Bayleys reckons it has sold New Zealand's highest yielding rental property after an investor cheaply turned a spare living area in a run-down Invercargill house into two extra bedrooms.
Buying the two-bedroom, two living room Appleby property for NZ$35,500, the Invercargill investor spent NZ$2,500 dividing one living area into two more bedrooms, then rented it out for "more than" NZ$400 a week - a gross yield of about 55%.
“There are no official records when it comes to the highest rental yields from residential property in New Zealand, but anecdotally among our network of 60 Bayleys offices, we believe this would have to be a New Zealand record,” Bayleys Invercargill manager Trevor Mason said.
“By comparison, in Dunedin the average yield for a rental property tenanted by students is between 8 – 10%."
"At 12%, investors are doing well. Palmerston North and New Plymouth are around similar levels, and Hamilton slots in just below that. And in Auckland, you’re doing well to get between 4 – 6% return," Mason said.
“With all this talk about fortunes to be made in shares, gold, or gambling on foreign currency movements, at the end of the day, residential property is still delivering an outstanding return in times of uncertainty. It just goes to show that Kiwis love their bricks and mortar investments," he said.
After selling the home, Mason said his office had seen a jump in enquiries from other Invercargill investors looking for similar type properties near the Southland Institute of Technology campus, and was even now tracking interest from as far away as Auckland.
He said the sellers had been looking for a sale price in the twenty-thousand dollar range and were "over the moon" with the sale.
24 Comments
You have got to be kidding me. Somebody is paying over $400 per week to live in that, in Invercargill?
That's criminal. Hardly something for Bayley's to be crowing about, they should be ashamed of themselves and so should the landlords.
It's greed and it's disgusting.
C'mon, that is not a house! That's a shed! Can you imagine how cold, draughty and unhealthy it's going to be for the family living in there? Rusty roofing, a bodged up bunch of interior walls thrown together, damp and mouldy through winter, massively inefficient and expensive to heat, my god, my dog's kennel is built better than that.
Human beings shouldn't be living in that, period - let alone paying for the privilege.
Seriously doubt it; see TM rental listings for the suburb;
Yeah, the old story regarding "statistics" . . . . .
Rather than telling us the theoretical yield, let us know what the actual yield is after a year and then it may have some credibility.
Any landlord will tell you that a tenant willing to pay $400 a week rent for that is desperate. I really question whether the tenant plans be long-term and a "good payer". I expect that within the month the tenant is probably going to be three and a half weeks behind in rent. The landlord is going to being perusing this through the Tribunal and that it is going to take another three months without rent to get the tenant out (without paying any further rent) and who is most likely to celebrate their departure with one great big party to which all and sundry are invited (especially after seeing that the landlord has been presumably crowing to the land agent regarding the fantastic return)!
I await feed-back July 2013. I would love to be proved wrong.
That is absolute BS for the rent and you seriously have to doubt the integrity of Bayleys. I owned a renter in an adjacent suburb for sometime and my first thoughts for a house like this given inflation was $200 max. Going by Trademe listings I am on the money. Come on Bayleys this reeks of desperation!
That property would be unrentable to anyone but a tenant that has no intention of paying, who of course would take it at any price.
Realistically if thoroughly tidied $200pw would be an exceptionally good rent to achieve. In condition as shown $80-120pw would be all that could be achievable.
A similar property in Mataura sold not that long ago for about $7000. Of course on properties of this value rates and insurance become a serious consideration.
I purchased a Dunedin property (absolutely no comparison to this one) for just over $13,000 in 2001. That acheived about a 50% return because the purchase price was so low rather than the rents being inflated.
In real estate speak - Inside this tasteful, ode to the older age residence lies an amazing array of different types of timber, with boutique baroque styles of joinery, this house simply screams RENT ME. An absolute cash cow that would make an incredible investment for only the discerning investor.
Layman speak - Its crap, you'll lose money on it.
Doesn't look much from the outside, but interior looks ok...
http://jakabare.com/wp-content/uploads/2011/08/Great-Luxury-Interior-De…
Hold on…..
Bayleys sold the property on behalf of the vendor and got the best price possible in the market as any good agency does. Bayleys was doing its job. The vendor was happy.
The property was purchased by a buyer who, as they bought the property, was obviously comfortable with the price. The buyer was happy.
The purchaser then rents out the property for $400 a week (that’s the landlord’s figure). They are obviously professional in what they do and have achieved an excellent result in the market. Smart. The landlord is happy.
The tenants are obviously happy with the arrangement, otherwise they would have gone and rented elsewhere. It may be close to their work, or Southland Institute of Technology, or they may be in the oil or gas exploration sector and the company is paying the rent. Regardless, they are happy.
So what’s all the fuss about…? As far I can see all the parties in this are perfectly happy with a straightforward and transparent business transaction. Eveyone is just doing their part well and professionally.
It’s business people – get into it or get over it.
Tipical media - why let facts get in the way of a good story. Take one look at rental properies in that area and the most expensive 4b rental is $370 - furnished. Unless it is rented by the room to students at $100 which is totally reasonalbe for that area.
Please give us facts not gossip in the news!!!!
To say that every one is "happy" misses the point. The point is that a respectable firm like Bayleys ( who remember, brought the story to the media) should not besmirch their reputation by showing off how slum landlording is profitable. It's not a good look for Bayleys or the real estate indiustry as a whole.
Just because you can, does not mean you should.
Ripping orf the General Public is so praiseworthy.
Rigsby would have been so proud. (For all those English slum landlord fans).
For 20Grand P.A. they could have bought the farm, not the chicken coop.
But then...that is the price of a small deposit.
Ye get bigger deposits on the sole of yer shoes.
Bayleys....what can I say....4% of 35K....in the big time now.....
WHOOO...WHOOOOOOOOOOO
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