Buying a property leased to Housing NZ (HNZ ) : Pros & Cons

[Randy]

Hi everyone,

I’m brand new to the forum as well property investment arena, so apologies in advance if I break protocol when posting in the forum.
I was wondering whether anyone could share their experiences in

1. Buying a property that was leased to HNZ
2. Dealing with HNZ throughout the lease period
3. Pros & especially the cons/horror stories
4. What to enquire, check when engaging with real estate agents selling such houses
5. The criteria to consider, if I’m looking at buying a such house
6. Any other general tips , hints, advises that you would spare to a newbie
7. What would be the appropriate price range/CV of the HNZ leased property/ lease period if I’m to build equity on the property with the intention of buying a more desirable investment property later?
8. Areas I’m considering at the moment to buy such a property are Massey, Papatoetoe, Manurewa, Mangere, Pukekohe etc, any other areas that you would suggest ?

I’m planning on entering the property investment market after working 2 jobs for past 4 years in order to pay off my mortgage/build equity on my current property while supporting a family of 4 on a solo income, so needless to say, my budget is fairly limited, so I have to do my best in terms of due diligence.

I tried to find similar information in the forum, but was unable. So any advise, information is most welcome!

Thank you very much,

Randy

[Don't believe the Hype]

HNZ will charge you as much, probably more than a professional PM to manage the property, they’ll do less.

HNZ will rarely inspect the property which may cause you issues with any future insurance claim especially for meth cover

HNZ WILL NOT remove tenants for any reason which may expose you to liability if you have a duty of care to neighbors.

Rents are heading up in most parts of the country - not sure what provisions are in your HNZ contract to ensure you get increases in line with market.

Read and understand the lease agreement with HNZ they are not standard.

[Nick G]

Don't do it. Poorly managed, lower than market rent, no control. Have yet to meet someone who was happy with the experience.

[Keys]

Something to think about. <<<< Click on the blue writing.

[artemis]

What they all said. Also it used to be normal for HNZ to repair any damage at the end of the lease period, but nothing for wear and tear. That is reasonable, except that some households can leave a surprising amount of wear and tear behind them.

On the plus side the rent gets paid to the owner regularly, whether the tenant pays or not.

[Don't believe the Hype]

I had to speak to a HNZ tenancy manager today about a common boundary we share. In passing he told me he managed 1000 tenancies. How well do you think he could look after your property even if he had the best intentions.

Keys and other PM's on the forum - how many tenancies do you think a PM can manage before they're getting too stretched to do a good job?

[sidinz]

I went into over 1000 HNZ properties a few years ago. Their repair and maintenance procedures are worse than lousy.
The only ones, IMO, that you should ever consider are over-60s units. The little old ladies in them keep them immaculately. Anything else, Run Forest, Run!

[Keys]

.....how many tenancies do you think a PM can manage before they're getting too stretched to do a good job?

Around 120

[Randy]

Hey ya experts :-)

Hope you had a wonderful Christmas and looking forward to an exciting new year ahead.

Thank you very much for your much valued feedback on the thread. my apologies for not getting back earlier as I was out of country. I did some further research and happy to report back I have taken the advise and am swiftly running away from houses/areas that has anything to do with HNZ.

Again Thanks..