Shane Richards owns two homes but rents a property at the Mount and lives there. "It's like a holiday bach without paying the exorbitant prices," he says.Photo / John Borren
Shane Richards owns two homes but rents a property at the Mount and lives there. "It's like a holiday bach without paying the exorbitant prices," he says.Photo / John Borren
Shane Richards owns two homes but lives in neither.
Instead, he rents a three-bedroom house at Mount Maunganui while tenanting his properties in Rotorua and the Tauranga suburb of Brookfield.
The 33-year-old is part of a worldwide trend of young "rentvesters" who are buying in locations they can afford while renting in others where they want to live.
It is a phenomenon in larger cities and now happening in Tauranga, particularly as Aucklanders look outside their overheated property market for regional investment options.
Mr Richards, who is single and between flatmates, says living at the Mount suits his lifestyle.
"I get a much more upmarket area to live, and where I'm living is really close to the beach and downtown. It's walking distance to everything," he says.
He enjoys being able to get to local restaurants and his job at a civil infrastructure firm on foot, and says the social aspect of renting a house at a popular seaside destination is great.
"A lot of people want to be here over summer. It's like a holiday bach without paying the exorbitant prices."
For Mr Richards renting at the Mount also makes financial sense.
Because he does not have a partner or kids, he says he does not need much space and is happy to share a house and living costs with flatmates, whereas his Brookfield property is best suited to a couple.
Mr Richards bought his first property in Rotorua in his mid-20s with his father, followed by the Brookfield one a couple of years later with his stepsister.
He has since sold the Rotorua property, but bought another one there, and has bought his stepsister out of the Brookfield place.
Lindsay Richards.
He has built up enough equity that his investment properties do not cost him anything - rather they supplement his income, and he pays the extra back on to his mortgages.
Mr Richards is considering further rental investments but would not buy at the Mount because, he says, he would need to be "severely negatively geared for rental returns".
He says he operates more on a cashflow model than a capital gains approach, and is following in the footsteps of his father, Lindsay, who is secretary of the Tauranga Property Investors' Association and the Tauranga area agent for iFindProperty, a nationwide company that sources properties for people looking to invest in real estate.
Lindsay Richards is a seasoned investor, owning 18 rental properties in Tauranga and Rotorua, and says rentvesting is "not a silly idea" for young people: "If it doesn't work to buy a property where you live, at least have a property or two somewhere else so you're on the property ladder."
He and other property experts say the number of people buying rental properties in the Bay is increasing - and many of them come from the country's biggest city.
Tauranga Property Investors Association president Grant Harris says, "We are seeing a trend with Aucklanders buying rental properties in the Tauranga region as they are getting priced out of the market in Auckland."
Real estate agents say most Aucklanders buy rental properties in the Bay with a view to living there in the future.
Greg Purcell, owner of Ray White's Mt Maunganui/Papamoa branch, says many Auckland rentvesters are young people thinking ahead to a time when they will have children. "They're future-proofing," he says.
Ross Stanway, chief executive of Bayleys and Eves, says people are keen to get a stake in the Tauranga market and rentvesters are great because they add stock to the strapped rental market.
Lindsay Richards argues Tauranga is a safer investment than Auckland for rentvesters.
"Where's the top of the Auckland market?" he says. "Nobody knows. It's totally wild country. I wouldn't invest there."
Dan Keller, director of Tauranga property management firm RentPro, says most people who approach him now for rental appraisals are Aucklanders. Recent clients have included three Aucklanders in their mid-20s looking to buy an investment property in Tauranga together.
