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Ready-made property investment portfolio offered for public sale

Tags: Nelson Residential

A ready-made residential property investment portfolio of ex-Forest Service homes has been placed on the market for sale.

The portfolio features six three-bedroom homes and one four-bedroom home situated on 1.4 hectares of land adjoining State Highway 6 running through Rai Valley Township 40 minutes from either Nelson or Blenheim.

Rai Valley is a self-contained rural township servicing a huge dairy farming catchment together with active forestry holdings, as well as supplying Pelorus Sounds, Tennyson Inlet, and Okiwi Bay holiday destinations. Constantly busy and quietly stable, Rai Valley therefore remains untroubled no matter the economic climate.

Combined, the seven freestanding homes provide 910 square metres of living space. Tenancy terms on the individual properties range from periodic to fixed terms of up to two years with - rents ranging from $210 per week to $240 per week. One tenant has been in residence for 15 years, with a neighbour enjoying more than 11 years on site. Currently all the houses are fully tenanted.

The substantial parcel of land and dwellings is being marketed for sale for $995,000 through Bayleys Nelson. Salesperson Jeremy Matthews said at that pricing level, and on current rentals, the portfolio was generating almost $83,000 of cash-flow – equating to a return 8.32 percent per annum.

“All of the property market talk in recent years has been about the Auckland residential property scene, and how investors are cashing in on huge capital gains up there,” Mr Matthews said.

“Well, here’s an opportunity for local investors to secure their own ready-made residential property portfolio. To create anything similar to this landholding – with all the properties being easily manageable from one location – would normally take years to acquire”.

“The size and make-up of the portfolio means it could be purchased and run as-is by a ‘novice’ investor, or for an experienced property developer the subdivision has considerable development upsides.”

The grouping of homes has been owned by a private trust for 19 years. The trust is now winding up some of its operations, with proceeds from this sale to be distributed to the various locally-based trust beneficiaries.

The New Zealand Forest Service was established in 1919 and was first known as the State Forest Service. It was responsible for the management of New Zealand's state-owned forests – including forestry, conservation and recreational functions.

The department was abolished in 1987 and its assets – including workers’ houses and the land they sat on were sold into private ownership.

“The Rai Valley homes are typical of the 1960s-style dwellings built and maintained by the Forest Service. All the residences are solidly-built on substantial sections, and are very functional without being flashy,” Mr Matthews said.

“As we have seen on reality TV shows like The Block NZ and Our First Home, this style of home with its ‘solid bones’ can be easily extended, expanded and remodeled into stylishly refurbished new dwellings. That could be achieved with the homes in this portfolio.”

The estate lies within the heart of Rai Valley Township, seconds from the famous and aromatic local bakery. Rural hinterland borders the community and many of the homes. Mr Matthews said the configuration of this land and buildings meant there was also considerable potential for further dwellings to be added to the estate on what are currently barren sections.

“Under that dynamic, a whole new category of investor could come to the fore… property developers,” he said. “The existing sections could be further subdivided down, or the individual sections and homes could be sold off in any multitude of formats,” Mr Matthews said.

The land also contains its own water bore - which not only services the homes to minimise their water rates, but is also leased to a neighbouring property owner who pays $600 a year for the privilege.

Mr Matthews said potential purchasers could consider the vendor’s offer of a “very competitive” financial arrangement to assist a purchase.

For further information on the sale of the ex-Forest Service homes, contact Jeremy Matthews. Phone 03 546 3569.

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