Investing in Auckland

[BlueSky]

Had an interesting chat with a friend. She is downsizing If you had 700K in cash , what will be your strategy - location, type/number of properties.
Ideally, she would like an income to replace her current salary of 75K.

[Nick G]

What's more important, the income or the location. Auckland is largely cashflow neutral at best unless you do projects. I'd be looking bigger deals, multi income or commercial.

I know you're not looking for a sales pitch but we'd be able to get her set up with a portfolio that can deliver more than her income.

[DaveW]

Had an interesting chat with a friend. She is downsizing If you had 700K in cash , what will be your strategy - location, type/number of properties.
Ideally, she would like an income to replace her current salary of 75K.

One commercial property would be enough to surpass that goal.

But when I say one commercial property it would be a block consisting of 2 or more tenanted units, so you split your risk.

I would also go for a property that has up-side in the rents. There are as many ways to achieve this as there are number of opportunities available. Someone with experience can help you source this kind of property.

Replacing an income of $75k would not be difficult. With a $700k deposit one could buy a commercial property with a value of up to $2M using bank finance. mortgage payments on this hypothetical example would be approx 5.5% of $1.3M = $71,500 pa interest-only. So to achieve a $75k + $71,5k = $146.5K net rental is a return of 7.3%. Very achievable, and can go higher the more ambitious you are. That's why I say one property is enough, but work it hard.

Hope that helps. Feel free to message me (my website is not up yet