Grant Hoey is arguably one of the most experienced Auckland apartment investors in the country. Now in his 10th year as a full time investor and mentor, Grant has witnessed a lot of change in the Apartment market.
Property investors mentored by Grant are making good profits from Auckland Apartments. 2014 was a bummer year for his clients and Grant believes the signs are there for another profitable year in Auckland apartment investing in 2015.
Tell us a little bit about yourself Grant….and why you’re still investing in apartments and mentoring others to do likewise…
I started investing in Auckland City Apartments May 2005 and my ten year anniversary is nearly upon me. Every year has offered up something different. I like the fluidity of the Auckland apartment market. Over the years it’s given me a varied and interesting ‘workplace’ to keep things interesting. I expect the Auckland apartment market to be ‘in demand’ this year and years to come, offering profitable opportunities for investors who know what they’re doing.
How did 2014 compare with previous years in the Apartment investing market?
2014 surpassed all my expectations both with the volume of deals done and the profit made. My mentoring clients and I traded more apartments (buy, renovate, sell) in 2014 and we also secured some very good long term hold positive cashflow purchases. Rental demand is increasing in Auckland, and the lack of rental properties available has pushed up the rental rates.
Auckland apartments have returned better rental yields as a result and with it more investors are now keen on apartments for investment.
What was your highlight for 2014?
The highlight for me was seeing two of my clients in just their second year of apartment investing leave their jobs to focus on apartment investing full time. As their mentor I had a dominant role to play in this outcome. Essentially they could fast track to full time investing in the knowledge that they can continue to receive my leadership, guidance and support. Investors receiving mentoring have more confidence to go for deals and in the process achieve more profit. It’s outcomes like this that motivate me to continue as a mentor and in my field of expertise – the Auckland apartment market.
What was your biggest challenge for 2014?
The biggest challenge for me and my mentoring clients in 2014 is actually still an ongoing challenge – it’s the lending LVR restriction. It really only affects us when we wish to purchase the very small apartments under 40m2 – which are known as studio apartments. Now these studios are sought after so they do represent good deals for us as they offer very very good positive cashflow returns but a purchaser needs to have 50% equity or cash to purchase one of these products. It is in my opinion the banks will wakeup to the returns they can get from these small apartments and review their lending criteria.
What’s the future hold for 2015? Why is 2015 going to be a good year for Apartments?
I expect 2015 to continue on from where we left off is 2014, with the Auckland apartment market to continue to grow in popularity amongst owner occupiers and investors. As we know Auckland property (excluding apartments) is unobtainable for many new home buyers.
Apartments are now the first homes for many wanting to get on the property ladder. There is also a lack of rental properties (including apartments) in Auckland so rental yields are doing well in apartments as their values are not moving upwards at the same pace as standalone properties. This is attractive to investors who want to purchase and get a good ongoing yield from their investment. The next 12 months are looking very very promising indeed.
Meet Grant at his annual Cashflow Apartments Seminar – 15th March 2015.
This blog article was written for PropertyBlogs by Mobilize Mail.