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Apartment Specialists Podcast No: 133

Summary:

Is your prime objective capital gain when buying an apartment? Then you might be this type of buyer. Watch this video to know what kind of an apartment you should be going after.

TRANSCRIPTION:

Buyer type number two. You are an investor and you are looking at buying an apartment. Your prime objective is capital gain.

Basically, you are looking for an apartment where you are going to be renting it out, and then selling it to an owner/occupier down the track. You are going to be buying it, obviously, you are going to get the best numbers you can. For example, rent minus expenses. But the objective is to then sell it to an emotional purchaser who will pay a lot more.

The key thing with this is actually the size. You have got to have the whole market. For example, if you bought an apartment that was 45 metered squared, and it is a two bedroom, not all the banks lend 80% on that. You are cutting out half your market. You are looking at two bedrooms above 55 square meters and you are looking at one bedroom above 40, ideally, 45 square meters and basically, the bigger the better.

The other thing is, that it needs to tick all the boxes. It needs to be livable. I do not mean livable in regards to high-end. I mean livable as in – apartments are the future. It is not going to be long until the average house in Auckland is going to be a million dollars. It is already well over $700,000 and it is going to keep on going up.

If you want to buy a house below $500,000 and you are looking at a 40 minute commute, apartments are where it is going to be. You can see it is going to happen, and it is happening now. I repeat myself that buying in this market, it is a market that is, obviously, livable and desirable. This is a market that is moving. You’ve got to quote area as size.

If you think about car parks and it is the middle of the CBD, doesn’t it have to have a car park? That is a bonus. If it is on the fringes and it has to have a car park. If it is a one bedroom, you will find it has to have a car park, unless it is at the very central. On the fringes and my pick is the two bedroom market, because you think of a couple buying their first property. It will not be a house because they will not be able to afford it. They are going to want another room for when they have the first child. And it is going to be their first property.

Think of all those people who have a house in this younger generation. What is their first investment property going to be? It is not going to be another house because it is too expensive. It is going to be an apartment. That is the market that is moving. That is the market that is going to continue to move.

Now, Let us take another story. Say my sister and she has a house. She’s got one child. As soon as they have another child, they are going to need another room.

They have a house in Ellerslie and they need to upgrade. But they have got to get quite a bit of cash. This is what we are going to do. We are going to buy a two bedroom apartment and I will get the rent, so it covers the mortgage. Hopefully, within two or three years it should get $100,000 in capital gain.You are really going to need that and use that leverage to buy your next home and sell your last home.

That is what we did. We bought an apartment in Victoria Street. It was $380,000. A one bedroom with 58 square meters and a high stud. It is a nice area and it is gonna need a lot of money in to refurbishing it. It rents for $595 per week. It is more than the mortgage payments and that is after covering the Body Corporate fee.

Since she’s purchased, she’s already made $50,000, and that was only four or five months ago. If you are going to follow that criteria, then you are looking at capital gain. You are looking at two bedrooms, with or without car parks, if it is in the city centre.  It is in the fringes or in the suburbs, but it needs to have undercover car parking – it just does.

To recap, one bedrooms that are bankable. All the banks will lend on them. They need to be desirable. They need to tick all the boxes. You do not want to buy an apartment that faces south that gets no sun because in the long term, an owner/occupier will not pay as much for that.

You do not want to buy an apartment that has something wrong with it. For example, it is extremely noisy because an owner/occupier in the future will not purchase that. Remember, a desirable apartment, you may have to pay more for now. But that means it is going to go up more because it is going to be more desirable in the future.

That is buyer type number two and you are an investor. You are looking for a capital gain as your primary objective. The rent will cover most, if not a little bit more, than the cost of the outgoings.

Next, I will be talking about buyer number three, which is high risk. Cheers.

Apartment Specialists Podcast No: 131

Summary:

This podcast gives you an overview of the different types of apartment buyers in Auckland. Why do you need to know what type of buyer you are? What are the things that a buyer is concern about when they are choosing an apartment? Watch this video to get all the details.

TRANSCRIPTION:

Good day. What kind of apartment buyer are you? Now you go in Trademe and there are 600 to 700 apartments on the market. Are you anyway confuse? Are you trying to figure out values? Are you finding it difficult to figure out what is a good buy and what is not a good buy?

When you buy an apartment, it is not like just buying a house. There are over 14 different types or categories of apartments, and you need to figure out which kind of apartment is going to best suit your goal. Owning an apartment is a solution to a purpose, and you have got to find out what your purpose is. Now it seems a little bit weird talking like this, but the point is, you are dealing with 700 apartments and you are shopping online.

You are going through Realestate.com, or you are going on Trademe, trying to find the apartments that suit you. You are asking all these questions. That is a lot of work and with that many on the market, that is pretty hard to figure it out. I mean I was an agent and I have been in the game for a while now.

However my first six months, I did not know what was going on and I was doing it everyday. Now the commitment from a buyers perspective, how do you figure out what is best for you? You need to figure out what is best for you and you also need to find out what kind of buyer you are.

What is the purpose of the apartment you are looking for? So what I am going to do is help you figure out what kind of buyer you are. You can then go through and take those 700 apartments and get them down to about 15. Now figure which ones are listed too high, figure out the ones that are inappropriate, and make the best purchase for you. Then you will be thanking me in five years and that is for sure.

Anyway, to give you an idea I will put it in five different categories. Now you are either an investor, where return or basically income is your main objective and capital gain is a bonus. Number two, you are an investor where capital gain is the main focus and income is the second main focus. Number three, you are an owner occupier, you have got certain criteria, like you may have pets or you may want to be in a certain part of town.

There are different kind of criteria. You are either concerned about lifestyle, so this is a purchase where it is about how you live. Capital gain is not as important, so that is were a leasehold would be very appropriate. Number five is high risk; that is where you are looking at buildings that are leaky because when they are fixed they are going to be worth a lot more. You are looking at buying into hotel leases, because they are harder to buy into, because of your finance, but when they come out. it is going to be worth a lot more.

What I am going to do is I am going to do a forecast on each type of buyer, and go into a bit more detail on each one of those five types. You can figure out how can you best find the solution that you want. And you could be looking at the wrong category. If you are doing that, you are asking all the wrong questions.

This is about your time, and time is valuable. You have got so many listings in the market and there is a lot of excuse my “French” – crap out there. You need to sort through it and the more education you have, the better purchase you will make. Anyway each week one will come out, and yeah I will talk to you soon.

Cheers.

Summary:

Buying an apartment is not like buying a house as there are over 14 different types of apartments. The key factor is figure out your goal from buying this apartment. What purpose do you need this apartment for? This can be hard when there are lots of apartments on the market and it can be confusing when researcher what kind of buyer you are.

You are either an investor, where return or basically income is your main objective and capital gain is a bonus. Number two, you are an investor where capital gain is the main focus and income is the second main focus. Number three, you are an owner occupier, you have got certain criteria, like you may have pets or you may want to be in a certain part of town.

There are different kind of criteria. You are either concerned about lifestyle, so this is a purchase where it is about how you live. Capital gain is not as important, so that is where a leasehold would be very appropriate. Number five is high risk; that is where you are looking at buildings that are leaky because when they are fixed, they are going to be worth a lot more. You are looking at buying into hotel leases, because they are harder to buy into, because of your finance, but when they come out, it is going to be worth a lot more.

There are more podcasts about each type of buyer in depth, search these through the Apartment Specialists website for further detail.

TRANSCRIPTION:

Good day. What kind of apartment buyer are you? Now you go in Trademe and there are 600 to 700 apartments on the market. Are you in anyway confuse? Are you trying to figure out values? Are you finding it difficult to figure out what is a good buy and what is not a good buy?

When you buy an apartment, it is not like just buying a house. There are over 14 different types or categories of apartments, and you need to figure out which kind of apartment is going to best suit your goal. Owning an apartment is a solution to a purpose, and you have got to find out what your purpose is. Now it seems a little bit weird talking like this, but the point is, you are dealing with 700 apartments and you are shopping online.

You are going through Realestate.com, or you are going on Trademe, trying to find the apartments that suit you. You are asking all these questions. That is a lot of work and with that many on the market, that is pretty hard to figure it out. I mean I was an agent and I have been in the game for a while now.

However my first six months, I did not know what was going on and I was doing it everyday. Now the question from a buyer’s perspective, how do you figure out what is best for you? You need to figure out what is best for you and you also need to find out what kind of buyer you are.

What is the purpose of the apartment you are looking for? So what I am going to do is help you figure out what kind of buyer you are. You can then go through and take those 700 apartments and get them down to about 15. Now figure which ones are listed too high, figure out the ones that are inappropriate, and make the best purchase for you. Then you will be thanking me in five years and that is for sure.

Anyway, to give you an idea I will put it in five different categories. Now you are either an investor, where return or basically income is your main objective and capital gain is a bonus. Number two, you are an investor where capital gain is the main focus and income is the second main focus. Number three, you are an owner occupier, you have got certain criteria, like you may have pets or you may want to be in a certain part of town.

There are different kind of criteria. You are either concerned about lifestyle, so this is a purchase where it is about how you live. Capital gain is not as important, so that is were a leasehold would be very appropriate. Number five is high risk; that is where you are looking at buildings that are leaky because when they are fixed, they are going to be worth a lot more. You are looking at buying into hotel leases, because they are harder to buy into, because of your finance, but when they come out, it is going to be worth a lot more.

What I am going to do is, I am going to do a forecast on each type of buyer, and go into a bit more detail on each one of those five types. You can figure out how can you best find the solution that you want. And you could be looking at the wrong category. If you are doing that, you are asking all the wrong questions.

This is about your time, and time is valuable. You have got so many listings in the market and there is a lot of, excuse my “French” – crap out there. You need to sort through it and the more education you have, the better purchase you will make. Anyway each week, one will come out, and yeah I will talk to you soon.

Cheers.