Investment property in New Zealand

[nikolav]

Hey guys. I'm new to the forum. And to the market. I'm selling my property in Europe and expect to have about NZD 255 000. I'm currently renting in Auckland and I have now two choices. Either to buy a cheaper property to live in or buy investment property or properties in NZ. To be able to afford the repayments if buying a property to live in my top will be around $700K. I'm reluctant to do it as it will mean a big shock to the family - much worse area, house and school for the kids. Hence I'm considering buying investment property NZ wide.
So I need an advice. Given I'm located in Auckland (due to my job and experience there's no chance finding a work outside of Auckland) where will be the best place to look for a property. What are the places with the best return of investments in the country? Also, what are the areas where finding tenants are easy and can't expect big problems with them?
As I guess you can guess yourselves I'm pretty new to this. And very inexperienced. So any kind of advice will be highly appreciated.

Best regards,
Nick

[Natetrade]

Hey guys. I'm new to the forum. And to the market. I'm selling my property in Europe and expect to have about NZD 255 000. I'm currently renting in Auckland and I have now two choices. Either to buy a cheaper property to live in or buy investment property or properties in NZ. To be able to afford the repayments if buying a property to live in my top will be around $700K. I'm reluctant to do it as it will mean a big shock to the family - much worse area, house and school for the kids. Hence I'm considering buying investment property NZ wide.
So I need an advice. Given I'm located in Auckland (due to my job and experience there's no chance finding a work outside of Auckland) where will be the best place to look for a property. What are the places with the best return of investments in the country? Also, what are the areas where finding tenants are easy and can't expect big problems with them?
As I guess you can guess yourselves I'm pretty new to this. And very inexperienced. So any kind of advice will be highly appreciated.

Best regards,
Nick

If I was you I would rent in a more desirable area in Auckland and purchase an investment property in a lower social economic area but still Auckland (e.g. Otahuhu, Mangare Bridge, New Lynn etc.

That way you get to "live" in a nicer area but still stay on the Auckland property train. You should be cash flow neutral if you use all of your 255k as a deposit.

Natetrade

[donna]

Welcome to PropertyTalk.

I wouldn't rush into any decision before knowing more about property investment. Do lots of research starting with reading the discussions on PropertyTalk. Then ask questions - the users here know more than most so you'd be getting a lot of good info for free. The more you know the more you need to know but that's a good thing so you make an informed decision. Also get yourself a property tax accountant - if you register for GRA's upcoming webinar (banner will be online very soon) you'll get to suss them out - again for free. Plus there's Rosco - he's a user and you can read a lot of his posts on here which are very good.

cheers,

Donna

[artemis]

IMO not a good time to buy a rental. Current government is not friendly to residential property investment and getting less so with various additional costs coming fast. As Donna says, do the research and the sums.

[nikolav]

Thanks Donna & Artemis!
Yes, I realize I need to read and learn a lot now.


Hey Natetrade!
I guess cash flow neutral means that the rent will be equal to the mortgage payments?


And what about some other areas? I also consider Warkworth and Wellsford. I was also advised by a friend to consider Otara as a place with a higher capital gain at the moment. Others suggest to avoid it at all costs - for being a dangerous area with lots of gangs which will never leave the area. Your thoughts here?

Cheers,
Nick

[Natetrade]

Nikolav - agree with the above two posters. Obviously do your homework first, and factor that into your buying decision. But, if you want to live in Auckland for a while, I highly recommend owning property in Auckland (even if it's an investment property in a "cheaper" area). If you buy in the regions, you may find yourself never being able to get back into Auckland again...

Remember, you make your money when you buy.

[Nick G]

Hey Nick,

It's well worth starting out focusing on just an area to buy to live in. The reason being that if you want to look for your own home, or a rental, all different markets etc etc, you'll probably just wind up spinning around in circles. If you can't make home buying work, I'd do some solid study on property investment before even looking for a rental. One good "A-Z" book is The New Property Guide (should also be at your local library).

The first thing I would do is talk to a good broker. Usually I would say it doesn't matter where your broker lives, but since you're not from NZ it is probably better if someone sits down and goes through things with you in person. In Auckland are some good brokers at Mortgage Supply, one of NZ's top operators. I also think Squirrel run a tight ship. I'm happy to introduce if you like. There may be others in here who are in Auckland.

Once you know how much you can afford then look at areas. As others have said buying a run down place in a slightly less desirable area is a good strategy because you'll gain equity by improving the house and also as the area gentrifies.

All that said, "rentvesting" is a very common strategy. It's when you want to live in an area you can't (or don't wish to) buy in, usually for family reasons, however you keep a toe hold in the market by buying elsewhere.

Good luck.

Nick

[orion]

Hey guys. I'm new to the forum. And to the market. I'm selling my property in Europe and expect to have about NZD 255 000. I'm currently renting in Auckland and I have now two choices. Either to buy a cheaper property to live in or buy investment property or properties in NZ. To be able to afford the repayments if buying a property to live in my top will be around $700K. I'm reluctant to do it as it will mean a big shock to the family - much worse area, house and school for the kids. Hence I'm considering buying investment property NZ wide.
So I need an advice. Given I'm located in Auckland (due to my job and experience there's no chance finding a work outside of Auckland) where will be the best place to look for a property. What are the places with the best return of investments in the country? Also, what are the areas where finding tenants are easy and can't expect big problems with them?
As I guess you can guess yourselves I'm pretty new to this. And very inexperienced. So any kind of advice will be highly appreciated.

Best regards,
Nick

Best places I think to buy in with reasonable yields (as long as you buy well) would be Rotorua, Whakatane, Hakes Bay, Palmerston North, Feilding, Wainui in Wellington and maybe Invercargill in the South Island

[Natetrade]

Thanks Donna & Artemis!
Yes, I realize I need to read and learn a lot now.


Hey Natetrade!
I guess cash flow neutral means that the rent will be equal to the mortgage payments?


And what about some other areas? I also consider Warkworth and Wellsford. I was also advised by a friend to consider Otara as a place with a higher capital gain at the moment. Others suggest to avoid it at all costs - for being a dangerous area with lots of gangs which will never leave the area. Your thoughts here?

Cheers,
Nick

What ever you do don't live in Otara! Even as an investment area I would be careful - it's already had a decent capital growth but it's still dodgy as hell (I compare it to Manurewa which is much more gentrified). Warkworth is a long way out and you may suffer the same issues as Pukekohe (see threads on that elsewhere on this forum).

By cashflow neutral I mean rent will equal mortgage payments plus other expenses (e.g. rates, insurance etc). It's not really cashflow neutral (from an investment perspective) as you are providing a sizeable deposit.

[nikolav]

What ever you do don't live in Otara! Even as an investment area I would be careful - it's already had a decent capital growth but it's still dodgy as hell (I compare it to Manurewa which is much more gentrified). Warkworth is a long way out and you may suffer the same issues as Pukekohe (see threads on that elsewhere on this forum).

By cashflow neutral I mean rent will equal mortgage payments plus other expenses (e.g. rates, insurance etc). It's not really cashflow neutral (from an investment perspective) as you are providing a sizeable deposit.

Thanks, Natetrade!
I think I read almost everything about Pukekohe what I could find in the forum, but I guess I'm missing something. I couldn't find much regarding any issues with being too far. What do you mean? I could expect problems with finding tenants or what (regarding Warkworth)?