Greetings from the new guy. Auckland, New Zealand

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Greetings from the new guy. Auckland, New Zealand

Tristan Young
Auckland, NZ · Member since 2018 · 2 posts · 0 votes

Hello from New Zealand!

My wife and I, both in our early 30s, are excited to be looking at a future in investing property. We have yet to buy our first home, so will be searching for a both a property to live in and one with potential for helping us to buy more. We will be focusing on property rehab and buy to rent.

Funnily enough, it was a review search on a get-rich property seminar (that had a few scammy elements) that made me stumble across BP. Thanks Legacy Education! If anyone wants to know about our experience with them, give me a bell.

The coming months for us will all be about research, and then more research. We have a lot to learn, but it looks like BP is one of the best places for the knowledge needed. We also want to give back, documenting our successes and lessons learned over time which will hopefully help as waypoints for those starting off, particularly in the New Zealand market. Two things I find interesting here, one is the caveats with using Kiwisaver (similar to 401(k) plan in US) for first home buying, the other is the skyrocketing Auckland property market. While both used to scare me, I'm confident they can be used well if the cards are played right.

Happy to be joining the community, Kia kaha.

Tristan

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Dean Letfus
Specialist · Memphis, TN · Member since 2012 · 1k+ posts · 1k+ votes
7y

@Diogo Alves, genuine positive cashflow in Auckland is gone. Yes occasionally you can find something with a twist that might break even but generally it will be illegal in some way or unsustainable.

However other parts of NZ are definitely do-able. However none of them will appreciate as fast as Auckland or Hamilton IMHO.

I invest in Auckland negatively geared because real wealth is created through appreciation not cashflow. I use the US to enable me to hold in NZ. So yes I would invest in Auckland and I have and I do. It's the best market in the world. It's just very expensive now.

For lower risk, to learn the ropes and make mistakes that won't kill you the US is a perfect market.  Then you use the USA to fund NZ if that's your goal.

Seriously the USA is like kindergarten compared with NZ, making money is so easy.  But it's hard work to make a lot of money because you need so many properties.

But I've been at this game a good long time now and have taken enormous risks and executed a huge variety of aggressive strategies. So i can find opportunity anywhere I believe.  But it ain't all easy. I've been bankrupt, lost nearly 10 mil overnight, lost my businesses and let a lot of friends down thanks to real estate also. But those lessons enabled me to do what I do now, which is whatever I want!   :-).

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  • Aaron K.
    Specialist · Riverside, CA · Member since 2015 · 6k+ posts · 3k+ votes
    8y

    Are you planning to flip or buy and hold, from my limited understanding Auckland can be rough for the latter.  Also are you considering other cities in your country or just Auckland?

    0Reply
  • Hadar OrkibiPro Member
    Rental Property Investor · USA / NZ · Member since 2016 · 1k+ posts · 812 votes
    8y

    @Tristan Young AND @Aaron K.

    If you are looking to buy an investment property, then Auckland is the #1 place on NZ. 

    It is the economic hub after all. if the precises are challenging try Hamilton, Tauranga and Wellington. i always focused on multiple income properties like Block of flats / MFR , Home and incomes etc. these are much better to support the loan payment then single houses. or find a value add opportunity where you can add a bedroom to 2 bedroom flat etc.


    Any specific question?

    0Reply
  • Aaron K.
    Specialist · Riverside, CA · Member since 2015 · 6k+ posts · 3k+ votes
    8y

    @Hadar Orkibi I have always been curious about the NZ market, but have heard prices in Auckland can be crazy (similar to the bay area in California) what are your thoughts on cities like Rotorua?

    0Reply
  • Hadar OrkibiPro Member
    Rental Property Investor · USA / NZ · Member since 2016 · 1k+ posts · 812 votes
    8y

    Rotorua is lower demographic, you need to know where to buy as some areas better then others. growth is OK but nothing special.

    @Dean Letfus know more about Rotorua ten me. 

    anyway, why would you want to invest there..?

    0Reply
  • Dean Letfus
    Specialist · Memphis, TN · Member since 2012 · 1k+ posts · 1k+ votes
    8y

    @Aaron K., some smaller towns are OK. Unlike America most towns are easy enough to manage. The thing with NZ is that most small or rural areas only boom every second or third cycle. Rotorua for example has gone crazy in the last 18 months.  We have owned a block of units there for nearly 20 years and this is the first boom in that time.  So areas like that are not a smart bet compared with more urban areas. As Hadar has said,  Hamilton or Wellington are a better bet.  You also have tenant issues in areas with high unemployment and high maori population. Rotorua has both! 

    0Reply
  • Tristan Young
    OP
    Auckland, NZ · Member since 2018 · 2 posts · 0 votes
    8y

    I would consider Auckland prime for flipping (2nd day and I'm giving opinions already). I think I would be hard pressed to generate cash flow with buy and hold, within my current financial limits. I will be looking at Hamilton and Tauranga, potentially Christchurch . 

    @Hadar Orkibi and @Aaron K., what is a good measure to use for growth in an area?

    0Reply
  • Dean Letfus
    Specialist · Memphis, TN · Member since 2012 · 1k+ posts · 1k+ votes
    8y

    @Tristan Young, Auckland has opportunities still. People believe the media and decide Auckland is unaffordable.  I help lots of people into their first home in Auckland and they are always amazed at areas that are still affordable. Especially with home and incomes you can find them in areas I like such as Papakura that have good cashflow. Plus they double in value every 8 to 10 years without fail!

    Auckland is far trickier for flipping actually.  It bankrupted me when the GFC hit.  And that's the risk in Auckland. The $$ are so big that a left field event can be catastrophic.

    Oh and be VERY CAREFUL in CHCH. I wouldn't touch it with a barge pole.  The crap repairs post earthquake plus the lack of restoration make it high risk. You can't get good tenants as the workers have all left.  It's VERY, VERY tricky market. Should be bottom of your list.  Easiest money is to look at the edges of Hamilton where the development is moving and buy in those areas. Still cheap, they cashflow and they are likely to outstrip all other areas for growth.

    0Reply
  • Diogo Alves
    Rental Property Investor · Auckland, New Zealand · Member since 2019 · 31 posts · 21 votes
    7y

    @Dean Letfus -- we talked about how investing the US is far better than NZ, but your comment above (a year ago) about finding both cashflow and appreciation in areas like Papakura intrigued me. Are deals like that still around? Has the path of progress pushed to a different direction in Auckland? Lastly, if you do find even minimal cash flow in Auckland, do you have appetite to invest here for the cash flow & appreciation, or would you still go for cash flow properties in TN? 

    0Reply
  • Dean Letfus
    Specialist · Memphis, TN · Member since 2012 · 1k+ posts · 1k+ votes
    7y

    @Diogo Alves, genuine positive cashflow in Auckland is gone. Yes occasionally you can find something with a twist that might break even but generally it will be illegal in some way or unsustainable.

    However other parts of NZ are definitely do-able. However none of them will appreciate as fast as Auckland or Hamilton IMHO.

    I invest in Auckland negatively geared because real wealth is created through appreciation not cashflow. I use the US to enable me to hold in NZ. So yes I would invest in Auckland and I have and I do. It's the best market in the world. It's just very expensive now.

    For lower risk, to learn the ropes and make mistakes that won't kill you the US is a perfect market.  Then you use the USA to fund NZ if that's your goal.

    Seriously the USA is like kindergarten compared with NZ, making money is so easy.  But it's hard work to make a lot of money because you need so many properties.

    But I've been at this game a good long time now and have taken enormous risks and executed a huge variety of aggressive strategies. So i can find opportunity anywhere I believe.  But it ain't all easy. I've been bankrupt, lost nearly 10 mil overnight, lost my businesses and let a lot of friends down thanks to real estate also. But those lessons enabled me to do what I do now, which is whatever I want!   :-).

    1Reply
  • Diogo Alves
    Rental Property Investor · Auckland, New Zealand · Member since 2019 · 31 posts · 21 votes
    7y

    @Dean Letfus -- thanks! Always great insights! 

    0Reply
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