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  1. #1

    Default Indexing to a regional market

    Hi fellow investors,

    I have a conundrum that i have been mulling over in the last few months, and thought i'd reach out for some objective advice, as i am probably a bit emotionally invested.

    we had 2 rentals on top of our own home in wellington. we've recently sold one of our rentals to try and rationalise our portfolio, as we felt with insurance the way it is headed, and a few other things, having all our eggs in wellington was a bit of a risk. this has allowed us to pay off the mortgage on our own house. We now have a whole bunch of equity and some cash, and i feel like we need to put it to work.

    in the next 3 years we want to jump on our sailboat and travel for about ten years, after which we want to semi-retire on a lifestyle block in northland - say whangarei or kerikeri.

    i personally think that those parts of northland are a bit of an undiscovered gem, and am worried that if they go on a bit of a bull run relative to the rest of NZ, my buying power will be diminished - similar to say queenstown or wanaka say now compared to 15 years ago. i'm seeing some signs that it is already happening up there. wondering if just buying something up there is a good way to index ourselves with that market to manage that risk (appreciating it could go wither way)

    now we are considering three options:
    1. invest further in wellington (or the lower north island) - a market that we are familiar with, and i believe there is still capital growth to be had. after we finish sailing around the world we sell up in wellington and buy whatever we want in northland
    2. buy our dream property in northland now (which we havent found yet). i imagine that any little income from a lifestyle property wont be enough to cover the mortgage, so this will be a cost over the next 10 years.
    3. just buy any random investment property up there for which the numbers make sense, to index ourselves to that market, and then rationalise and buy our dream lifestyle block when we return


    i dont know that there is one correct answer to this, but appreciate your thoughts. we are enjoying being mortgage free, and would ideally like to be able to be (more or less) mortgage free when we come back. (but i also feel its a bit of a waste not havinga mortgage - it means my money isnt working ).

    Cheers,
    Nick

  2. #2
    Join Date
    Apr 2004
    Location
    Auckland
    Posts
    1,931

    Default

    Buy plot of land. Lease it to a farmer.
    10yrs later - sell it or build on it.
    Can you still make an income whilst traveling? Any good at writing travel blog/guide?
    The three most harmful addictions are heroin, carbohydrates and a monthly salary - Fred Wilson.

  3. #3
    Join Date
    Sep 2004
    Location
    Hastings
    Posts
    15,105

    Default Don't Wait on the North

    Kerikeri has already gone mad and the infrastructure is not coping. Especially the roads. (I have a fried who's lived there for years)
    Want a great looking concrete swimming pool in Hawke's Bay? Designer Pools will do the job for you!


 

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