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Changing Fortunes

A run down manor house and adjoining motel in Whanganui have been given a new life due to the hard work and determination of a Raglan-based investor couple, writes Joanna Mathers.

By: Joanna Mathers

1 September 2021

Whanganui’s grand manor house had seen better days. Built in 1840 for settlers Andrew and Margaret Duncan, the once grand home was created from pit-sawn heart tōtara, with 24 rooms and expansive stables.

But the centuries were not kind to the manor, which was named Tōtarapuka after a Māori settlement in the area. By 2019 it was run down and dated. A motel had been tacked onto the 5,500m2 section, and the three freestanding homes (some with punch holes in the wall) were victims of ongoing deferred maintenance.

Belinda Beatty (who works with Wealth Mentor) and Stephen Feast came across the property when a real estate agent they worked with brought it to their attention.

As buy and hold investors, the couple saw that the property had loads of potential. They had previously bought undesirable dwellings, adding value and more stock to the rental market, and they felt they could do the same with this.

Beatty (who is ex Australian air force) is “nothing if not logical”. Although the market value of $1.7 million was going to have to be almost entirely funded by a mortgage, the pair established multiple exit strategies and ways of adding value early on. The manor house featured four apartments; there were eight units in the motel complex; and the houses featured a one-bedroom duplex, another duplex turned into a four-bedroom house, another four-bedroom property, and a relatively modern three-bedroom dwelling.

One of these houses had already been sectioned off and subdivided, and was on a separate title.

There were other options for adding value. The size of the property allowed for more subdivision and the renovation of the motel units would allow them to be quickly tenanted.

But the banks weren’t interested. After some back and forth they finally secured a 20-year principle and interest mortgage, with sky-high repayments. Settlement took place in March 2020 … the same week that Beatty gave birth to the couple’s first baby.

And to make things even more complex, the country then went into level 4 lockdown.

“We had stipulated that we would take vacant possession,” says Beatty. “And we had plans to renovate the property over a three or four month period. But we then were thrust into a lockdown that had no end in sight.”

Based in Raglan, they couldn’t do anything over lockdown. So, they thought about things differently, offering the “now” empty motel, houses and apartments to people who needed urgent accommodation over the lockdown period.

“We contacted the local authorities and asked if they could use the property. We just handed over the keys … Unfortunately, there was quite a lot of damage done to the property over that period, but it ended up being a cost neutral proposition and we were happy that we could help the community.”

When the lockdown ended, the couple were finally able to start the renovations. Project managing from Raglan, Beatty and Feast were able to provide Whanganui tradies with some decent work.

It made sense to start off with the simplest jobs, so they could get at least some of the place tenanted and paying its way. The houses were the easiest fixes, with simple cosmetic work that was easy to complete. The houses were ready to be rented within a few weeks. They are all currently tenanted and bringing in between $310 and $460 a week.

Once the houses were ticked off, it was time to turn attention to the motel units. The earlier owners had done some work in the units in order to make them suitable for residential use, but others were in their original state.

“Three of them were still motel units and needed to be completely renovated, but the rest just needed cosmetic tidy ups,” explains Feast.
“We completed a unit each week for two months over July and August,” Beatty adds. “There is a huge demand for accommodation in Whanganui, so the units were tenanted really quickly and are rented out for between $260 and $280 a week each.”

The villa was the last area of focus. The house isn’t historically listed, and had been turned into apartments in a piecemeal fashion over the decades.

One of the apartments was gutted (“A Tonka truck was holding up the roof above the shower,” says Beatty). The remainder were dated, but liveable. These were given a quick spruce up and the gutted apartment was resurrected.

There are now four apartments, ranging from one to five bedrooms in size. With such a huge land parcel, each apartment has its own outdoor space.

Beatty says that the grounds are magnificent, and are being brought back to their original splendour, “We’ve just spent $10,000 taking rubbish from the property to the dump,” explains Feast.
The apartments now fetch between $280 and $450 a week in rent. The property has changed from commercial to residential use and Beatty and Feast have restored the manor’s former name (Tōtarapuka). It’s part of a “brand” reset for the former Acacia Park Motel. They have invested in beautifully designed signage (“We took down the garish 80’s motel sign,” says Beatty) and the improvements have really changed the atmosphere of the property.
“It really used to be dark and dingy,” Beatty adds.

Now, she says, the tenants are friends; a groundsman keeps the place clean and tidy; and people gather at the picnic tables at common eating areas.

They have added significant capital value since the renovations took place. “I tell people it’s increased in value by seven figures,” says Beatty.

And they are also making a difference in their local community, with the addition of 16 affordable rentals to a tight market.

“A huge part of our business model is to improve our own quality of life; but we have discovered that what we do can really give back to the community as well,” says Beatty
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