South Auckland returns?

SB asks:
(updated on Friday, April 20th 2012)

I am 23 years old and have just been pre-approved for my first home. I have a $22,000 deposit. I want to get into long lerm property investment and build up a portfolio over the next 20 years. I am looking at Manukau City due to the lower prices of $220,000 to $240,000 for three bedroom/one bathroom homes that can return $320 to $350 per week rent. Is this a smart choice or are there other factors that I haven't really thought about?

Our Experts Answer:

First you need to decide why you are investing in property and what it is that you are wanting to achieve by investing in it. The Manukau City region has more lower socio economic areas than other Auckland regions. The benefit of this is that generally the achievable yields are higher but the negative is that you can have more tenant problems if you or a property manager don’t manage the properties effectively. The Manukau City region is expected to continue to have strong population growth moving forward which is a positive for house prices. It is a large area though and there are huge differences between investing in say Dannemora and Clendon Park, both of which fall under this area. Figure out why you are investing and then try and research areas to find out which suit your requirements the best and then become an expert in these areas.

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