Hi Olly
I’ve read all your books you’re very talented. I live in West Harbour. I have a lot of energy to get started into do ups in this area and Massey. Are they the right areas to start in as they are close to me and I know them well? Or am I better to look around the North Shore (better locations)? You can get some real bagains in Massey and the older part of West Harbour 1970′s and 80′s homes at the moment.
Thanks, Anton

Anton,
Do ups are the quickest way to make profits – cautiously though as this market is fragile and capital growth has slowed.
Do ups can be done almost anywhere – it’s just a numbers game in the end. To start with I would stick to areas you know and understand rather than venture into new territory.
However do ups can be a minefield and should not be attempted without guidance.

If you wish I will send you information about my mentoring programme could save you from making some huge blunders.

Cheers, Olly

Hi Olly,
My wife and I brought a two bedroom brick flat as our first place in Christchurch in 2007 with thoughts of paying it off to a level where we could turn it into a rental. However we now would like to return to Wellington and i would like to sell it, but we are worried we will have to stay twiddling our thumbs until the market starts to rise again to get our money back. Also having heard scary stories about tenants gives me concerns if we do keep it.
Help! Thanks for any advice you can give.
Regards Dean

Dear Dean
First things first. You don’t say what you paid for it so it is hard for me to give any advice I would get a real estate agent to appraise the property as to its current sale value and rental level and see if you are likely to lose on re sale, or get your money back. If the suggested price is too low you either give up the idea of going to Wellington or rent it out at best rates.

The scary stories your hear are only a tiny part of the truth. Most tenants are decent and if you rent it out through an agent they will do all the checks for you on the tenant before they step through the door.
Regards
Olly

Olly,
I’m wanting to know if you know a (trustworthy) lawyer that would be able to help me remove a caveat from my mum and dad’s property. Obviously there is a long story behind this but the basics are: The caveat was lodged @20years ago by my dad who used the house as collateral for 50k. My mum and dad divorced @two months after this loan was taken out and my dad left and now lives in oz. He made no payments after this time.

My mum (bless her soul) paid off the original ANZ mortgage (@15 years later) and when we went to remove their interest discovered that this caveat still existed — much to our surprise as we had forgotten about that loan.
I have tried to contact the place but found that they had resettled into new trust structures twice (as they were the Pacific Island Business Trust) currently operating as Pacific Business Trust. We have had no contact from this place for the last twenty years, no statements or letters or anything.

The lawyers representing them have been unable to find contract details or forms regarding this caveat. They simply left the loan to grow and [it] now sits at @100k.

My question I guess is, as they never pursued the loan and there seems to be no evidence ie, original contract in existence….is there a legal way i could just have it removed? The property (our homestead) has been stalemate for the last 20 or so years and rotting badly…. We (me and my mum) are wanting to remove my dad’s name, put my name in his place and raise a mortgage to renovate the house but…….this caveat is like a knife we can’t remove, so to speak haha….

Any advice, comments or help would be heartfeltingly appreciated…

Regards Hemi

Dear Hemi
I would have thought that any good lawyer could apply to the LTO and give your story and have the registrar remove the caveat after he has made all the necessary enquires.
Another way that used to be popular was to register a $5 mortgage on the property which meant the caveat would have to be lifted to do so. This method is frowned on but it has been used from time to time.
I invite other readers to submit suggestions to help Hemi and any one else in the same position as the situation is not uncommon.
Regards
Olly

Hi Olly
I’m a builder living in Dunedin and I am looking to get into the property market and my question is is it better to do up houses and sell them on or keep them and rent them out?

Phil

Dear Phil

As a builder you have a huge advantage to start with and yes, doing up houses for fun and profit is one of the best ways to go in the current market.
However you (and any one else) who wants to follow this road to wealth must approach the subject carefully and in a business like manner.
The biggest error made by “ doer uppers” is to spend too much money and time on any one project and end up going backwards.
I have found that one month to get in and to get out should be the target to aim for with the average house.
Regards

Olly

Hi Olly,
Thanks for giving me the opportunity to ask a question. I am interested in gaining a new perspective on my current situation. I own an Auckland city apartment which is cash flow positive. Earlier this year I purchased a four bedroom house in Otahuhu for $359K. I live there with a couple of friends. What is your opinion of Otahuhu? I chose Otahuhu because of its relative affordability, older style homes and large sections. Am I being overly optimistic or simply foolish about the area? The reason I ask is because I am interested in acquiring a third property for rental investment and am not sure which type of property I should select. I am wondering whether it is wise to purchase a 3 bedroom house in Otahuhu for around $300k or whether I should go for a unit in a better suburb. Much appreciate your time.
Cheers, Andrew.

Dear Andrew
Otahuhu has some very nice areas and is one of the more popular South Auckland suburbs. I owned several buildings in the main street over the years as well as flats (Hall Ave, Great South Rd, Walmesley Rd, Atkinson Ave etc) and found it all very profitable most of the time (there were some horror stories but that’s one of the hazards of the game).

Whether you buy in Otahuhu again or elsewhere all depends on the bargain you get.
Let the deal will drive where you invest next- not you forcing the matter. A unit in a better suburb all depends what you call “better”. A good 3brm house is always preferable over a unit but spread out and look and learn. The aim is surely to make money so that is must be your goal. Which suburb and what it is come second.

Some of my clients like buying up in one area because they get to know it well, while others spread around to get balance and reduce risk. So long as you buy well and keep away from bad areas and bad properties you will come to little harm.
Regards

Olly

Hi Olly

It’s great you have given us the chance to ask questions thank you. My apologies in advance if this is a stupid question. We bought our house 4 years ago in Titahi Bay and currently have a mortgage of 247k with rv of 315k. The part we are in is a reasonable part – quiet and owner occupied but other parts of the suburb are not so great. We are thinking of a move to a smaller city (W*) in a year or so (not definite) and also planning on kids and dropping to one income.

We are concerned about the amount of mortgage repayments rates and insurance (plus maintenance) on one income. We are tossing around the idea of selling now and renting or buying something smaller or buying something in W* to rent out till we moved there. We don’t have to desperately sell right now but don’t want to be stuck in year or so having to sell. What are your thoughts? Are we best to wait and try and sell in a year or so or try and sell now?

Vanessa

Dear Vanessa
If you are going to sell you may as well get on with it as it will likely take a few months anyway. But you have to be sure that you want to move to W* so don’t start until you have made your mind up. I would rent in W* for a start as it will be cheaper than owning, and you can see how well you cope on one salary and a little one to feed.
Best of luck
Olly

Hi Olly,
Love your question service !!!

My investment property mortgage is due for renewal – and I’m leaning towards leaving it on floating rate – do you think the floating rates will increase next month after the ocr review?

The property is in Onehunga – appreciate your views on this suburb in regards to capital gains?
Thanks again,
Choc

Dear Choc
I would leave the mortgage floating for the moment as fixed rates are so much higher. I think interest rates will climb very slowly if at all.
Onehunga is a very popular suburb because of its age and village atmosphere. It is high on the list for long term gains as compared to the chilly-bin boxes
in some of the outer suburbs.
Cheers
Olly

Hi Olly

Our home loan (ASB) for our rental property comes of a fixed rate of 9.05% in July. I would like to re-fix the loan ($301,876) for 2 years at 7.30%. My husband says we should take advantage of the floating rate of 6% for a while and fix it once it starts going up again. I say the fixed rate would have increased at the same time and we won’t gain anything by waiting and we should lock it in now. What would you advise us to do?

Thanks
S

Dear S
I think stay floating for a few months yet. If there are strong signs of yet another interest rate rise then fix for 1-2 years.
I am not convinced that the economy can stand more interest rate increases this side of Xmas.
A lot depends on what happens overseas.
Regards
Olly

Hi Olly
What is your opinion on the future of the Whangaparoa Peninsula and in particular Gulf Harbour? Prices are comparatively low compared to the boom days and with Baby Boomers retiring over the coming years would it be a good place to look at?
Thanks
GB

Dear GB
I have a lot of confidence in the Whangaparoa/Orewa area and I think a lot of people will think likewise.
With excellent beaches views and first rate motorway to the city it has to be a good area to invest in.
Gulf Harbour is a little slower as it was over built — and there were some pretty shoddy building jobs done.
Anything near water and views has to be good.
Regards
Olly

Thanks Olly. I appreciate your opinion. Regards,

Hi Olly

Just finished (and really enjoyed) The Day The Bubble Bursts. Makes a lot of sense…

However, I’m a bit confused now after reading your articles from the last couple of years. I would’ve thought that we’re now in a situation very like what you described in The Day The Bubble Bursts as signalling impending major problems, but you don’t seem to be predicting a significant drop in property values.

I’ve probably misinterpreted the book and/or the articles, but I’d really appreciate your clarification on this point!

Thanks for the book and any response to this question,
Joe

Dear Joe

The bubble burst around the world with the Global Crisis, and collapse of many finance houses and companies both here and overseas. The property price crash in NZ was with the developers ( e.g. shoe box apartments) and it was only the low interest rates environment and the shortage of housing that stopped it spreading further. As at this moment I think the market will remain flat for a year or two with good buying opportunities in the mean while.

Regards

Olly