It’s been an interesting time for our 2019 profile subjects – Joanna Jefferies catches up with them to find out what they’ve been up to and what their plans are for the year.
1 January 2020
THE PLAN FOR 2019 was to sit back and take a break for full-time investor couple Trish Keogh and Kael Blake. When we last spoke to the pair a year ago, they had amassed a portfolio with 13 income streams over a period of just four years and were living off their rental income. So with that kind of tenacity and drive, it’s nonwonder they haven’t ended up taking a break at all over the past year.
It wasn’t for lack of trying though: with a holiday from renovations at the forefront of their minds, at the start of 2019 they bought a 20-foot storage container, sectioned off the backyard at their house, piled their belongings into it and rented out their Masterton home. They set off on a full-time house-sitting holiday. “The plan was to see a bit more of New Zealand by house-sitting,” says Keogh. “We did it for a couple of months, but in April we found a house up in Taihape and it was just so cheap!”
She’s not exaggerating – the house had a $55,000 price tag due to it being in a designated slip zone (yet the council has monitored the site for 10 years and recorded no degradation). It’s their base at the moment, but there are plans to renovate and rent it out.
Since that purchase, they’ve also gone into a joint venture partnership with a new investor. They bought a sevenbedroom house in Masterton, which the group of three renovated over three months. The property was purchased for $400,000 and rents on a roomby- room basis.
They also bought a property in Lower Hutt recently, which Blake’s dad was renting. The opportunity came up to buy it at a good price ($345,000) and the landlord was keen for them to purchase it so that Blake’s dad could continue to live there.
So what’s next this year for these active young investors? “The plan at the moment is to have a bit of a break, seeing as we didn’t do it last year,” laughs Keogh.
‘The plan was to see a bit more of New Zealand by house-sitting. We did it for a couple of months, but in April we found a house up in Taihape and it was just so cheap!’ TRISH KEOGH & KAEL BLAKE
WHEN WE SPOKE to Auckland investor Tua Saseve last year he was in the process of securing his third rental property. He had plans to purchase more properties in 2019, but his work with GRA’s Auckland Property Mentors has meant that his focus has been on securing deals for clients.
It was a tricky market to make a buck in last year in Auckland, but Saseve was part of managing 60 successful deals. Saseve’s success led the Legacy brand (which operates property investment education and mentorship overseas) to approach him. Auckland Property Mentors are now the Australasian provider for Legacy and Saseve has worked hard on putting systems and processes into place so that next year he will have some spare time to get back into investing in his own portfolio.
His plan is early in the new year, to finally get back on the tools, so to speak – and he’s got some big goals for the year.
“From a trading perspective I’m looking to really ramp that up. [My business partners and I] set a goal to do 20 trades. We’ll hand pick any we get that are good enough to hold.”
He’s excited to take on more of a “head mentor role” in 2020, which will enable him to develop his own portfolio further.
THE STATIC AUCKLAND market and booming Rotorua market last year meant it was an opportune time for Auckland investor Lorraine Rishworth to reassess her portfolio. She made the decision to sell both of her Rotorua rentals – one had been contaminated with meth and had been completely renovated with the cash from the insurance pay-out and the other was “quite tired – I thought rather than spending any money on this one, I’ll cash up”.
‘If I hadn’t got into property there’d be no way I’d be mortgage-free on my own house and looking to do up my kitchen with cash’ LORRAINE RISHWORTH
She did just that, selling one for $285,000 and the other for $300,000. (She’d purchased them in 2012 for just $130,000 and $152,000 respectively.) Some of the profit is being held to pay down her other mortgages when they come up for renewal, while she’s kept a little nest egg to do up the kitchen in her own home.
The cash injection also left room to purchase again, which she did in June. This time it was a two-bedroom unit in Papatoetoe, “which was a total do up”. Because the footprint was large at 120m2, Rishworth saw an opportunity to convert the kitchen into a third bedroom. She then modernised the unit from top to toe. The purchase price was $545,000 and the eight week renovation project cost $90,000. She’s had it valued verbally at between $670,000 and $690,000 and will rent it out at $570 per week.
While the yield may not be high and she’s cut down from four rental properties to three (plus her own home) this year, her strategy to build a high quality portfolio is on track.
“I’ve had a look at the quality of each property now, and I feel I’ve got a much better quality of property and also tenant. I feel I’ve lifted my game.”
This year she’ll keep an eye on the market and see where it takes her. “It’s all about having choices now – choices that I would not have had, had I not done this. If I hadn’t got into property there’d be no way I’d be mortgage-free on my own house and looking to do up my kitchen with cash.”
NOT ONE TO do anything by halves, when we last spoke to Invercargill investor and trader Nick Irons, he was in the middle of growing a 20 employee property trading company (involved in carrying out joint venture property trades), and developing a kitchen and bathroom showroom.
Things have changed quite dramatically since then for the entrepreneur, having sold off the retail side of that company, and he’s now engaged in contract work for Housing NZ, doing up houses for them.
It means the staff numbers have been cut in half, of which four are doing the contract work and the others are involved in Irons’ personal flips. Having the income from the new business means Irons can now focus on his own trades, rather than do joint ventures and renovate to line others’ pockets.
The other aspect that has made trading more accessible is improved lending conditions, says Irons.
“Trying to get standard bank lending on trades was not easy unless you had a huge amount of stuff with them, but a lot of lenders have relaxed up now with interest rates dropping, and people having more options. A lot of the second tier lenders are a lot more flexible.”
He expects to do around 15 to 20 trades this year, and currently has six underway. He’s also recently combined forces with a local property manager and real estate agent, and they’re shortly launching a new local property management business, with the aim of moving into sales, too.
This year TV personality Walter Neilands had a bit of a break from investing and immersed himself in a range of media, acting and speaking gigs. He participated in cult celebrity dance show Dancing with the Stars, had a spot on Shortland Street and is shortly filming a television commercial. He also went on a speaking tour of New Zealand schools, talking about sustainability and wellbeing.
“I’ve had all different bits and bobs all over the place. I haven’t grown my property portfolio yet, but that’s currently what I’m working on now.”
The problem with a media career, in terms of growing a portfolio, is the sporadic nature of employment associated with that industry. To this
end he’s in talks with a friend about investing in a business to provide that stable income; he’s also currently writing a book, which will be a guide to buying your first property, aimed at first home buyers and new investors.
Neilands still has his three properties that he acquired while employed by Sticky TV, which was a strategic move at the time. He’s currently involved in making his next move in property, and is working with a mortgage broker to line up a purchase outside of Auckland.
He’ll have around $300,000 to spend and will look for something with a decent yield. “My philosophy is to invest whenever you can. If I have the opportunity to raise the money then I will, and I’ll invest it.”
Campbell Crawford & Penny White
CAMPBELL CRAWFORD AND Penny White are knee deep in their first renovation. But the Masterton investor couple have an advantage that others
don’t: he’s a builder and she’s an electrician. They’re now between “half and three quarters” of the way through the complete overhaul and it’s been fun but “definitely a learning curve” laughs Crawford.
They purchased the Carterton property for $250,000 last year and project they’ll spend $20,000 on the complete renovation. They’re adding a fourth bedroom and an en-suite and are replacing everything from top to bottom, while they live on site.
Crawford predicts they will finish the renovation sometime in February and says he thinks the minimum end value will be $375,000 “but I’m expecting $400,000”.
Once it’s complete the couple will rent it out for a minimum of $400 per week.
They’ve both been working 45 hour weeks in their day jobs during the renovation, which has meant a lot slower progress than they had initially thought, in fact, the reno will take six months longer than projected.
‘We’ll buy another one and literally do the same thing until we retire – potentially not [another] live-in scenario, though’ CAMPBELL CRAWFORD & PENNY WHITE
The pair, who started their portfolio less than two years ago, chose to take up apprenticeships in the trades for the express reason that they could save on costs for projects such as these. So, despite the longer timeline, the success of this renovation has been a validation of their strategy. The equity gain means they’ll be able to rinse and repeat – although with one key difference.
“We’ll buy another one and literally do the same thing until we retire – potentially not [another] live-in scenario, though.”
“THREE YEARS AGO I foresaw that the market was going to lift – and it’s been doing $1,000 per week, and it will top off in May,” predicts Palmerston North investor and accountant Shane Storey.
For those who pooh-pooh predictions such as these, it may be worth a closer look. Storey’s own portfolio is lifting in value $1,000 per day at present and when we spoke to him last he predicted the market would increase another 40%.
“We’ve seen 20%,” he confirms, “we’ve got another 20% to go.” As above, he expects this will happen by May.
Predictions are a bit of a pastime for Storey, but hopefully soon they’ll become an income earner.
He’s been developing an online interest rate calculator that takes data from birth rates to predict interest rates.
“At 42 you’re at your peak mortgage, and there’s logic behind that, because at 28 on average you have your kid, and at 14, the kid’s outgrown the house,” he says.
So you buy your second house at 42. Your second house is your peak mortgage. So if you follow the 42-year olds, it tells you where the interest rates are going to be on a year-to-year basis.”
Storey says he’s been running the calculator for seven years and “it’s been spot on”. He expects the calculator will be up and running for the public to use in six to 12 months.
Currently in his own portfolio, he’s not active. He says that’s because in his chosen market – the Palmerston North student accommodation market – 21 years ago there was a dip in birth rates. Correspondingly he found it difficult to fill his rentals last year.
“For the next three years [birth rates] drift down and 2023 is going to be a difficult year.“
“But after that year there’s going to be eight or nine years of extraordinary growth.” As such, he says it’s not the right time for him to buy in Palmerston North, but he’ll be ready when the data lines up.
Jules & Sean Thomas
IT’S BUSINESS AS usual for Jules and Sean Thomas and their four kids – they’re just making sure their rentals are up to the 2021 standards, so there’s been some insulating upgrades going on.
There’s been no change of tenants, due to the tight Hawke’s Bay market. “The fact that people aren’t moving around is an indication that there’s just no rental properties out there,” says Jules.
She’s noticed that rents have crept up “quite dramatically” in the Hawke’s Bay and she’s just renewed three contracts but hasn’t raised the rent because she feels the rent is fair and wants to hold on to her excellent tenants.
Jules says they’re always looking to buy, and 2020 will be no different, but currently their focus is on debt consolidation.
If they do buy, they’ll look to diversify their property type, and buy two bedroom
homes. “I think there’s a demand for it, you get a lot of single mums and dads, often with one child, and we’ve had two-bedroom houses before, and never had any issues renting them out.”
Other than that, Jules is considering the idea of starting a property management business, because she’s interested in “ethical land-lording” and she’s a proponent of taking excellent care of tenants.
‘The fact that people aren’t moving around is an indication that there’s just no
rental properties out there’ JULES & SEAN THOMAS
The other avenue she’s investigating is managing apartments – as they’ve had “no end of trouble” with property managers who simply don’t understand the body corporate requirements for their Napier apartments.
Thomas Ward & Jessica Driver
LAST TIME NZ Property Investor spoke to Thomas Ward and Jessica Driver, they were in the planning stage for multiple projects, and they’ve made huge progress since then. Their Ellerslie, Auckland, property now has design and resource consent plans to build four townhouses and they’re working on building consent.
It’s currently being rented out while that process is underway, meanwhile they’ve recently purchased a single dwelling property in Te Atatu Peninsula that they will soon renovate. The large section means they will be able to build two to three townhouses at the back in the future and they’re currently involved in the resource consent process for this.
When we last spoke, the couple and their six staff had 34 projects underway at their design and development firm I Am Developer, but they’ve since scaled this up, with 70 properties currently between the concept design and construction stages.
If that doesn’t keep them busy enough, they’re also going through the consenting process and awaiting approval from Housing NZ (HNZ) for the development of two sections in Mangere and Otahuhu (part of a joint venture) that will eventually be sold to HNZ. It’s an important project for the pair, for several reasons.
“We believe social housing is an important part of our community and while it is often designed and built with strict financial controls, that doesn’t mean it can’t look good. This is still a big part of our ethos in general – creating value through medium density and good design.”
In this vein, Driver has continued to work with women through her mentoring group Property Gals, which has been really rewarding.
“It’s been awesome seeing the shift, one young woman came to me thinking she wouldn’t be able to ever get a property. I’ve mentored her across the last year on and off and even just having the reassurance has given her the confidence and inspiration she needs to save and get looking. She’s all set to buy her first property – which will be a smart buy with equity potential.”
Driver has enjoyed working with the women at Property Gals so much she’s
started a boutique consulting business called Howard Hunter to help people through the process of buying a home or investment.
“The highlight is working with people who have never owned a home and feel like they can’t, helping them prove that theory wrong and secure a smart buy along the way.” ■