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Insights from our first Investment seminar and looking to 2021

By David Kneebone on 2020-12-20

 

David cropped

 

Here at Lodge City Rentals, our office continues to hum with activity in the lead up to Christmas. Enquiries continue to hit their now regular highs, with 800 enquiries last week for only 45 properties.

With all this demand, we’re seeing an upward pressure on rents and our vacancy rates are sitting at the same levels as last year, despite our portfolio increasing by 300 properties.

At the start of the month, we held an Investor’s Club seminar at our Lodge auction rooms. We wouldn’t normally hold an event like this so close to Christmas, but as we all know 2020 has not been a normal year!

The event was well-attended by over 50 investors, all excited about the great opportunities in the current market. I’ll discuss some key points from the event in more depth, and some takeaways to apply to your investment strategy.

I’ll then briefly mention some exciting developments and why 2021 promises to be a pivotal year.

 

Investment seminar wrap-up

Talking to attendees, the seminar appealed to both experienced investors with multiple properties, and those commencing their investment journey, with all providing positive feedback.

Andrew Flexman of Forsyth Barr kicked off the evening with his presentation’s theme: Investment in a low interest environment.

Andrew has the horsepower of one of New Zealand’s top analytical teams behind him, which gives him access to a wide range of data and information to provide evidence for his thinking.

His message was clear: a balanced and diversified portfolio with a long-term outlook is the key to successful investment.

I then gave a presentation based on my thoughts and philosophy on residential property investment, with an emphasis on the Hamilton market.

During my 22 years as general manager of Lodge City Rentals (before stepping down), the assets under management grew from 969 properties worth $150 million, to over 3,400 properties with a combined value of $1.7 billion.

I now spend more of my time in one-on-one conversations with landlord clients, helping them to expand their portfolios.

I have seen many of our property owner clients achieve success in expanding their portfolios, and it’s gratifying to see a lot of happy retirees enjoying a comfortable retirement.

I wholeheartedly agree with Andrew that long-term is the key to any investment strategy. As an example, I discussed with the audience how $50,000 invested in Hamilton residential property back when I started with Lodge in 1998 could now be $1.6 million, if leverage and reinvestment was used wisely.

In my 22 years at Lodge, I’ve seen several ‘unprecedented’ events including the Asian Financial Crisis of 1998/99, the September 11, 2001 attacks, the Global Financial Crisis of 2008-09 and of course our current unprecedented event, the Covid-19 pandemic.

After each of these events, the housing market always bounces back. In July of this year, I addressed the Lodge sales team with the message that the property market would remain strong – I think the daily media stories about the ever-increasing highs prove that prediction.

I have to admit though, even I was surprised at the recent surge in the market. However, the message remains the same as in July; record low interest rates, strong demand, continued population growth and returning Kiwis all make for a positive outlook on the Hamilton property market.

 

Looking to 2021

When casting our eyes to 2021, there’s already some exciting opportunities on the horizon for investors in Hamilton real estate. One of these is the Rawhiti Village development in Frankton, with 795 total properties coming to the market.

In my eyes, 2021 will be pivotal for many investors looking for a return on investment that can provide a sustainable lifestyle in retirement, without leaving you exposed to undue risk and stress.

Next year we plan to hold more of these events, partnering with Forsyth Barr to provide valuable information to help our clients achieve their investment goals.

From the Lodge City Rentals team, we wish you a merry Christmas and a restful start to the new year. We look forward to working with you in 2021.

Until next year,

David Kneebone

Director, Lodge City Rentals

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