When we first started sharing the idea of the Renovation Road Trip with family and friends, we started to hear and learn about a lot of favourite towns throughout NZ. It showed us there are so many places to visit, each one with its unique attractions, culture and appeal.
So how do we narrow down where to move to when there are so many options? In fact, over 30,000 properties for sale in NZ right now. How do we know we will move to the right place? Or buy the right house? Will we be able to buy, renovate and sell a home and create a profit in any town? What do we do if it doesn’t sell?
So many questions to ask – and a lot of ranging opinions as answers. There is so much discussion and media coverage about the property market in NZ at the moment – it’s a common conversation starter. And Alice and I are very aware of this – because for us one of the biggest risks we face is buying a house that we cannot sell. Do we stay until it sells? Do we sell it at a loss? Do we finish the Renovation Road Trip early? Just to be clear – we don’t pretend to have all he answers! That is the challenge (and excitement) of property. Regardless of how much research or advice you seek out, there is no definite outcome. Its not an exact science, nor a simple calculation to work out – which makes it nerve racking but oh so exciting…
The importance of these questions is about the process of considering the end result we want to achieve in order to negotiate how we approach starting the hunt for a property opportunity. Whilst there are houses all over the country to renovate, not all of them would let us achieve our key objectives for the Renovation Road Trip. So before we start calling real estate agents and creating a watchlist, we need to determine what our search criteria is to best serve our end game – including not losing money!
While Alice was busy getting excited about cute houses that had potential, I started with creating a list of key objectives we needed from a location and property to give our search focus and direction. So before we share about the locations and houses we are focusing on for our Renovation Roadtrip, first I want to share how we narrowed it down from 30,000 properties to determine what a “good buy” was for our unique situation and where we should concentrate. Here is some insight into our search strategy.
Home Base. We know we want to explore NZ and areas we had not spent time in – so, not Auckland. NZ is a large country, so we want to make sure our new home is a great home base. One with its own adventures to be had, but also well located to explore the wider region and part of the country. Mindful also that we want to do this in 2-3 towns, so making sure these are spaced apart to achieve this.
Large enough in size. Whilst we are keen to try a different pace to Auckland – and not spend our time in traffic – this is more about avoiding towns that are too small. The logistics of what we want to do become increasingly difficult the smaller the town. There needs to be enough options for materials, suppliers, products and tradespeople – which are available when needed. Something that may require more time and planning in a smaller town, of which we’re not sure we will have.
We have not put a size on what is too small, but there are a few indicators which help us work this out. Does the town have a major hardware retailer, nation-wide trade companies, a high school, national chain shops and takeaways, is it near an airport or major transport hub. Where larger (nation wid companies) invest, provides more confidence that there is an economy to support this and growth in the town.
Local Property Market. I am mindful of paying attention to data from the town on property sales and wider trends. What are the current market trends, how many listings are there, what are the average days to sell, who is the buying houses in the area, is the population growing, what are the rental returns. We want to make sure we can add value and sell the house quickly when the time comes - so making sure we are based in a place to reduce this risk.
Property Value. Whilst we are fortunate to be able to do this adventure, there is a limit on what we can buy a house for. We can’t afford anything we want. And we also don’t want to buy in areas of a towns at the extreme ends, ie, the most expensive or cheapest suburbs. We want to make sure when we do sell we capture a wide market, and our strategy is to focus on the middle of the market. As a rough guide, our aim is to buy below the median house value for the town, then after adding our touches, selling above the median value.
Reno Project, Of course! This is really the top of our list, as we can’t do the Renovation Road Trip without a renovation. However, the do-up house we find will need to be liveable as we will move in straight away and be a manageable project for us to do ourselves (meaning a cosmetic makeover).
So with this being the context of our search, it’s time to start looking at some towns across NZ and find some houses. And hope we don’t get too emotionally attached ;).