, but can't be flat lining growth). I realise that obtaining this type of net yield range will require a purchase below market value together with subsequent value add (e.g. extra rooms, sleep out etc.) I can afford up to around a 700k purchase price (equity plus debt).

    I live in Pukekohe, hence my two main areas under consideration are Hamilton and South Auckland. I am wondering if anyone had some general thoughts on these two investment areas in terms of a comparative analysis and given my above stated investment objectives.

    Thanks again everyone.

    Nathan

  2. #2
    Join Date
    Apr 2004
    Location
    Auckland
    Posts
    1,908

    Default

    It is usually easiest to get to know your local area well.
    Driving around viewing houses can be tedious and time consuming.
    To get a good buy it can be more productive with face-to-face talking rather than wasting hours on the internet.

    Are you going to renovate a do-up yourself?
    How much time do you have for commuting?
    The three most harmful addictions are heroin, carbohydrates and a monthly salary - Fred Wilson.

  3. #3

    Default

    6-7% net = 8-9% gross? You're probably talking decent sized project such as subdividing off a section and selling or something else to increase yield. Best to look where you can quickly get around prospective properties and get a surveyor or builder out there quickly. If you can't find a good once after 3 months of giving it a real crack then expand? Be prepared to pay for people's time to come visit your potential deals. I pay my architect $100/hr for each property he visits to confirm my grand designs.
    Free online Property Investment Course from iFindProperty, a residential investment property agency.

  4. #4

    Default

    Hi PC - I agree with your first three points in principle. Problem is I line in Pukekohe (20 mins to South Auckland and 50 mins to Hamilton). Either way it will be a drive unless I invest in Pukekohe (which I don't want to as I feel it is a bit overvalued, may crash harder in a recession (due to lack of employment diversity and distance from Auckland proper) and some massive new subdivisions being developed (i.e. not really a scarcity of land supply) - by massive I mean subdivisions of 5,000 odd houses...

    In saying the above, I am willing to conduct face-to-face time during my sourcing phase (i.e. half a day per week minimum). I may renovate it myself (I have done it before to several houses (and was a house painter in a former life...).

    Question remains though, in comparing Hamilton to South Auckland what are the pros and cons...?

    Thanks
    Nathan

  5. #5

    Default

    Hi Nick G

    Thanks for your comment. The yield criteria obviously need to be tested in the current market, if they are unobtainable then I will drop them a little lower.

    To my question, however, if convenience is the most important factor then I take it you would recommend South Auckland over Hamilton - for me anyway, due to the proximity to where I am (Pukekohe)? I also take it that while capital growth for Hamilton will be good over the next 20 years, South Auckland's will be better?

  6. #6

    Default

    Haha I have no idea what capital growth will be like in 2 years let alone 20 and if you're looking to great those kinds of yields it doesn't really matter.

    My point is more that you should pick the area where you are easily able to operate and try that.
    Free online Property Investment Course from iFindProperty, a residential investment property agency.

  7. #7

    Default

    Quote Originally Posted by Nick G View Post
    Haha I have no idea what capital growth will be like in 2 years let alone 20 and if you're looking to great those kinds of yields it doesn't really matter.

    My point is more that you should pick the area where you are easily able to operate and try that.
    Hmm I disagree on some of that Nick. Capital growth does indeed matter irrespective of your obtained yields - capital growth on an asset is the fundamental driver of long term wealth creation from property investment - good yields assist with wealth creation and they keep you solvent (which is vital), but not as important to creating wealth. Future capital growth trends may be difficult to predict, but they should be taken into account in my view so long as you are aware of the limitations of such an analyses. I guess that's where I disagree with the likes of Orion and others on these forums who take a yield-centric view to property investment.

    What I was trying to get from this thread was given historical data and given potential future trends (i.e. land supply/scarcity, population growth, forward demand curves, employment diversity etc etc) how do South Auckland and Hamilton compare.

    p.s. I agree with your tip around investing in a close geographical location to where you live due to convenience and practical scouting issues - thanks.

  8. #8
    Join Date
    Jun 2004
    Posts
    10,404

    Default

    Quote Originally Posted by Natetrade View Post
    What I was trying to get from this thread was given historical data and given potential future trends (i.e. land supply/scarcity, population growth, forward demand curves, employment diversity etc etc) how do South Auckland and Hamilton compare.
    I await, with interest, what peoples guess's will be, because that is all they can be.
    The past is no predictor of the future.

  9. #9
    Join Date
    Aug 2014
    Location
    Christchurch
    Posts
    40

    Default

    [QUOTE=Natetrade;428291]Hmm I disagree on some of that Nick. Capital growth does indeed matter irrespective of your obtained yields - capital growth on an asset is the fundamental driver of long term wealth creation from property investment - good yields assist with wealth creation and they keep you solvent (which is vital), but not as important to creating wealth.

    I am wondering how you can consider solvency to be vital yet wealth creation to be more important. No wealth created if you are insolvent. Correct me if I am wrong but my guess is that you perhaps weren’t investing at any of the several bust cycles over past 30 years? For me, Lessons learnt then still hurt years later! The bad times taught me that cashflow is indeed king.

  10. #10

    Default

    I'm confused, you're talking 7% net yields, what's that, 8.5% gross? You're only going to get it if you develop it yourself, which is going to add a TON of equity and cashflow to your bottom line. If you're adding 25% to the value of your asset or getting something for .70c on the dollar because of a subdivision or something then the 20 year growth projection is irrelevant because you'll be wealthy long before that.

    Quote Originally Posted by Natetrade View Post
    Hmm I disagree on some of that Nick. Capital growth does indeed matter irrespective of your obtained yields - capital growth on an asset is the fundamental driver of long term wealth creation from property investment - good yields assist with wealth creation and they keep you solvent (which is vital), but not as important to creating wealth. Future capital growth trends may be difficult to predict, but they should be taken into account in my view so long as you are aware of the limitations of such an analyses. I guess that's where I disagree with the likes of Orion and others on these forums who take a yield-centric view to property investment.

    What I was trying to get from this thread was given historical data and given potential future trends (i.e. land supply/scarcity, population growth, forward demand curves, employment diversity etc etc) how do South Auckland and Hamilton compare.

    p.s. I agree with your tip around investing in a close geographical location to where you live due to convenience and practical scouting issues - thanks.
    Free online Property Investment Course from iFindProperty, a residential investment property agency.


 

Thread Information

Users Browsing this Thread

There are currently 1 users browsing this thread. (0 members and 1 guests)

Similar Threads

  1. Auckland Manurewa South
    By planD in forum Property Investment (NZ)
    Replies: 4
    Last Post: 17-02-2017, 11:51 AM
  2. South and West Auckland
    By Bluecoat in forum Property Improvements (NZ)
    Replies: 3
    Last Post: 13-04-2016, 02:26 PM
  3. South Auckland Group: South Auckland Housing Market Update with Don Ha
    By Auckland PIA in forum Property Investor Associations (NZ)
    Replies: 11
    Last Post: 08-02-2015, 08:37 PM
  4. Auckland PIA South Group: South Auckland Market Update and the Right Mindset
    By Auckland PIA in forum Property Investor Associations (NZ)
    Replies: 0
    Last Post: 14-10-2011, 11:51 AM
  5. South Auckland Agents
    By sarahk in forum Property Investment (NZ)
    Replies: 9
    Last Post: 22-04-2011, 10:12 AM
  6. South Auckland
    By DRB007 in forum Property Investment (NZ)
    Replies: 5
    Last Post: 21-02-2011, 11:26 PM
  7. South Auckland update from Don Ha
    By Cannon in forum General (NZ)
    Replies: 5
    Last Post: 17-04-2010, 12:57 AM
  8. Tradesmen in South Auckland
    By shahil.nazia in forum Property Investment (NZ)
    Replies: 3
    Last Post: 22-12-2006, 11:50 AM
  9. Wtd: valuer in South Auckland
    By whitt in forum Property Investment (NZ)
    Replies: 4
    Last Post: 14-08-2006, 04:29 PM
  10. Playing with Words
    By muppet in forum General (NZ)
    Replies: 1
    Last Post: 01-12-2003, 12:17 AM

Tags for this Thread

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •