Property Investment Advisor NZ

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property investment advisor nz

If you’re new to my page, my name is Matt Willoughby. I’ve been a financial adviser since 2013, starting at the ripe old age of 24.

I currently own 8 rental properties and I (now) have a crystal clear plan to reach 20 within the next 15 years (though likely only needing 10 years). More importantly, the gross yield across my portfolio is around 9.50%. This means that even in times of higher interest rates (July 2024), I don’t have to personally ‘top-up’ any of my investments.

I’m proud to say my investment strategy has absolutely nothing to do with my properties increasing in value or the market going up over the years to come. Selfishly, I actually kind of want interest rates to stay high for longer!

Despite my current level of success, I have made some absolute blunders along the way. Through my lived experience, I hope that by documenting these wins and failures, this will resonate with other fellow investors and inspire those wondering how to best start or continue their investment journey.

PROPERTY INVESTMENT TIMELINE

– April 2015: Purchased my first home, a 2-bedroom unit in Ellerslie.

– October 2015: Using equity and savings, I purchased my first investment property: 2 dwellings on 1 title in Morrinsville.

– Early 2016: Confirmed I could easily subdivide the Morrinsville property into 2 separate titles, nearly doubling its value.

– October 2016: Upgraded the family home to a 3-bed townhouse in Pakuranga Heights, keeping the Ellerslie unit as a rental (Mistake #1).

– December 2018: Entered into an agreement to purchase a new build townhouse ‘off the plans’ as an investment property (Mistake #2). I was convinced by a top real estate salesperson it was a ‘great buy’ and ignored the fundamentals.

– June 2019: Upgraded the family home again to a house in Howick, keeping the Pakuranga property as a rental (Mistake #3).

– 2020: With COVID-19 making money cheap, I purchased a 2-bedroom unit in Papatoetoe as an investment (Mistake #4). Used non-bank 2nd-tier lending and fixed short (Mistake #5). Renovated and converted it to 3 bedrooms. Decided to keep it as a long-term hold instead of selling (Mistake #6).

– 2021: Entered into a contract to build 2 new dwellings at the Morrinsville property. Chose a cheap contract with a builder with little project management experience (Mistake #7). 

  • October 2021. Settled the new build property for long-term hold (Mistake #8). 
  • Pulled the trigger on a 2-lot development project without a clear strategy or thorough due diligence. The project broke even. Just!! (Mistake #9).

– July 2022: Purchased bare land for a spec build. Engaged an expert builder but the location and market affected the project, resulting in only a small profit (Mistake #10).

– December 2022: With interest rates and CCCFA changes, I decided to sell Ellerslie, Papatoetoe, and Pakuranga properties. Selling them earlier at the time would have made more profit, but it was wise to pull the trigger asap and not consider what they ‘might be worth’ in say 5 years time. They were costing $52,000 per year to own!

Current Investments

  • Morrnsiville x 3
  • Te Kuiti x 2
  • Manurewa New Build x 1 (this will be sold and replaced with something far better)
  • Levin x 2

I have most recently settled on an investment property in Te Kuiti with a gross yield of 11.30%. After a simple renovation and rent increase, I expect a registered valuation to be an additional $100k-$150k. I suspect a district plan change in 7-10 years may allow for subdivision, which would be a nice bonus. The property has a combined rent of $840 per week at a cost of $385,000.

Near Levin, I am relocating 2 houses onto 1 title, adding a cabin on each, and converting them to 2 bathrooms. On this basis the combined rent is $1,300-$1380 per week at a total cost of $620,000.

Here are my strict criteria and buying decision. 

  • Gross Yield of no less than 10.00%
  • Must have an ‘add-value’ component e.g future subdivision potential or minor dwelling / relocatable.
  • Must require little to no involvement 
  • Must completely ‘wash its own face’. This means the rent must fully cover the rates, insurances and the mortgage repayments (based on Principal & Interest as if on a 20-25 Yr loan term at 7.00% Interest!). 

You see the 3 simple fundamentals with investment property is:

Cashflow

Capital improvement

Capital gain

My advice is to only focus and chase the first 2 and chances are #3 will just happen!

P.S. For those who know me well, I’m not one to brag and I am always learning. Please understand this is not me showing off but rather showing folks when I give investment advice I have learnt a few things along the way and have lived experience!

Best Regards

Matt

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