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Top Suburbs For Tauranga Property Investors Blog Title Image Connect Realty

Top Suburbs For Tauranga Property Investors

Tauranga property investors have had plenty to smile about lately. The latest Quotable Value New Zealand figures show property prices in Greerton, Gate Pa and Parkvake have risen more than 30% in the last 12 months!  The popular family suburb of Greerton had the biggest gain with median house prices rising from $323,200 to $429,650 in the last year, a gain of 32.1%.

QV Suburb Report Tauranga 2016

Situated on the southern gateway to Tauranga, Greerton is very handy to Tauranga downtown only 6km away.   This suburb has always been popular with families due to good local schools and a shopping ‘village’ complex with over 120 retailers –Tauranga’s third largest shopping centre.  Astute property investors are investing in the $400-500,000 bracket because of the excellent rental returns they receive, and the knowledge that they are getting good long-term tenants.  Investors in this area will also find well-built established homes that do not require large renovation costs to bring them up to market standard.  Often the homes just require some insulating and cosmetic touches to lift their street appeal.

Gate Pa is handily located 5km from central Tauranga. This suburb also contains a shopping centre, supermarkets, restaurants and schools.  Tauranga Girls College is a very popular high school and many families are looking to rent in this area.

Parkvale is located on the coast about 5km from the city centre. Parkvale is a pleasant residential suburb with a range of lovely family homes throughout the area. The local primary school is Merivale.

These suburbs also appeal to investors because it is difficult to find a property under $400,000 in Tauranga, with houses in many other suburbs being snapped-up the day they are listed and/or before they even get to auction.

This, unseen, demand for housing is pushing up house prices in the whole of the Tauranga Region.  Real Estate figures show that most sales in April 2016 were for homes in the $400-499,000 price band whereas the same time last year it was for homes in the $300-399,000 band.  In addition, the sales of million-dollar homes in Tauranga has jumped by 93% compared to the same time last year!

Demand for rental properties is also huge, with many great tenants on our waiting list waiting to find a decent home in a good suburb.

So if you are considering investing in property in any of these suburbs, or Papamoa, Mt Maunganui and other suburbs in Tauranga, call Christine Jenkins at Connect Realty. Chris will guide you through the process, give you a free rental appraisal, find you high-quality tenants and manage your property with expertise and experience.

Chris Jenkins, Connect Realty 0800 333 221.

Investing in a Bay Of Plenty Property

Despite current housing issues in New Zealand, residential property investment remains a popular option for people looking to secure their financial futures.

cartoon image of house with investment graph

The most important calculation in Property investment is what return your property will give you, in other words its “yield”, which measures the future income stream of an investment.

An investment Property’s “yield” measures the property’s income earning potential on an annual basis and does not relate to the capital gain of a property. Yield is usually calculated by multiplying the annual weekly rent by 52 (weeks of the year) and then dividing this number by the purchase price.

For example, if a property cost $300,000 and was expected to be rented for $350 a week:
$350 x 52 = $18,200 / 300,000 = .0606 or 6.1%.

6.1 % is the yield for this property.

Of course this number does not take into consideration insurance, maintenance, property management fees, rates etc. However, it is a useful measure to compare the different investment properties you may be considering.

Once you have an acceptable “yield”, you can then take a closer look at the cash flow forecast and any potential risks. Some investors like to buy houses with a low yield but which are capable of improving. This can increase the property’s capital gain and allow them to increase rents and therefore increase the yield.

If you are considering investing in housing in the Tauranga, Mount Maunganui and Papamoa area, you would be wise to read the ANZ Monthly Property focus for housing trends and data. This monthly publication provides an independent appraisal of property market developments such as housing trends, interest rates, and the demand Vs supply of housing in New Zealand.

Housing affordability figures are also released in The Regional Economic Activity Report 2014, published by the Ministry of Business, Innovation and Employment.

Other interesting sites to check before buying your property are the Real Estate NZ website, which publishes a monthly Property Report, and the Real Estate Institute of New Zealand (REINZ), which also releases a monthly Residential Market Report.

Current data suggests that if you are in a financial position to purchase an investment property in the Bay of Plenty – you will have an easy job of finding suitable tenants for your property. This is due to a housing supply shortage and the fact that most renters are currently unable to afford to buy a home.

Once you purchase an investment property, call Connect Realty Property Managers for your free rent appraisal and Property Management service. We have many tenants looking for quality homes to rent in the Tauranga, Mount Maunganui and Papamoa areas.