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arcticblue
24-05-2013, 01:09 PM
Has anybody been buying uninsured properties in Christchurch and renting them out?

I have found one that has been damaged and a cash payout has been taken. The damage isn't actually that bad and the house is weathertight and in a perfectly liveable state. I'm able to pay cash for it. My main concern is insurance, I'm not too worried if the house was damaged but I am concerned about public liability if a neighboring property burned down. Has anyone been able to obtain any type of insurance to cover this sort of thing? If so then who is it with (a PM is fine if you don't want to reply to this post)?

If anyone has been buying properties like this and renting it out is there anything I need to be aware of or any suggestions? Again PM is fine if you don't want to reply in public).

Thanks
ArcticBlue

Gonzo1
29-05-2013, 04:27 PM
I am a property investor and i see there are 2 issues you need to resolve . 1 The department of building and housing has been looking into this very issue from the point of view of the tenant. and i think there is info.
2 i do not know of any new owners that have been able to get insurance on an earthquake damage property without engineering reports geotec. You would stand a chance of getting insurance cover for all except earthquake cover with reports, and yes without insurance you carry the liability. Quantify the risk and see how it feels. Good luck

fungus pudding
29-05-2013, 04:51 PM
Has anybody been buying uninsured properties in Christchurch and renting them out?

I have found one that has been damaged and a cash payout has been taken. The damage isn't actually that bad and the house is weathertight and in a perfectly liveable state. I'm able to pay cash for it. My main concern is insurance, I'm not too worried if the house was damaged but I am concerned about public liability if a neighboring property burned down. Has anyone been able to obtain any type of insurance to cover this sort of thing? If so then who is it with (a PM is fine if you don't want to reply to this post)?

If anyone has been buying properties like this and renting it out is there anything I need to be aware of or any suggestions? Again PM is fine if you don't want to reply in public).

Thanks
ArcticBlue

The thing I'd be wary of is resale. Most buyers require a mortgage, and mortgagees won't cover uninsured properties. That means the property can only be sold to a limited market, so less competition when buying, and few buyers when selling.

Guild
30-05-2013, 01:44 PM
Check with the City council first and maybe the tenancy tribunal, the rumour that I have heard is that they intend to be lenient with property being let out at present while there is a housing shortage.
In the long run though the Council spokesperson suggested that the onus will be on the owner to prove that the property is sound and safe for letting, and for resale, especially where property has been written off as unsound by insurance companies. Where the property is proven to be unsound there may be a requirement to demolish or repair. So if it does or doesn't burn down either way you may eventually only be left with the land value.

arcticblue
31-05-2013, 10:30 AM
Thanks for the responses. I thought there might have been one or two who had actually rented out a place like this. Yes I am aware of the difficulty of resale and that land value may be all it's worth. The house hasn't been written off by the insurance company, the current owners just took the option of a payout to buy elsewhere and in doing this the insurance was canceled. The payout was for about 2/3 the resale value of the whole property and the remaining 1/3 would come from the land, however the insurance company never deemed it uneconomic to repair.

Anyway I will continue investigating the possible risks before making a final decision.

percy
31-05-2013, 02:58 PM
Would it pay to form a company to buy the property?
That way you would have limited liability.

arcticblue
31-05-2013, 08:20 PM
That does sounds sensible. Would it definitely limit my liability?

percy
01-06-2013, 06:55 AM
That does sounds sensible. Would it definitely limit my liability?

Would pay to check with your lawyer.

robbo24
27-08-2013, 08:45 PM
That does sounds sensible. Would it definitely limit my liability?

And your accountant - no hiding from the intent of a rental property with a company...

milt1968
15-04-2014, 08:23 PM
Hi arcticblue

Any updates?

Was thinking along a similar line to you about 6 months back. Decided against it in the end.

Did you end up following through with a purchase of an uninsured property?

T

arcticblue
18-04-2014, 09:52 PM
Yes I have an uninsured (as is) place. Not much damage done to the place. A number of small cosmetic cracks in the inside. A hairline crack in the garage floor. The reason the payout was taken is that one corner of the house is 60mm lower than the front door and most of the rest of the house. It's a 60yr old house and it's hard to say if this is from the earthquakes or not but was deemed to be from them. Got the cosmetic stuff fixed up and it looks like any normal 60yr old house. The corner is still sunken and in one room the floor does slope a little but I've been in other old houses that have that too. Structurally it seems fine.

milt1968
19-04-2014, 11:16 AM
Nice, good work.

Interesting read on Stuff.co.nz.

Over $1m paid for an 'as is' house in Merivale I think.

T

arcticblue
19-04-2014, 08:30 PM
Yes the price seems pretty high. I view the house as worth about land value. It may be worth a bit more but if there is a fire or earthquake or some other reason for the house to be pulled down then all you are left with is the land plus the expense of dumping the house remains. In return for this risk I get a greater return.

Perhaps the land value in Merivale is high enough to justify a price like that, I haven't looked into that area of Chch that much but even empty land in that area goes for a lot.

cammo
03-12-2014, 05:29 AM
These are Good purchases that will never again be repeated. Brave people will be rewarded. Do some repairs and get some paperwork and try to get some insurance by knocking on a lot of doors. You CAN get it again. With a bit of paperwork from some building inspection company or repairer you will get it again. Or an acknowledgement from the council of the schedule of repairs executed. It may involve time, but i am starting to hear stories. First few years premiums may leave you unable to sit down for a few days.

slimwin
03-12-2014, 08:02 AM
I've heard stories too. Of houses being resold as they can't get an engineer to sign off. Therefore no insurance possible. That was from a friend who is a mortgage broker and was dealing with the houses.
You'd want to get advice before you purchase if the intention is to try and make it insurable.

cammo
03-12-2014, 03:19 PM
Too many FW engineers around with their heads up their own asses. only Time will heal the problems as people start to question the closed minds of the paper shufflers justifying their public sector jobs. We are still in a state where the government is still paranoid about cliffs falling on people here. When we turned up, nobody questioned living on the cliffs and shaking happened the whole time throughout as well, ask the oldies on cave terrace . We have actually regressed past the point of progress now. No more pioneering spirit...worksafe NZ issues on the spot $2-5k fines for that ! Bureaucracy moves us into stupidity because somebody gave some green graduate a year paid to dream up some policies.

slimwin
03-12-2014, 07:28 PM
Lol. Just jump in with eyes wide open mate. The numbers can be large if you have to take a hit.

troyvdh
30-06-2015, 08:53 PM
What amazes me is that many folk are entering the 'property mkt' for rental or whatever and buying anything to rent out...at precisely the exact time to leave the rental market...I kid you not ...its actually happening....in about a year or 2...there will be so much carnage with these pre tend ****ers bailing out...because rents have halved..,.you heard it here first...

PS..my posh female neighbour bought a rental a few weeks back...it was trendy....

trackers
10-07-2015, 03:19 PM
hey troyvdh, do you think the property market (nationally or locally) is topping out? That's my gut feeling, but its a tough one with the ongoing statements around the shortage of supply in AKL

troyvdh
28-07-2015, 10:46 PM
trackers,,,Giday."topping out"...for rental properties absolutely yes.Ive had rentals for over 35 years in CHCH.Today Ive heard that 1/3 of bank loans are requested by investors...( I think its nationwide..or maybe just Auckland ..not sure).
But here in CHCH ..its just nuts...Like I said my neighbour bought one.As your are probably aware...a regular 3 bedroom house a few years back went for 3-400 a week.After the earthquake some folk (I never did) ..started to fleece EQ workers..charging 200 plus a room...no ****.
Anyways that's all coming to an end...there are thousands of "new houses"..being built (Im sure in say ten years time there will a name for them.....)..and some folk have been buying "as ..is"....good luck to them I say.
I used to have a few rentals..but have steadily sold ....this whole rental thing will end in tears....unless of course you are in for 10-15 years plus...
PS...have you heard on talk back radio ..an outfit called Propellor something....have a listen...cheers

troyvdh
30-07-2015, 07:19 PM
Bumped into a prop valuer today...known him for years.,..essentially ...time to leave folks....

slimwin
31-07-2015, 05:06 PM
Can't see it crashing. Flat lining for awhile maybe. But hey,nobody can predict the future.
I'd love a.dip soon too.

Southern_Belle
14-02-2016, 08:48 PM
Can't see it crashing. Flat lining for awhile maybe. But hey,nobody can predict the future.
I'd love a.dip soon too.I wonder how all the people who own uninsured properties feel today?? Interesting times in the CHCH market