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  1. #11
    Join Date
    Apr 2005


    Quote Originally Posted by ScottSI View Post
    Didn't know I was on my drug dealing or corporate corruption forms sorry, thought I was on a property investment form.

    If I had listened to 1/2 the posters on this forum when I regularly visited here, I would still be waiting to get house 3 or 4 in a nice area in Auckland.

    Money is money and you can make it the owning rentals in rough areas contrary to what some people post heremail (as myself and my property investor friends have). The purpose of investment is to make money (retirement funds, cover life costs, become financiallyfree etc).

    And I wonder why I hardly ever visit PT anymore.
    I wasn't having a go at you.
    just the idea that there are no ethical considerations in making money.

    Anyway, the op is getting into a new game at a time when the economic and political forces are not as favorable as in the recent past.
    So its best not the oversell the possibility of large capital gain driven wealth.

  2. #12


    Thanks for the comments so far guys. It seems to me that there are plenty of different opinions some of which appear to relate to risk aversion?

    The current climate is of concern to me but there isn't a massive capital investment in this property, We're looking less than 200k. So we could be a bit more insulated from the affects.

    Quote Originally Posted by GLin View Post
    Say you make $100/week after mortgage and expenses.

    That's $5200 a year if it's fully tenanted.

    How long do you have to save for the next deposit?

    Also what happens if you do end up with a trashy tenant and you need to renovate the property? Or that tenants are rough and you need to repaint/recarpet every 5 years, and replace kitchen and bathroom every 10 years? Then the cashflow is not so great then...

    If you put 0 to 10 scale, 10 being the best suburb/street, and 0 the worst areas you don't even want to step out of your car, I recommend 4 to 6 areas to invest.

    Which city that's another topic.
    Yeah you can't count on the tenant, even if the current one is alright. If was to put the area on your scale I would say about a 3. The area is a known gang hub but it is littered with good people that just can't afford better areas.

    I've lived here in Rotorua most of my life and the gang areas have always been gang areas. Some of the areas around it are coming up but there has always been blips in the centres of OK neighbourhoods which appear to be insulted from positive social change. I don't see that changing within the next 5 years.

    Based on my projections we could be debt free on this property within 3 years just because its cheap. That would be throwing everything into it and after that we would look at passing it on, hopefully around the same price, and invest in something for ourselves.

    My theory is less if we buy at the lower end we loose less if prices dropped but don't make as much if prices went up.

  3. #13
    Join Date
    Oct 2015


    Quote Originally Posted by ScottSI View Post
    Didn't know I was on my drug dealing or corporate corruption forms sorry, thought I was on a property investment form.
    Don't mind him Scott. McDuck seems lost between monkeys he talk about a lot and the grass he smokes to make sense

  4. #14


    Hi Scott

    What is the reason for moving away from residential and towards commercial? Better cash flow, less maintenance?
    If you were starting now, would you use the same strategy you did previously?

    Quote Originally Posted by ScottSI View Post
    Money is money. I have made millions from rough area properties, seen 80 to 305% gains in less than 10 years in Dunedin & Christchurch, and 70 to 410% increases in Hawkes Bay since investing there at the end of 2012. This is cold hard cash too as have sold over half my rentals now as moving to commercial investments, just 33 left to sell!

    And best of all I made cash flow, left work in 2011, and the tenants paid for it all!

    Rough areas are not for the faint hearted though I will say! DIY skills help (but I know people who use contractors) keep your costs down and rent arrears & trashed houses part of life.

  5. #15
    Join Date
    Apr 2005


    Quote Originally Posted by AlFa View Post
    Don't mind him Scott. McDuck seems lost between monkeys he talk about a lot and the grass he smokes to make sense


    Well, I can't come back from your well reasoned and factual reply.

    Well done!

    Have a banana.

  6. #16


    As a South Auckland investor / property manager and also having looked at investing into cashflow areas within the smaller regional centres, "bad areas" are generally quite subjective. For example, the bad streets of Rotorua have 3-4x the rate of tenant incidents when compared with the bad streets within Papatoetoe, and the bad areas of Dunedin and Invercargill are generally not so bad at all.

    Speak to a local property manager for some specific advice.
    Pukeko Rental Managers (South Auckland)
    If the tenant doesn't pay the rent we will!

  7. #17


    I have one near Mangere town centre in a Close where about half the houses are HNZ, and have great tenants. I bought it for the same reasons you are considering a poorer area - limitied capital.
    The return is higher than on my other much more expensive house in Ellerslie. Mangere centre as a bad rep, but as well as the thieving Neanderthals there are proud, employed people who keep their properties tidy. I wouldn't want to live there, but as an investment it is turning out well.

  8. #18


    It depends on the 'rough area' and what city you are buying in. I have bought in a rougher area in West Auckland and you need a really good property manager or to be prepared for extra hassles if you do it yourself. We have to be more selective re tenants so it can take longer to fill the property sometimes - better vacant than letting someone in there that might cause problems. Might be more rent arrears if people are on a low income unless WINZ is paying the bill. Haven't had any major issues though - just a tenant who obviously had mental health issues who got arrested a few times and started causing some problems so we just released him from his lease. And the property has doubled in value in five years. In fact Clendon in Auckland has got the same capital gains in the last ten years as Remuera if you check out the link below.


  9. #19


    Sure there is a free lunch. Profits were made by speculators and others in a recent period as were losses in other periods.


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