Investor first, homeowner second
Prolific property investor Nick Gentle has bought his first home to live in.
After decades of investing in property, Nick Gentle has finally bought his own first home, a modest do-up in Rotorua for himself, his wife and son.
The co-owner of iFindProperty, a nationwide buyers’ agency for investors, returned to New Zealand at the start of 2019 having lived in Japan since 2003.
He began investing in New Zealand property while overseas, taking on some major remodelling and renovation projects with the aim of having a business he could return to.
His wife is returning this week from Japan, where she has been stuck since New Zealand’s borders closed while he’s been in New Zealand with their son.
They had been renting since returning last year because they needed flexibility – Gentle’s wife has a business in Japan, and they had planned to keep travelling between the two countries.
When Covid-19 hit and the doors clanged shut, their plans changed. Now they are setting down deeper roots in Rotorua, where Gentle’s business partner lives, and also to be close to family.
‘‘I was renting from a friend, because I don’t believe that the home you live in and rentals necessarily overlap,’’ he said.
‘‘I think, normally, a home you live in for most people isn’t actually a good investment.
They’re very nice big houses with big gardens and that sort of stuff.’’
Many New Zealand houses aren’t great as rentals, he says. The ideal investment property is a bit more basic and hard wearing than the typical family home, with a flat, easy-care section.
As he’s essentially been a solo dad for the past six or seven months he now has a different perspective on life.
As part of that, he decided to buy a house, realising also that it would be cheaper to own a home now than to continue renting.
He only went to see two homes, and went about the process in ‘‘a very investory way’’.
‘‘I quite like scary properties with old carpets and rubbish kitchens and bathrooms, because I know you can turn it into something great.’’
It’s a house typical of the 1960s or 1970s, with three bedrooms, one bathroom, a big laundry, double garage, big backyard and a semi-permanent pool.
‘‘It’s a box, it’s not a very flash house. I’ve got a sizeable property investment portfolio and like some business owners, I didn’t want to buy a massive house that would constrain me from doing other activities.’’
He expects to spend between $50,000 and $60,000 on remodelling, including adding a bathroom and doing up the existing one, as well as refreshing the house with new carpet, paint, lighting and plaster throughout.
‘‘I might be dreaming to try to get it [done] for that, but I have a friend who’s a builder and I’m going to do some of the work myself, maybe.’’
The family hopes to move in in a month or two.
For an investor, buying any property is a business decision and this was no different.
‘‘There was a bit more of a buzz when I settled on it as opposed to settling on something else, and that was more I guess just looking forward to the family being there.’’
The key is to not overspend, or get too emotionally caught up as a buyer.
‘‘I picked up the property relatively easily in terms of not being in any competition because it had been on the market for a while and had some building report issues, and also because it needed quite a bit of money spent on it.
‘‘If you’re paying the right price, $60,000 isn’t much, but if you’re paying with KiwiSaver and you don’t have $60,000 in cash, it’s a deal breaker.
‘‘There was a moisture reading that was high, and I was able to work out it was resolvable – that would scare somebody away who’s a more inexperienced buyer.’’
He’s bought 25 properties over the years to renovate and sell. He currently owns five properties with 10 tenancies.
The biggest renovation he has done cost $450,000, completely gutting and remodelling two levels of a Wellington house that had rot and other problems.
Super cheap mortgage rates, and returning cashed-up Kiwis, plus an ongoing lack of supply, are helping fuel demand for properties below the top end of the market.
‘‘If you’re a first-home buyer and you could rent a property for $550 a week, or you could get a mortgage and your interest payments are $300 a week, you’d definitely try to buy right now, and so there’s a ton of competition for a massive chunk of the market.
‘‘I don’t think that’s dying down. Anyone who can get approval is going for it.’’
It’s still possible to get a good deal, he says, you just have to be patient.
‘‘Often it’s perfectly OK to pay exactly what it’s worth, knowing that your plans are different to the seller’s and being happy with that.’’
‘‘I quite like scary properties with old carpets and rubbish kitchens and bathrooms, because I know you can turn it into something great.’’ Nick Gentle, left