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Hard road to success

One Hawke’s Bay investor’s road to success took him on a challenging journey but now he’s sitting pretty and is sharing the investing rules that got him there.

Monday, June 19th 2017, 12:00AM

by The Landlord

Hawkes Bay investor Richard Gruiters

Engineer and father-of-two Richard Gruiters knows a lot about successful property investing – but he had to learn most of it the hard way.

He’s ridden the highs and lows of the property cycle, built a fantastic self-sufficient portfolio and he’s using it to create the lifestyle he wants for himself and his family.

Gruiters’ is a classic story of Kiwi property investment. It starts with the book that sets so many property investors on their path: Rich Dad, Poor Dad.

Hooked, he read the whole series, then started on every other investing book he could lay his hands on, “and I haven’t stopped since.”

The idea of building wealth, solving problems and crunching spreadsheets appealed enormously to his engineering mind-set.

Gruiter’s property journey got off to a good start. Using a positive cashflow model, he bought five properties in the early 2000s and everything was going smoothly.

But then he says: “I probably got a bit cocky.”

He bought more expensive negative cashflow properties hoping to see big equity gains.

No such luck: the global financial crisis hit and prices in Hawke’s Bay not only didn’t grow, they actually declined.

He had to sell some properties to get some balance back into the portfolio, ended up with a much reduced portfolio and had to start again with a more conservative approach.

Since those days, he has successfully rebuilt his portfolio and in this month’s issue of NZ Property Investor magazine he explains how he did and shares the highs and lows of his property journey.

Here are Gruiter’s five top investing rules:

1. Don’t speculate. “I’ve learnt my lesson about going for capital gains that don’t turn up.”
2. Properties must generate surplus cashflow after all the costs are paid.
3. All loans should be principal and interest. If the sums don’t work without paying any principal, Gruiters doesn’t do the deal.
4. Spread your lending across more than one bank.
5. Stick to your investing rules.

To read more about Gruiter, his property journey and his investing rules, click here to get the digital issue of NZ Property Investor magazine.

Subscribe to NZ Property Investor magazine here to get great stories like this delivered to your mailbox every month.

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    “Hi JP, good analogy of what would be a sensible way to approach the new landscape for March 2021. Governance does not have...”
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    “@Adviser1 this is part of the discussion we need to have as an industry. It is also part of the message we have with the...”
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    “Thanks Gavin, appreciate your comments. So by engaging a compliance consultant and having the necessary policies, procedures...”
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AIA 4.55 2.55 2.69 2.79
ANZ 4.44 3.15 3.25 3.39
ANZ Special - 2.55 2.69 2.79
ASB Bank 4.45 2.55 2.69 2.79
Bluestone 3.49 3.49 3.49 3.49
BNZ - Classic - 2.55 2.69 2.79
BNZ - Mortgage One 5.15 - - -
BNZ - Rapid Repay 4.60 - - -
BNZ - Std, FlyBuys 4.55 3.15 3.29 3.39
BNZ - TotalMoney 4.55 - - -
CFML Loans 5.50 - - -
Lender Flt 1yr 2yr 3yr
China Construction Bank 4.49 4.70 4.80 4.95
China Construction Bank Special - 2.65 2.65 2.80
Credit Union Auckland 5.45 - - -
Credit Union Baywide 5.65 3.95 3.85 -
Credit Union South 5.65 3.95 3.85 -
First Credit Union Special 5.85 3.35 3.85 -
Heartland 3.95 2.89 2.97 3.39
Heartland Bank - Online - - - -
Heretaunga Building Society 4.99 3.85 3.95 -
HSBC Premier 4.49 2.45 2.60 2.65
HSBC Premier LVR > 80% - - - -
Lender Flt 1yr 2yr 3yr
HSBC Special - - - -
ICBC 3.69 2.55 2.65 2.79
Kainga Ora 4.43 ▼2.93 ▼3.07 ▼3.24
Kiwibank 3.40 3.30 3.54 3.54
Kiwibank - Offset 3.40 - - -
Kiwibank Special 3.40 2.55 2.79 2.79
Liberty 5.69 - - -
Nelson Building Society 4.95 3.45 3.49 -
Pepper Essential 4.79 - - -
Resimac 3.39 3.45 2.99 3.35
SBS Bank 4.54 ▼3.05 3.19 ▼3.25
Lender Flt 1yr 2yr 3yr
SBS Bank Special - ▼2.55 2.69 ▼2.75
The Co-operative Bank - Owner Occ 4.40 2.55 2.69 2.79
The Co-operative Bank - Standard 4.40 3.05 3.19 3.29
TSB Bank 5.34 3.35 3.49 3.79
TSB Special 4.54 2.55 2.69 2.99
Wairarapa Building Society 4.99 3.65 3.69 -
Westpac 4.59 4.15 4.09 4.49
Westpac - Offset 4.59 - - -
Westpac Special - 2.55 2.69 2.79
Median 4.55 3.05 3.13 3.12

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