Building a quality property portfolio

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I found this article “Your End Game” by David Whitburn in the August issue of New Zealand Property Investor quite enlightening. Here are some snippets:

The three pillars of property investment are: cashflow, equity and growth. You will excel with a healthy mix of all three, and be stressed if you have nothing and probably say property investment is “too hard”. I know of property investors who bought property in towns in 2006 and sadly, seven years later they have had issues with rising rates, vacancies, tenant damage and reduced cashflow. … Then of course there are the Auckland and Christchurch property investors with undamaged properties, who in the same timeframe have had mild cashflow increased, but the value of their properties is up over 50% and still growing.

Passive cashflow
When you stop using your personal exertion to create cashflow (working for an income), you need something to replace it. This is where your assets must work for you. It is absolutely imperative to create cashflow.

My son’s old accounting teacher used to say, “Cashflow is the lifeblood of any business” – that simple statement equally applies to property investment.

Cashflow and equity
Some of you will have strong cashflow now, and others weaker cashflow. Some will have good equity, others poor equity. If you have weak cashflow and poor equity, you have more work to do. Equity is important but in the future when you have “retired” it is not as crucial as cashflow. Think of equity as an apple tree and cashflow as the apples. Having a big apple tree is likely to yield you more apples. These apples will feed you for a very long time. Having a tiny apple tree withering away producing fewer and fewer applies is stressful.

Growth
This is both growth in rents (cashflow) and also growth in house prices (equity). It is all about location. Buying in areas dependent on a single industry, or areas suffering population decline can prejudice your growth.

That’s why the Canterbury property market is a very exciting opportunity for any buyer of property -with the rebuild gaining pace we are beginning to see a number of Christchurch suburbs develop and become increasingly desirable. For example, the once considered dreary suburbs of Sydenham and Addington have been described by Lonely Planet as Christchurch’s “most dynamic neighbourhoods”. My opinion is that in Christchurch, you really can’t go wrong wherever you buy.

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About Peter Griffioen

Peter Griffioen - or simply Griff to those who know him - has an established reputation as a high-producing Harcourts Canterbury salesperson. With a focused approach to customer service you can rest assured that you are in good hands, whether it be a relaxed chat about the state of the market or an in-depth discussion regarding your next property transaction. The key advantage of engaging Team Griff’s services is their local knowledge and experience. Currently in this post-seismic era, it is vital to have true professionals working on your behalf, ensuring that you are guided through the process professionally and with a caring approach. The advent of the ‘as is, where is’ market means specialised expertise are required and Team Griff has taken it on themselves to both understand and explain the pros and cons of this now accepted sale/purchase option. For over 26 years the Griff brand has become synonymous with achieving results. Griff now prides himself with his five member team and takes much satisfaction from empowering them to both achieve and reach their own goals. A team with a proven track record placed with the highest ranking Harcourts Million Dollar Club members, exceeding the $275m level. Such accomplishments highlight the team’s exceptional marketing and negotiating skills. Team Griff are recognised as industry leaders for their online presence and regular blog posts of current and relevant real estate information. E-marketing and readily available property specific detailed info means Team Griff’s clients have the edge when it comes to selling their homes, not forgetting purchasers who benefit first hand. A simple Google search says it all – the Griff brand ranking with the most frequent. Griff’s life focus extends beyond business, with quality time and fun being high priorities, while mountain biking, boating and fishing provide that vital time out. His Christian faith is his anchor for daily living, and his community is important to him. For a team approach to optimize the result for your next property transaction, be sure to talk to this award winning team - synonymous with hard work and results! Griff and his trusted team welcome your enquiry today.

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