Buying your first property

[vorno]

Troy I do respect your advice, 35 years would make you an expert.
..I also tend to take the "hear all" approach and see what people have to say.

Forming relationships with those in the trade & the "KISS" rule is indeed good advice.
On the other hand, reading a book on house related material will help train my eyes & at least give some insight.

So, both I feel are good advice!

Cheers

[artemis]

For a first investment purchase, suggest start close to home. Learn to do property management, tax returns and some repairs yourself. Plenty of info on all these is available. Start building equity quietly. Once you know the ropes you can get more adventurous!

[minimoke]

First thing. Decide if you are buying your first home or investment property. These are two different things.

Regardless of choice I’d agree with pretty much all advice given so far. To summarize

• Buy into the right area first, house second. Look for an area that has prospects to your future buyer. For example a four bedroom house will always appeal to a family so is it near a school?. No point buying a one bedroom if it is near a school.
• Try to do as much as you can. The more you spend the greater the impact on cashflow. Conversely can you use your time earning more in your profession than the cost of hiring someone.
• Personally I wouldn’t buy out of town. Owning an investment property is a bit like owning your own business – you need to be pretty hands on and close in the early stages. If there is a problem much better to pop in the car and deal with it face to face
• Relationships are key. Get flat mates in to help pay the mortgage / repairs. Look after your trades and they will look after you.
• Look carefully at the history of the house / area. Nature always wins – so a place may be dry today but soaking in a rain
• Look to the future. Is that really a motorway that’s being driven through the neighborhood in 10 years time.
• Do the math. I cringe with governments trying to push the dream of “own your own home”. Its not cheap so is it the best short/medium/long term option.
• If nothing else, make sure you can afford the insurance and you have the ability to pay on time.
• Don’t trust shysters. I put real estate agents ( I haven’t used one to sell in over 20 years), property managers and “Property to Wealth” gurus in that category. Check and double check what your “advisors” say. So far there is no advice on this thread I’d disagree with.
• Be prepared for substantial increase in interest costs. An increase from 6% to 9% may only seem like a 3% increase but you’ll be paying 50% more in outgoings. You need to get your debt down. The lower your debt, the greater your equity, the more you can do with your capital.
• Don’t be afraid of debt. Providing you can always afford to service it and it funds growth. So every dollar you put into your property you want to make sure you are going to get more out of it.

[rentex]

Buying your own home and living in it is a great feeling.
Buying a home and renting it is also a great option if circumstances favour that over living in it.

Agree with most of above, definitely some good advice.
There are good experts in every field and there are the 'not so good', talk to a few if getting them involved.
Properties are lots of money so due diligence goes without saying....

Good rentals are typically solid basic houses or units, eaves and external gutters, light, dry, 'good bones', well maintained. Much the same as first houses.
Look out for body corp as mentioned above, not only with rates, but potential limitations on what you can do with the property, rules like pets, liability to cover work at other units in the complex where yours has no issues (think leaky penthouse in apartment block).

Take a builder/others through the property before purchase.
Then perhaps build a spreadsheet with some of the costs worked out on a 5 year+ plan.

Majority of rentals in Auckland will require feeding the mortgage a little if going in with 20% deposit.
Better to be realistic on the asking rent and have a great stable tenant then push for top dollar and take chances or have vacancies.
You can check Trademe, realestate.co.nz and others for an idea on rents, even go to a few open homes.

It's possible to achieve higher yields with multi-dwelling properties, but keep in mind complications with tenants (compatibility), water and power metering, council requirements.

Would also suggest talking to an accountant about structure of home/rental for tax and other purposes as you may need to set up appropriate entities before purchase.

All the best, it's worthwhile in our opinion (most definitely biased).

[gv1]

Location is very important.
Value for money, think if you decide to sell tomorrow, can you sell at that price.
If you are young and single, buy something small...not too much mortgage.(if the deposit is not much)
Make sure you get good tenants, they can rack the place.
Don't put too expansive things in, e.g carpets etc.
Try to maintain the place tidy in terms of repairs etc.
Don't leave the selection of tenants on property managers.
If the property managed is by property manager, make sure you have regular inspection.

[Stumpynuts]

I wish I had purchased earlier than I did.

Some things I read a few years ago about property.
1. The best time to buy property was yesterday
2. Buy land, it's a finite resource and nobody can keep on reproducing it.

[h2so4]

Crikey go and read a Bob Jones book.

[NZSilver]

Hi guys, im currently looking at property, looking to get pre-approved for a loan then look to buy mid year. I'm new to this game so to speak, and have looked at kiwibank for pre-approval. I was wondering if any seasoned property investors could give me information on how to get a sharp rate from the banks? Am I best to approach several banks ie co-op, TSB etc. and what are the critical points on negotiation. I have around 30-40% deposit, good income and can get family to secure it. Can you get pre-approval from multiple banks?Thanks in advance

[fungus pudding]

Hi guys, im currently looking at property, looking to get pre-approved for a loan then look to buy mid year. I'm new to this game so to speak, and have looked at kiwibank for pre-approval. I was wondering if any seasoned property investors could give me information on how to get a sharp rate from the banks? Am I best to approach several banks ie co-op, TSB etc. and what are the critical points on negotiation. I have around 30-40% deposit, good income and can get family to secure it. Can you get pre-approval from multiple banks? Thanks in advance

No harm in talking to any or every bank e.g. Don't try and negotiate - just ask them for the best they can do then tell them you'll think it over - don't make a secret of the fact you are shopping around. But why would you want family to secure your loan when you have 30% deposit?
I know Westpac had a deal whereby if you borrowed a minimum of 150,000 they gave you 1500 towards your expenses. That was brilliant because I put a mortgage over my own home ,and got 1500 even though I didn't pick up the mortgage - it's just there to secure an overdraft if I ever use it. I suppose they all have similar schemes.

[Joshuatree]

I like KW's approach.Sell all your shares etc and try and buy the house for cash or as much cash as you can put in. Then take huge mortgage out and invest in NZX high div stocks like Gentailers for ex. You can see the attraction there but need to be pretty savvy / smart/ ballsy with this approach. Also rent it out /have flatmates for a while. Not for everyone but you can leverage things your way.
On another tactic ; a friend put in an offer a few days after a house was listed. That forces the auction to be bought forward to a week from the offer(is my understanding) .Consequently any other int parties were put on the back foot with not having enough time to due due diligence etc. Consequently only one other person registered for the auction and dropped out due to the time constraints and my friends price was accepted. He took control of the situation , awesome.