Insider Tips for Christchurch Property Investors – Part 1
According to the latest ASB Investor Confidence Survey, rental property is the investment most New Zealanders believe offers the best returns. Low interest rates, poor returns and risks attached to other investments, and an improving housing market sentiment make investment in rental property a logical choice. Therefore, it comes as no surprise that rental property has taken over the top spot from term deposits for the first time since 2010.
ASB Head of Wealth Advisory Jonathan Beale says: “The evidence I’m seeing and hearing as well is that it’s probably not a blip, people are thinking this is a good time to get back into rental property.” If you think the same way, Bayleys’ Christchurch Property Managers can help you with some insider tips to make sure you get the best returns.
What to Buy
One thing is clear: unfurnished 3- to 4-bedroom houses are in hot demand all over Christchurch, and investing in those is a good idea. Popularity of apartments is on the rise, too. If you are thinking about selling your rental investment at some stage, it pays to take into consideration the ever-growing demand for eco-friendly homes. A recent survey shows that eco-friendliness, rather than appearance, now tops home buyers’ wishlists.
With the current situation, many (first-time) property investors are toying with the idea of buying a damaged home, renovating it and then putting it on the rental market. While low prices for earthquake-damaged Christchurch properties are certainly attractive, don’t rush into anything or you may run the risk of being caught short on insurance cover. Insurers have warned that full replacement insurance ends when a previous homeowner sells you their property, leaving you covered only for what it’s worth at the time of loss. This means that if you buy a property you thought only had moderate damage, but turns out to be a write-off, you will only get the indemnity value, not replacement value. Of course that isn’t to say that earthquake-damaged houses can’t be a great investment, it simply means that you should do your due diligence, engage an insurance broker and get legal advice.
Where to Buy
Christchurch’s infamous skyrocketing rental prices have been in the spotlight for months, but they don’t apply across the board. Hotspots for rising rent prices and good investment opportunities are Sydenham, Fendalton and Merivale.
In the latest Trade Me Property Report, Brendon Skipper talks about 3 pressure cooker suburbs when it comes to demand: Christchurch Central, Linwood and St Albans. “We've seen the number of properties available for rent in these 3 suburbs plummet more than 40% on a year ago. And on the flipside, the properties that do get listed are attracting huge volumes of inquiry. For example, in Linwood the level of demand is up 101% on last year.” Another great investment opportunity is Rolleston, New Zealand’s fastest growing district.
Next time, find out tips on how to present your new investment and how to maintain it to ensure top returns.