Grant Hoey Answers Questions About Apartment Investment are talking with Grant Hoey on Apartment property investment and strategies.

Why did you elect Apartments for investing?
Because there was a lot of people exiting the market and I could see that very good returns could be achieved if I became a market expert and did my homework. I also saw that investing in central city apartments for a positive cashflow will increase in value overtime.

What sets you apart from other Apartment property investors?
I know my niche market better than anybody because I have spent an immense amount of time becoming a market expert and work the market on a daily basis and I am continuously in the market viewing and buying apartments.

What are some of the challenges you’ve faced over the years?
This niche market was treated differently than other markets by the banks in regard to the LVR so you had to leave more money in the deal. This has changed now with banks lending up to 80% which has increased the value of all the apartments.

Other challenges I have faced include; dealing with some body corporate companies has been, at times, difficult and I have had to be flexible and willing to negotiate. It can also be frustrating at times dealing with some inexperienced real estate agent.

Give me a great deal experience (of yours) and of a client.
I purchased a 1 brm apartment last week to hold, but a buyer came along and offered me $50,000 more cash so I could not turn that down, $50,000 in a week and I didn’t even do a thing to it

A client purchased a 1 brm apartment as a long term hold, once it is cosmetically renovated it will return a pre tax profit of $3200 per year net after all the costs are taken out

What is the best way to secure Apartments – off the plan, auction, tender etc?
Off the plans can be a challenge as it is hard to predict what the market will be doing when the product is birthed out into in regard to rents and values. Auctions can be a good option and can lead to securing a great deal. Tenders can work sometimes if they suit your buying rules.

Basically you need to be using all the avenues to find the deals that suit your buying rules which are, auctions,tenders,private sales,real estate agent listings,old listings etc

How does it differ from other residential property investment?
Cashflow is currently far better than standard residential suburban investments. We now have an 80% LVR on most apartments depending on your financial position.

What are some of the challenges investing in Apartments?
Making sure the buildings are not leaking and do not have any serious structural issues. Always do your homework and research and don’t cut corners.

What makes a great Investment Apartment in NZ?
I would look for a Pre tax return of at least $2500 per year on an apartment. Investors may differ on this, but as long as you set yourself a realistic target, you can set your own goals.

What should be avoided?
Specifically I would avoid Hotel leases with guaranteed rental returns, Buying off the plans, Leaking buildings, buildings with no sinking fund and buildings with a low earthquake rating.

>>>Meet Grant Hoey in Marchclick here

For further reading on Property Investment NZ, click on the articles below:Setting Goals for Financial Independence – click here

Tips for Becoming a Property Expert – click here

Buying Rules for Property Investment – click here

5 Tips to Add Value through Renovation – click here

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