Mortgage Free and dreaming of a new adventure

[Lifeworkbalance]

Kia ora

We’re after some property investment strategies ideas that align with our lifestyle goals.

Here’s the dealio:
We own a 1bed Aklnd CBD apartment worth $550k with a $220k mortgage. This is where we live with our 6mth old baby. It is 65m2 and comes with a carpark. It has rented for $600pw in the past. I’ve just re-painted and carpeted so it’s looking very tidy. This apartment is in our personal names.

My wife is selling her overseas property. The profit from that is likely to clear our apartment mortgage.

We are older parents, 44&38 and would like to have another baby within the next 2 years. Our combined gross income is $195,000pa. My job is more transferable than my wife but she has the potential to earn more money than me in Auckland or any major city. I work in health, she’s in fashion.

We would like to leave Auckland (who wouldn’t when traffic’s bumper to bumper!) in the near future and raise our kid(s) in a more rural setting for the first 5 years of their lives. We are both keen cyclists, snowboarders and trampers and would love to introduce our babies to an outdoors lifestyle. We understand there will be salary sacrifice but like most parents on here, we are also aware that we don’t get this time with our kids back.

All options are on the table – leverage the mortgage free apartment and buy rentals, sell the apartment, buy a house and income in a quieter part of NZ and AirBnB the room(s) – we are open to all suggestions. I’m curious to know what any of you more seasoned investors would do?

Cheers

[JBM]

Personally I'd be selling the apartment and having a look around some locations in NZ ------- Christchurch very reasonable pricing for a major NZ city 550k would get you a tidy family home something like https://www.realestate.co.nz/3645562 (and that was just a quick 5min look and looking over the floorplan 4th bed could work as a room+bath AirBnb $60 per night etc) but like you say more rural so prob find something even cheap further out of Chch .. more rural setting . then any free capital could go into a reno job rental / Airbnb etc

Freehold title much safer investment IMHO

[Anthonyacat]

What a great first post. Dreams are wonderful, but can be a bit hard to tie down, and focus in one direction.

I'm presently considering long term options of leaving Auckland. This is not my forever city. But I am looking at so many different places it's almost impossible to progress. I like the Hawkes Bay, central Wellington could be nice, Nelson is attractive, and recently we're seriously looking at Invercargill. There, you can have a pretty rural setting within 10 minutes drive of the CBD. The whole area is flat as a pancake so very bike friendly. And only a couple hours drive to Queenstown for the mountains etc. It's a frontrunner for sure.

Our son will be 2 in March, and the time spent with him is worth so much more than money. We are seriously considering (well, I'm seriously considering, my wife is able to be convinced) taking several months off, buying a large motorhome, and touring the country to help us get a better idea where we want to be while having a hell of an adventure along the way. Although the accounting firm I operate is entirely mobile, so we wouldn't need to give up 100% of our income to do it; aware you may not be in such a fortunate position.

[Minz]

How about a rural income? Start with a small farm, prices aren’t that huge down south - maybe a JV with someone? You provide the land and they provide the rest especially if you are partially mobile. But please don’t tell anyone about Southland...that should remain a secret. And if you can’t quite face the deepest south, Otago has some great options. But, I would ditch the apartment, yield may be fine but I am not sure that your on-going costs would be ideal or the security/ability to lever off its capital value into the future.

[JBM]

What a great first post. Dreams are wonderful, but can be a bit hard to tie down, and focus in one direction.

I'm presently considering long term options of leaving Auckland. This is not my forever city. But I am looking at so many different places it's almost impossible to progress. I like the Hawkes Bay, central Wellington could be nice, Nelson is attractive, and recently we're seriously looking at Invercargill. There, you can have a pretty rural setting within 10 minutes drive of the CBD. The whole area is flat as a pancake so very bike friendly. And only a couple hours drive to Queenstown for the mountains etc. It's a frontrunner for sure.

Our son will be 2 in March, and the time spent with him is worth so much more than money. We are seriously considering (well, I'm seriously considering, my wife is able to be convinced) taking several months off, buying a large motorhome, and touring the country to help us get a better idea where we want to be while having a hell of an adventure along the way. Although the accounting firm I operate is entirely mobile, so we wouldn't need to give up 100% of our income to do it; aware you may not be in such a fortunate position.

Yes you are certainly in a fortunate position and would be a great move to tour the country while your son is still out of school .. so many great locations in NZ surely your wife will fall in love with one and can secure a family home for a great price.. for me it was central otago.. grew up in southland so not a big move

[PC]

Plenty of very nice suburbs around Auckland center.
Perhaps just buy a standalone house on a section 600m2+ out of the city center?
Better family lifestyle than stuck in an apartment block.
If you work in the city center - perhaps something handy to a train station.
Moving to the sticks might just cause you all to suffer a slow death of boredom!

Keep the apartment as a rental. Up the mortgage as high as you can - 100% - interest only.
Use that and other money as deposit on new house for yourselves.
Talk to an accountant.
Repay your own mortgage as fast as possible. Have more kids.

[OnTheMove]

New Plymouth FOR SURE. Gorgeous place now, has all the acitivities you like and housing is not insane yet. Just keep in mind land holds value, buildings dont. So the advice above about selling up and buying a house isnt bad. I remember only 15 years ago you couldnt sell an Auck aprartment you had to give them away. I see that returning once Auckland spreads out and people get back to living in proper homes (3bedders not 6 bed mansions either). Building train lines would help accomodate this. But plenty of people commute from outer greater Auckland on our crappy public transport already.

Whilst a crash is possible at least land will retain most of its value and any loss will be regained over a decade. Outside that, living in a home has benefits like having a place for the kids to play, planting your own free food, lots of parking. Plenty of room to grow. Possibly room for your families to visit etc etc. Ive never owned an apartment IP or not and its for these reasons I wont. Small land townhouses would be my limit, at least separated by the minimum house to fence limits (3m?)

You can get a nice fairly new non leaky 3 bed in Whangaparao for $650k. You can also spend $10mill like anywhere else. But the area is a gorgeous place to live lifestyle wise. Shakespere gives you a lot of outdoor activities. Im a spear fisherman so I use to launch my boat off the beach and head out to little barrier etc. Some beaches are overloaded in summer but you can always find a quiet spot once you know where. Jetskis are a real issue they need to crack down on the 200m 5 knots law.

But if you can work out of Auckland I would move to New Plymouth at the drop of a hat. $600k would buy you a nice house in Fitzroy (the top suburb outside central) which is a nice surfing suburb. $450k will get you something decent.

You could move to Qld where you will get much better pay, free health insurance, free 10% super, new solid houses half the price of Auck, double brick so you wont have to worry about crappy Kiwi builders using this polystyrene cage sprayed on 1mm thick rendered Monolithic leaky homes.

But value for money, if you can handle the cold, Dunedin by far is the best bang for buck outdoor lifestyle wise. How many Auckland beaches to you bump into Sea Lions. $450k will by you a nice house in a good suburb (there really isnt many bad ones, only a few streets of 2 suburbs Im aware of)