Tag Archives: Property investment

Team Griff’s predictions for 2016

Team Griff's predictions for 2016-1Welcome to 2016! After a well-earned break, we’re pleased to report that Team Griff has hit the deck running, having held its first two auctions for the year and taking on a number of new listings. We’re excited for what the year ahead may hold and are ready to assist you with your real estate decisions – whatever they may be. Continue reading

Rent falls affect west Christchurch, not east

ELEVATELiz McDonald at The Press reports:

Christchurch’s falling rents are mainly in the north and west side of town, new figures show.

Bond figures show Christchurch’s median residential rent is now $394, after falling from a high of $431 in January as the increased supply of homes settles the rental market.

The latest figures reveal how rental patterns are shifting across the city.

In the northern and western suburbs ,including Redwood, Avonhead, and Broomfield to Halswell, rents in the past year have fallen by between 5 per cent and 12 per cent.

Inner suburbs show less change, with rents slipping less than 5 per cent in Sydenham-Woolston, Linwood-Bromley, Addington-Hoon Hay and St Albans.

The picture is different in the eastern suburbs of Burwood, Avondale and New Brighton, where red zoning has reduced the number of homes available and demand is more matched with supply. Rents in that area have risen slightly for two and four-bedroom homes in the past year, and are unchanged for three-bedroom homes.

Bernice Ireland, managing director of Quality Property Management, said rents in the east had less correction to make, as they had not risen as much as in the western suburbs after the quakes.
The cheaper rentals in the eastern suburbs were attracting tenants, including mortgaged homeowners awaiting repairs to their own homes, she said.

Agnes White, of real estate firm Agnes White and Associates, also noted that rents were “still holding up on the east”.

In suburbs were rents had dropped, landlords needed to be aware of the change, she said.
“The market has changed quite dramatically and there are not as many people looking for homes. There’s more properties available and rents have softened.”

The bond figures show that in the central city, where many new apartment complexes have replaced demolished ones, median rents for two-bedroom units have risen 6 per cent. Among one-bedroom central city homes, median rents have fallen.

Ireland said the market for one-bedroom units had slowed the most, after having been in heavy demand from workers arriving after the quakes.

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Meet the property investors of Gen-Y

Before After

Meet Steve and Sarah – well they’re a little camera shy. 25 and 22 years of age respectively. With plenty of media coverage on young millennials being locked out of the property market, you might be surprised that these two are already on to their fourth property – and buying uninsured ‘as is, where is’ has helped them get there. Here’s a few things which have contributed to their success: Continue reading

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.

A quick word on negotiation

David Whitburn’s article ‘Negotiation – the art of the deal’ in New Zealand Property Investor is a good read:

Save yourself thousands of dollars by honing your negotiation skills. Being a good negotiator pays you a massive hourly rate. Too many investors negotiate hard over the comparatively small things, like the price of curtains and a plumbers charge out rate etc…But it is the big ticket items on which they should actually be negotiating – with vendors on price and with lenders for loan terms and good interest rates…

While I believe being a good negotiator is good skill to have and having a planned and structured approach will assist with good negotiation, I actually believe the bigger saving comes from simply taking action and doing it! Over the 24+ years that I have been selling real estate I have seen so many people not prepared to commit because they are waiting for that bargain or the big break. I believe the big breaks come from the small steps you make, executing the plan, and securing the property.

Land is a rare commodity…
The bottom line is that there is only a certain amount of land available and they aren’t making any more of it! The key is simply securing it and personally I think acquisition is a higher priority than cost.

Personally, when I look back at the property that I have purchased over the years I never lament over price paid but I often rejoice over having secured it.

Worth thinking about and as I said to someone today, you would have to be pretty stupid to get it wrong buying property in Christchurch at the moment!