David Whitburn

Another good week, and fantastic weekend shaping up. I negotiated a super deal for a client 2 houses on the one title, supervised a do up for a client, and arranged a multitude of things for Fuzo’s contruction arm.

We have been doing a lot of research into what will make investors the most money at the moment, and think development is shining out as the leading strategy in today’s environment with such high interest rates and a likely market correction at some time shortly, which takes gloss of the long-term investment (buy & hold) strategy. Deals must be analysed on a case by case basis as to whether subdivision or minor dwellings are the best form of development for you.

The highlight of the week was undoubtedly the time I spent in New Plymouth as a guest of the Taranaki Property Investors’ Association (“TPIA”). I had not been to New Plymouth for 10 or 11 years so I really enjoyed the visit. The serenity of Mt Taranaki and the beautiful iron sand beaches, rolling hills and lush forests were showcased. It is a great place to live.

I was hosted by wonderful and generous clients Nicola and Greg Loft, and I really enjoyed staying at their beautiful farm. I was able to see some of their properties and was very impressed by their renovation systems and portfolio. Keep up the great work – I am sure you will.

TPIA

At TPIA I spoke on property development (of course) and the importance of diversification in an investors portfolio. I was impressed with the professionally run meeting TPIA held and impressed that over two-thirds of their membership attended on the night. TPIA has a good executive and are undergoing a metamorphosis and have a quality line up of speakers and events this year that the larger associations would be envious of.

Mixed Strategies

On the night I talked about how I got started into property investment, driving my granny to her rentals as when she lost her licence, I got mine. I stated the example of her property bought in 1955, a farm in Kohimarama purchased for just under $1,000 pounds, now worth nearly 2 million dollars.

I stated that the buy and hold strategy is fantastic – look at the example above. However to compliment the buy and hold strategy which builds your asset base – trading (eg from development to create equity) is a fantastic strategy.

Diversification

I touched upon the importance of diversification particularly for older investors. I mentionned that investing in the area you live in is great, however why not consider some diversification in the types of assets you old (eg flats, houses, land, commmercial) and in areas too. Why would you not invest in the top capital growth area in New Zealand over time, that is Auckland. I stated that younger investors are more likely to be able to have less diversification in their investment portfolio, yet older people (eg my 89 year old granny) are best not to have all their assets in one basket. So she has her eggs in over 50 baskets professionally managed – shares, managed funds, mutual funds, REITs, bonds, commercial paper, TDs, cash, forestry, mining, government stock etc.

I guess to be a bit deep in relation to your investing, I leave you with this thought: Wherever you go, you are there.
(ie. you choose your destination)

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