This month we were lucky enough to have some of my clients share their own tips on property investment. One of these speakers had more than 100 rental streams at one point.
Quick takeaway from the clip
Hamish
Learn about inflation and how it effects the value of debt. The longer you hold debt the less it is worth and with this in mind I like the gross yield. The relationship between the rent and the purchase price is a major factor in how long you can hold the property for. My first property dropped in price in 2008 soon after I bought it. As the rent was high and only got better with time, I never felt the pressure to sell up. It was only during the last three of the past nine years that it almost doubled in value.
Les
It is a good idea to manage the property yourself if your plan is to have a portfolio. It means that you can be very selective with tenants. Les has found the importance of selecting tenants who will be happy to be in a property. Many of his tenants have been in the same property for more than ten years.
When buying look at the potential yield and capital gain. A typical Auckland property might yield 2.5 – 3%, so not great by standards outside of Auckland. However tenure might be more consistent and potential for capital gain greater.
Neal
Started to look outside of Auckland for yield. Finds that splitting the portfolio across the country can mean some more diversification. Can feel safer in terms of earthquakes. Downsides can be that you can not self manage and getting a good property manager becomes more important.
One possible retirement plan could be to sell half the portfolio and clear most of the debt. Leaving a really strong cash flow.
Richard
Likes a good buy and does up the property to attract a loyal, quality tenant. Likes a long term tenant, has some which have been with him for more than a decade. A good tidy up also gives you more equity on revaluation to help as deposits on more property.
Anna
Has bought some property without viewing it relying on third party inspectors. Found that it helped her focus on the numbers solely. Feels property managers are important. Had her bad experience picking a tenant on emotion while self managing. Using property managers gives her a lot more freedom.
