How to make money in Christchurch
Friday, August 12th 2011, 9:54AM 
3 Comments
A question I have been pondering, which may well get one into trouble, is how can property investors make money out of Christchurch.
Yes this sounds crass. Making money out of a tragedy of monumental scale.
But it’s not meant to be as mercenary as making money from other people’s misery.
The big boys are doing this. You just have to look at what is happening with companies like Fletcher Building. It is poised to make many millions from the rebuild.
There was a piece on the TV news the other night about someone, it may have been the government, brought in fund managers and institutional investors, to see what the “opportunities” are in the Christchurch rebuild.
There is no reason why residential investors can’t take the same attitude and see what are the opportunities to make money in the Garden City.
How to make a bob in Christchurch though is something which may require some creative thinking and risk taking.
Clearly there is a demand for rental properties so buying up suitable properties maybe one option. I suspect buying properties that can be remediated and tenanted quickly is another area of opportunity.
So too will be in building new homes. Those who own suitable land to build on look to be in a good position, even though getting builders and materials may prove tricky.
Likewise, adding additional dwellings, such as minor dwellings if they are allowed, is probably attractive.
I suspect there are many other options worth considering too.
Investment theory says those that take on the most risk make the most returns. Christchurch is clearly a place where an investor will be taking on risks, but they may well be worth it.
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Comments from our readers
On 17 August 2011 at 1:23 pm Peter II said:
Unfortunately, The Landlord has followed the hype of all other commentators and stated that "clearly there is a demand for rental properties..." Where are the facts to support this statement ? Have you spoken to any true landlords - as opposed to commercial property managers who want to hype up the situation - to see what the real situation is ? In our rental situation, the market would appear to be quiet at present. On 17 August 2011 at 1:31 pm admin said:
The answer is yes I have spoken to people. One of the most interesting was a Christchurch real estate agent who came and talked to the Rotorua Property Investors Association.
It was a great insight into the Chch property market from an active participant.
On 19 August 2011 at 5:22 pm Richard said:
The biggest problem property investors like myself face is waiting on insurance money. I have property that has been assessed as being over the government cap of $115,000(of damage ). This means that EQC will pay my bank $115,000 and the rest of the repair/or rebuild will be met by my insurance company. My house has been assessed by EQC as costing $320,000 to repair so I am looking at a rebuild. Problem is that my loss of rent insurance (for 6 months) just ran out. I still haven't been paid anything from EQC and am now talking to my bank for a mortgage holiday. Once I finally get the money from EQC I will have some relief in terms of my mortgage payments. But it doesn't stop there. I then need to get my insurance company to do their assessment on the property to see if they agree with EQCs costings. They might not agree and may come up with another figure. I am in a long que to have this assessment done as they are rightly focusing on homes in the red zone first. The point I am making is that most people in Christchurch are in the same situation. Builders can’t start work as insurance settlements are taking so long. No one can sell anything either so it might be hard to buy anything at present. If you want to buy a wrecked house and fix it up yourself there maybe issues on the title to say it has to comply with new regulations eg deeper piling etc. People that are insured would be better to hang on as they will get more from there insurance if they rebuild than if they walk away. At this stage there are so many unknowns. I would agree that there could be some deals. Some people are just so stressed that they just want to walk away. Imagine the poor investors that are stuck with 5 or more uninhabitable properties. $2000 per week expenses going out with no more loss of rent insurance. There will be a lot of people hitting the wall. It is an interesting situation to watch unfold. Commenting is closed
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