My client was based in Auckland. He was looking for a cash flow positive property in a good location with minimal renovations needed.
This is what we found:
2 attached units
PP of $830,000
Rent appraisal $440pw
End gross yeld - 5.2%
I found him two attached units through a relationship with a local property agent. The properties are walking distance to town and are in a
good neighbourhood that is easily rentable.
One of the units was fully renovated and the other was in reasonable condition, but could be renovated to add value and rent. I worked out
that by spending approximately $30,000 and moving rent to market-level, he would lift the rent from $210 per week to $440 per week and the
value by an additional $20,000. He purchased the properties for $830,000 before renovation. This property was settled at the end of January
and I would be surprised if the client has not already reaped some market gains as units in this condition are not selling for under
What made the difference
A few key things helped us in this multi-offer situation. One was offer conditions, which we put time in with our buyers before offers go in
to cover off as much ground-work as we can and get the strongest possible conditions. This makes a difference when prices are close and
finance is hard to get. We work closely with agents from traditional listing agencies, and I am sure they will have communicated to the
vendor that our buyers are well prepared, pre-approved and serious.
This was a multi-offer situation and we believe there was a higher offer, or at least they were very close, and our preparation and
conditions will have made a big difference.
Technology also helped! The client lives in Auckland and works very long hours. I was able to Face-Time with him when I viewed the property,
record videos, meet with the building inspector during the due diligence process and help him work through everything.
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As an accountant is not a place for my personal political opinions, but professionally speaking I’m pleased with this result, and cautiously
optimistic we might have a friendlier tax environment for the property sector for at least a few years. But what does this mean for property