So, the usual dinner hour telephone marketing call arrives and with a great run sheet, the caller engages you in your financial future. The net result is you buy a shoebox Auckland rental apartment, as the income is so good and the Auckland housing growth rates look promising. The reality is you are buying into a non owner occupied apartment block which is full of tenants. If you don’t live on the property then you have no interest in reinvesting money to ensure the property remains looking good and cannot complain about noise, drugs, prostitution, parties, violence and unsavory behaviors…as you have no idea that it is going on as you don’t live there. However remember rule number 2 (b) (iii) of property – land goes up in value – under an apartment block the land area is small and any value increase is shared between hundreds of owners.
So next time you are called or are looking at apartments for an investment – ask the agent what the same apartments sold for 10 years ago – or what the selling price of the developers last project was 10 years ago vs today…that should be enough for you to steer clear – also when comparing rental returns – base them on net, not gross returns as an apartments costs with a body corporate structure is more expensive than a standalone house – talking about standalone house – we have sold most of our first stage at the Grove ( see www.eqgroup.co.nz/portfolio/the-grove) . Those and our Takanini Central houses do tick the boxes for investment properties – a mix of owners and investors, yes you own 100% of the land the house is built on and yes you are very close to a train station – a must for Aucklanders’s in the future.
anyway take care have a great summer holiday and celebrations – see you in 2014 which is going to be red property hot!
ps Living in apartment as an owner occupier is a great idea – check out our 88 Broadway project!