Real Estate Pro Articles
   
Real Estate Pro Articles Author Photo    

Buying Investment Property in Christchurch – What You Need to Know



[Valid RSS feed]  Category Rss Feed - http://www.realestateproarticles.com/rss.php?rss=268
By : Whitney Cox    99 or more times read
With a severe accommodation shortage in Christchurch, and thousands of people leaving the city permanently, opportunities exist for canny property investors to buy houses at lower than their pre-quake market value and establish them as profitable rental investments.

Opportunities to buy residential investment property in any post disaster market carries similar risks and things to look for, but below I have outlined some of the key things you need to know:

  • Do your homework

    Find out what areas of the city people wish to live in – what is in each community in terms of schools, shops, workplaces and other facilities. Keep in mind the nature of the type of property you are looking at – for example a three or four bedroom property is most likely to appeal to a family, so what resources are nearby that a family will be looking for? Schools, supermarkets, childcare, parks are just a few things to consider. A one or two bedroom unit is more likely to appeal to a single person or couple, so once again, what things will your target market be looking for close to their accommodation? Is it close to entertainment venues, tertiary education institutions, shops, other similar housing (where their friends may live)?


  • Find out what areas have experienced the worst seismic damage or may be at risk from liquefaction.

    At present, the areas that have been worst hit include Avonside, Bexley, Aranui. You can obtain liquefaction maps from the local council or online.


  • Get a rental appraisal from at least three property management companies.

    Choose companies that specialize in property management of Christchurch residential investments, and get their best assessment of the weekly rental value of any property you are considering purchasing. You may also wish to check out their track record and service offering, as you may wish to work with one of these companies as you build your investment portfolio.


  • Do your own rental survey

    You can get a good indication of rental prices for a particular suburb and property type by setting up searches on sites like TradeMe.co.nz, which will provide current listings in each suburb.


  • Use your Google!

    Google has a useful free service called Google Alerts which you can set up to keep track of the parts of Christchurch you are interested in. You will receive daily alerts for any online content relevant to the search alerts you have set up. Creating alerts is quick and easy, just start by going to www.google.com/alerts and starting setting them up. You can also sign in and manage your alerts whenever you wish.


  • Be aware of building materials.

    Pre-quake, buyers normally placed a premium on “permanent material homes” which in Christchurch normally means houses or apartment buildings made of brick, concrete block or Summerhill stone. The rationale was that permanent material homes require less in terms of ongoing maintenance – ie painting and repairs. Post-earthquake, many properties built from those materials, especially if they are more than 10 years old, have not held up as well, so now many people are looking for well-built timber or weatherboard construction houses.


  • Potential for vacancy.

    Many landlords are keen to rent to the student market, however it is important to keep in mind that student rentals are normally vacant for up to three months of the year. This can be a good time to do annual maintenance, but needs to be factored in to your budget when you are working out the rate of return you will get on the purchase.



  • Rates and Insurance costs

    Again in a post-quake environment, it is important to check in advance if you will be able to get insurance cover for the property you are looking at, and also determine what the annual council rates (property taxes) are. This varies widely depending on the part of the city the property is located in, and may well rise over the next few years as the local council and ratepayers bear some of the costs of rebuilding infrastructure after the 2011 quake.


  • Building reports and engineer’s reports

    Your real estate agent will advise you what the current expectation is from lenders around engineer’s reports prior to finance being approved. These are now quite standard, particularly if a property has suffered any damage at all. The lender will also need to know if there are any outstanding EQC (Earthquake Commission) claims on the property.


Doing your research into the ins and outs of the local market is the key to success as a rental property investor, as is partnering with an experienced property management company. Make sure you buy as low as you can, and the likelihood of your property producing a good return is greatly increased.
Whitney Cox is a New Zealand-based blogger working with local property managers, Ireland Property Management. She writes on a variety of topics, including property management and other tips for investors.

Related Articles



Actions
Print This Article
Add To Favorites



Sponsors

 

 

© All rights reserved to Real Estate Pro Articles