Investment options

[JABlog]

What will be the best strategy to get good yields in good locations. Dunedin, Wanganui and Rotorua are some of areas I am looking at.
Auckland has very low yields so looking at around 7% yields.
For those that invest outside of the city , how are you finding the whole experience?
Obviously it will be more expensive to maintain being out of town, so the yields will be lower after purchase.

I have enough deposit and double that amount in equity.


Other option is to buy a sub dividable property in say Otara and add another dwelling to improve yields.

[Don't believe the Hype]

There’s a listing in cannons creek that I’d take a look at 3x3br units on 1150m2 at 161-165 Bedford st. subdividable allowing at least one house in back yard. Relatively flat with good services access. offers over $620k - in all likelihood it will go for $650k+

Current rent from memory is $830/wk a yield of 6.6 gross, in all reality the rent could immediately be increased to $300/wk each irrespective of the internal condition delivering high 7 yield and with internal paint, carpet, heat pumps and insulation an investment of $10k/unit rent could be easily $380/wk 8.7 gross or at a pinch $400/wk a yield over 9% with equity potential by developing the backyard.

[elguapo]

Current rent from memory is $830/wk a yield of 6.6 gross, in all reality the rent could immediately be increased to $300/wk each irrespective of the internal condition delivering high 7 yield

Why has the current owner not already done this?

[Don't believe the Hype]

It’s an interesting situation, rents have risen fast and I’d guess many LL’s have not noticed the increase or like in a number of my tenancies we’re raised rents $20/wk the last few years but market rent has risen $100. We could if we needed to put the rent to market level but I think increases of that much put too much strain on existing tenants.

The type of tenant is changing in the area. By taking vacant possession you can advertise at the new level and get tenants that can afford the price.

My most recent new tenancy in the next street 2months back was at $380/wk for a similar unit with the addition of insulation and a heat pump and new carpet.

[Don't believe the Hype]

Actually - just checked my records, the rent on the most recent unit was $395/wk.

[sidinz]

If you go for Rotorua, there's a woman in Graeme's FB group who has just started offering tailored property management. So she'll do just the inspections if you want to manage everything else yourself.

[JABlog]

Thanks Sid
Have you invested there , how are you finding it ?

Are you actively buying now ?

[Nick G]

Hi JABlog, it's doable but you want to be careful. If you're going to buy an investment property it may as well be a good one.

I've owned in Rotorua and did fine, bought while in Japan. Good property management is essential.

I run a licensed investment property buyers agency for helping folks buy. Most of our clients are out of town investors, or new at property. If that kind of help would be of interest please shoot me a PM. We cover several markets.

[Don't believe the Hype]

The Porirua property is under offer - we bought it.

Nicks outfit iFindproperty is a great place to start - we used them when we were outside NZ to purchase property so well worth taking a look if you're not in the city/town you're planning to buy.

[elguapo]

The Porirua property is under offer - we bought it.
.

Never let it be said you don't put your money where your mouth is.

[Don't believe the Hype]

Right - When we looked at the numbers they made great sense. I had ago at that level expecting someone would got far higher driving yields down as they’ve done over the past 24 months.

This is one they didn’t.

one unit will be taken with vacant possession, it will be tidied up and rented for $380-$395/wk. taking the yield to 7.8%

the rear lot subdivided at a cost of $40k (one lot) or $65k if we can get 2 lots... sections around this location sell for $140-$150k so if selling was the plan one lot will nett $100k, two lots $215k meaning the total site yield increases to 11.3%gross and with a rent increase of $ 30 to about $30 below market in one of the other units the yield increases to 11.6%(at market 12%)

There’s a bit of work that get to 12% and it might take a year but worth the effort I think.