Investing in South Auckland Properties

South Auckland rentals provide some of the better rental yields in Auckland. However with many changes a foot it is important to get some feedback from those on the front line.

Shadi Salehpour and Richard Prasad have been involved in the South Auckland market for more than ten years. They share their thoughts.

Thoughts on South Auckland?

Topics discussed include, negative gearing, bright line test and the healthy homes bill.

Changes such negative gearing will mean a search for better yields. South Auckland has a few home and incomes which tick this box.

Bright Line Test?

The initial bright line test of two years, meant that anyone selling a rental before two years was up for capital gains tax. This did a good job of leveling the playing field for those honest property traders that already paid tax. Those buying renovating and selling on do have a positive impact on standard of homes in South Auckland. Changing this bright test to five years will mean that many genuine rental investors will get caught out and have to pay a new tax.

Healthy Homes Bill?

Many of the 450,000+ rental homes in NZ may need a further cash injection in the coming years. The healthy homes bill will add further requirements around heating and insulation. Current laws make it compulsory to disclose the level of insulation in a house to a prospective tenant.

Costs could include the following.

Insulating a home could be  2,500,- $3,000. Under the retrofit programme it is possible to pay this cost slowly through your rates bill.

Looking Forward to 2018

Areas of interest include Hill Park, other parts of Manurewa are getting better, Mangere Otahuhu.

The Unitary Plan means a lot of more sub dividable properties. South Auckland seems to have a lot of flat sections, which are easier to build on.

Government also looking to build and this will most likely put some pressure on build costs.

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