Investor, Buy and Hold, Rehabs · Wellington, Wellington · Member since 2016 · 44 posts · 27 votes
Let's get everyone who is a New Zealand based Real Estate / Property Investor to reply here, so we can try and form a group to share ideas both for investing locally and abroad. I know there are many of you out there, so put your name here!
Hi Everyone, I'm so stoked to see kiwis using this website. I have a complete "newbie" query (as I am a complete newbie, unashamedly) with the way mortgage to rent ratios are in NZ, is my money better spent off shore?
I am completely uninterested in investing in a property that will actually cost me money every week as opposed to generate cashflow.
The U.S is looking like a better investment strategy comparatively. Also, has anyone invested in the UK?
What are your plans for investing? Do you want to be a passive or active investor? Why are you doing it? What outcomes do you need in your life from investing?
Once you have answers for these you can start to niche down to areas that will interest and support your plans and then you can start to decide if NZ or US or anywhere else is best for you. For example, you mentioned in your other post that you used to be keen on travel, so do you want to continue with that as that could decide some of your buying decisions as you may be able to incorporate travel into your property business?
Do you want to do properties up or buy them turn key? Hold them for long term income or do you want to build another business may be flipping, selling or trading?
Once you have a bit more definition to your needs we can hopefully point you to people here that have more speciality knowledge in those areas.
Will have a look, thanks. We also have some here already doing some US investing, @Dean Letfus@Hadar Orkibi could be a help if your looking at either NZ or US property as both have been actually doing it in both markets and have also spoken at Property Investor associations in NZ in the past. Also @Nick Gentle can help with NZ specific investing as he works in property finding here.
Hope those connections might help to build your knowledge base
@Kyle Elmer- Yes, Please take a look. There are many more investing in US than the names you mentioned. I am pretty comfortable at this moment with US and India investing. However I was trying to find connection for investors who are not so lucky with their investment and often difficult to approach.
@Jade Atkinson it depends on so many points so its hard to advise without knowing your personal situation. I Think you need to start with answering (for yourself) the points that @Kyle Elmer brought up. Yes, US better then Auckland for cash flow, but in most places its a trade-off for steady and strong capital growth. Auckland is Like LA, San Fran and London. there is no cash flow in these cities unless you buy commercial with 40% down or do things on the ground. ie, developing / building etc. which is not relevant to you and most investors.
As an example, if you buy Turn Key in the US and can buy at 10% or the "1% Rule" (its the same) then you can get these down south in Dunedin. Kyle can witness to that as that's what they do in NZ.
If you are buying in the US you want to buy in areas that heave good population and employment growth prospect for the next 10-20 years. Or/ And buy properties that you can buy well and add value too. so you get the cash flow and the equity. this is not easy to do if you are out of the country. ... but its possible if you have good team on the ground.
in general the market in the US is Red Hot at the moment, even more then Auckland at this stage.
I think that you need to think it through and ask more question, and answer Kyle's.
Also Here are the main 2-4 questions you need to answer first: can you advise how did you think to found purchases in the US? are you able to borrow there? or buying cash.?
are you better positioned to borrow in NZ? This is the starting point.
Thank you for the questions. I enjoy thinking hard about things like this.
I would enjoy being an active investor. I am only 30 and I have plenty of time to get stuck in and learn the intricacies of property investment. I'm not a fulfilled person unless I am learning.
I am interested in property investment because I have a business background. I enjoy being in charge of my days. I enjoy "business". Property investment is a new business for me to learn and eventually master in order to obtain financial security for my family. I fully appreciate that at such a time in the future when I am ready to start a family, property will allow me to have the freedom to do that in a way that I want. E.g travel the world with my kids to experience other cultures and crafts. It can allow me to be "hands off" if and when I need to be. It can also allow me to take care of the remaining two grandparents I have. My grandfather in particular has worked his entire life for myself and my mother and he still works like a MF, driving truck and trailers in Sydney. He'd give the shirt off his back if he saw someone in need and I am hell bent on giving him the best quality of life I can afford for the remainder of the time I have with him. No joke.
I "think" I am more attracted to buy, renovate, hold. I am also attracted to commercial, multi family properties and I also believe that they are what is best for communities moving forward i.e population growth, dwindling resource and cost of living. In saying that If I had an investor partner I believe could competently flip houses much in thanks to the fact that I am creative (graphic designer) and I love physical work. Also my father is a very capable "handy man" and my brother is a qualified roofer. I also have close ties to a medium sized civil company in Auckland and my grandfather can operate anything with an ignition (such as an excavator) which reduces the cost to renovate greatly. I just need to get started *forehead slap* I think that a balanced portfolio would include foreign property, even if it is managed for me.
Finding property in the US would require intimate knowledge of which I do not posses. However, I am enamoured with the idea of having foreign property and a "I think" I am comfortable with the concept of finding a capable property management company to oversee things.
I don't think I qualify for a loan in the US as I have no presence there at all. I would prefer to buy with cash but as I am brand new to property that is still a few years away.
I have a better chance of qualifying for a loan in NZ as after many years abroad I am using my credit card as a way to build good credit. Always, pay, on, time.
I'm quite excited that I have a family friend in my area whos family has been in property for generations. He has offered to let me tail him as he renovates and flips houses. He has also said that if I think I have found a "deal" he will do a walk through with me as he is a builder by trade and double check the numbers. I just had coffee with him so I am very excitable right now.
He explained to me that investors are looking to sell now that the LVR has changed. I may be able to get some excellent deals as they offload properties to free up capital for new ventures.
see what you can borrow first. you can email them them and feel free to mention my name.
if you don't have cash to buy now, forget the US market and consider the Auckland market.
It is a slower market now, with good opportunities, but still have Very good long term growth prospect, But not much cash-flow...
you will be lucky to brake even! considering you are 30 years old you have a lot of time, maybe 15 years until you start needing some cash-flow. (that's provided you are currently working) so investing in AKL is not bad idea. (Properties that brake even, overtime will cash-flow)
I suggests you fined out how much can you borrow, come back and let me know.
I don't expect to be able to borrow much this early in the game but in 12 months I will have built up an excellent credit record and be well on my way to a deposit. I have a meeting organised with an accredited financial advisor next week so i am interested to hear what his opinion is compared to the plan I am already instating.
@Hadar Orkibi ohhh yes. That is exactly who he is. The company sells new builds in "global cities". I'm keeping my appointment with him as it will probably be a very useful education for me.
The advice his company offers, is the opposite of any other investor I have spoken to. Everyone else talks about buy, renovate, sell or hold. His company sells "luxury" property off the plans for wealthy migrants and apparently anything else is "social housing" renting to the lowest of the low of society.
I'm going in there to compare my R&D and his "executive property strategies". I basically want to know how these companies work. How they turn profit off unsuspecting newbies. How these people stay in business?! I want to learn about "what to avoid".
What is that investor statistic? 95% give up after one property? Could it be that these investors trusted so called "industry professionals" to look after their best interests as opposed to learning a system from people who are actually winning at it?
I predicted this to be these type of advisors, or financial planer...
As mentioned they get paid some sort of commission from you buying the new build.
i hope you are not paying them for consultation, who are they?
You can do much better then this but it would take some work and learning the ins and outs.
this type of service is typically for uninformed, nonprofessional investors who just want to park some money and wait for capital gain and rent to grow over 10-30 years.
Thanks @Hadar Orkibi, I am definitely not paying for this appointment lol! They are called Positive Real Estate, originally from Australia. I'm just so curious. I was raised by an expert saleswoman so I see straight through the jargon and tactics. The year 1 "numbers" they showed on screen touted an annual + cashflow after claiming depreciation etc. Only by around $150. Unfortunately the info wasn't left on the screen long enough for me to cross examine. I haven't even begun to look into how likely positive cashflow is in NZ so I want to know how they get their numbers looking good.
Ok, so that's a negative cash flow without the depreciation then. Depreciation is an icing on a cake type thing and certainly, wouldnt be worth banking on having. The tax rules can be changed really quickly so to me that is negative cash flow. It also relates to your tax situation which is different to anyone else so who knows if that's going to be the situation for you, your financing package, etc etc.
Good for the education factor but definitely walk out and talk to your team of experts to confirm those details are right for you
All. They also offer mentoring etc etc . Some of the people behind it here in NZ are Okay and have knowledge. But like @Kyle Elmer mentioned it's not really a deal for the astute and professional investors....negative gearing with market value purchase is recepie for slow portfolio growth and average or bellow results.
Thanks for explaining, guys. I have actually offered to start doing some landscaping work for a local developer in exchange for his mentorship. I'm really looking forward to being right in the middle of it all.
And talk to APIA about joining. For a couple hundred bucks the amount of knowledge and training you'll get access to and the number of people whose brain you can pick will be huge. Shame your not down south here, you could come and join OPIA at nearly half the price ;-)
Or I have a job we just posted for a Jnr Property Manager which would have been a big education in the property business.
Oh bugger! I would have swooped on that job opportunity! I will join a NZ property investor site. I'm just a bit aghast at the fee. I am always getting a bit hung up on the "principal" of things like that. I'm so new at this I'm thinking "Is that really the fee they charge!?".
My wife and I live in New Plymouth and are looking at getting a rental down in Dunedin. @Kyle Elmer can you please let me know your take on the market down there at the moment?
I'm seeing some familiar names on this thread :) I'm based in South Canterbury and working FIFO in Aus at the moment. Would love to hear what kiwis are buying currently in the US.
Things are nice and steady in Dunedin at the moment. The sales stats just came out showing another small increase. I was at a building industry breakfast on Friday and most of the guys there were suggesting they are flat out and our management business trying to pin guys down to quoting repair work etc has been really tough of late so that seems to back that up.
The University roll is up again this year which has been the first year for a few so fingers crossed that's a good sign for the city as there has been a little bit of an oversupply of rentals in a few markets the last few years so that might suck up that excess supply. I also saw in the NZ Property mag recently that the building consent to immigration to area numbers for Dunners were showing a slight shortfall in building to numbers coming in so that would also back up those sales numbers rising. There are also signs that the new 2GP (new district plan) is about to be finalised after too many years and there is a bit of medium density stuff potentially in there subject to the consent rules so redevelopments might be on the cards?
The city does finally seem to be seeing some good traction from the Gigatown win and some project funding like the Heritage precinct that are seeing some really good Hitec start ups coming in to or staying in town from Uni so if that continues then some alternative jobs are coming in too.
As for rentals, this is still the oldest housing stock in the country so it is prime for buying under value doing improvements to it and increasing your values and to a lesser extent rents. The only issues with that plan are as above, the prices are rising so buying undervalue is tough, the builders are flat out so the price for work may not be as sharp as it could be or the delays could be an issue. You will find that the rents don't lift as much as you think for a well-renovated property compared to an average one but you will probably find that the good ones won't sit around compared to some of the ropier ones that might sit empty quite a while.
If anyone wants any specific help to flick me a PM or email and we can have a catch-up and I can see if there is any specific help I can give or send you too.
Hi @Kyle Elmer, thanks for your thoughts. It is good to know the tradies are busy, a few of the places we have been looking at definitely would need some work to attract the right tenants. It is just nice to know in advance it could take time to sort things like that out. Hopefully some more places come on the market soon, it seems a bit short of stock.