A small cottage I bought last year in the south island of New Zealand is turning out to be one of my bettter performing properties.
It did take a little while to find the current tennant, but now he treats the property as his own. He has even been doing some painting and has fixed up the weatherboards.
He pays the rent weekly, which the agent deposits weekly into my account without fail. The tenant has done a few of his own repairs but other than that, I haven’t had to pay any other maintenance costs.
I basically bought the property, so I wouldn’t have to visit New Zealand just to open a bank account. It is difficult to open a bank account from overseas, but if you are getting a mortgage it is possible. I looked for the cheapest properties available and this is the one I found. I knew that it was going to take some time to get an account set up, so if the settlement was late, the penalties wouldn’t be too high.
As it has turned out, it was one of the best performing properties, in terms of nett return and ease of management.
And who knows it might be the perfect place to retire to one day.
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That is quite a nice looking place. Nothing fancy, but very comfortable looking. Hopefully it continues to pan out well for you.
You seem to have have had some luck with finding good agents in NZ. Are they basically acting as property managers for you i.e. collecting rent, informing you of problems/repairs etc? If so, roughly how much are you paying them to do that?
Well not all of them are good. It is often hard to know exactly what is going on, as communication is sometimes slow. They generally charge 10 per cent and handle everything from finding tenants and organizing repairs.
With paying 10% for the property manager does it still net anything worth mentioning? Or does that eat up most of your margin? How about on the rest of your properties?
On this property it does. I am generally happy if I can come out even across the board. Since these properties are in country NZ there are periods of vacancy. Also since the buildings are older maintenance costs are fairly high.
A good return on paper, may not work out well if the property is old or in a remote location. Capital gains are pretty strong in Australia and NZ, so it is a pretty good long term investment.