The ability to move with the times and find opportunity in adversity are traits integral to successful property investment.

Isis Winter, a Queenstown-based investor, is an exemplar of these – her most recent renovation in the tourism hotspot has earned her the Renovation of the Year award at the recent NZ Property Investors’ Federation conference.

Winter has been investing for just over a decade, and in that time she has renovated over 20 properties.

Winter has been investing for just over a decade, renovating more than 20 properties ranging from modest residential homes to high-end country estates. In the same period, she has established an impressive portfolio, currently holding 13 properties across nine titles, including her personal residence in Millbrook, near Arrowtown..

The transformation of two Queenstown townhouses into luxe Airbnb accommodation was her first foray into short-term holiday accommodation. It’s been extremely successful – she is on track for a 19.5 per cent yield over 12 months – and it was born of necessity when legislative changes shifted her focus.

Luxury Touch

Winter’s preference had always been creating long-term rentals for Kiwis looking for secure homes, but the removal of interest deductibility and high interest rates demanded a change of direction.

She had trialled the idea of short-term rentals in a cottage she had on the section of her home, and it proved successful. She was also cognisant of the need for luxury Airbnb accommodation in the district.

She established a set of criteria for homes she could transform, approached real estate agents, and studied Trade Me each day for suitable properties.

“I think it’s very important to have this clear set of criteria – a lot of people cast their nets too wide; it makes it much harder to find a good deal.”

One of her criteria was that the home be consented for visitor accommodation. This is a council requirement for short-term rental providers and, if not in place, adds another layer when turning a home into a holiday rental.

In October last year she came across the ideal homes for her new project: two townhouses on Queenstown Hill. Owned by another investor, they were being used as Airbnb accommodation. And while they were structurally sound, they were dated and needed work to bring them up to the standard Winter required.

Built in the 1980s, they had outdated stucco cladding and a “challenging architectural style”. But together the properties offered 340m² of living space on a 570m² lot. Between the houses there were seven bedrooms, four bathrooms, and multiple living areas.

The sale process was competitive, with other offers potentially yielding a higher total price for the owners. However, the certainty of Winter’s unconditional offer of $2,070,000 (including GST) to purchase both homes sealed the deal.

Although they had been given “a version of a renovation”, deferred maintenance and bad style choices meant the previous owners had a lower occupancy rate than what was possible. Her dream was to create a luxe visitor experience that had the convenience of a hotel with the amenities of a home. “I really saw a big gap for this type of holiday accommodation,” she says.

Winter has a passion for interior design (in fact she studied the discipline, earning herself an interior design diploma). And she understood the renovation needed a clear vision: “I used mood and sample boards to give each property a distinct style aimed at broad guest appeal and potential resale value.”

The rear house was conceptualised as a “modern farmhouse” with the front house planned as an “urban lodge”.

“These themes influenced everything, from building materials to fixtures, fittings, furnishings and decor.”

Transformation

The structural layout remained intact, but Winter transformed almost every other aspect of the properties.

This included extensive landscaping (driveway replacement, retaining walls and new gardens, and installation of a spa pool), repairs to the roof and cladding and new exterior doors, alongside interior upgrades including new kitchens, flooring, panelling and improved heating and window treatments.

The actual spend for the renovation was a little over $330,000, and it was completed in eight weeks, starting in March and concluding in May this year.

“Some days on site were very busy, but the process was fantastic. I could write an article on trade selection and management alone, as they’re crucial when working within a tight timeline and budget,” Winter says.

Another key component to her renovation was the addition of extremely high-quality furnishings. Winter is a keen traveller and noted what she loved in the accommodation she used – crisp white sheets, pristine cleanliness – and these observations fuelled her decision-making.

On completion Winter organised a property appraisal to see how they had faired on value gain. “The midpoint value was at $3.45 million, giving me $1,049,007 in equity and a 45 per cent margin on investment,” she says.

Five-star Reviews

Once the renovations were complete Winter listed the properties on Airbnb and established the best way to market them. Understanding the Airbnb algorithm was key – she used professional photography, edited the listings regularly, and made sure each image had a caption to get her listing to the top of the webpage.

Her properties soon began to garner five-star reviews, which led to her being listed as a “super host” and more bookings.

Winter self-manages the properties as charges for managing short-term holiday rentals tend to be extremely high (up to 25 per cent). She employs someone to help her with this and it’s proven a very successful partnership – and the ratings on Airbnb prove this.

And with five months of actual earnings and two months of near-full bookings projected ahead, she can extrapolate that she’s on track for a 12-month yield of around 19.5 per cent on the purchase price and 16.7 per cent on total investment.

“This exceeds initial forecasts, thanks to higher-than-anticipated nightly rates and occupancy,” she says. “While operating expenses are higher for short-term accommodation, the net return is currently far stronger than any of my long-term investments.”

Winter looks forward to being more visible as a property investor: “I’ve traditionally operated quietly in the industry, but the generosity of the investor community in sharing insights has inspired me to give back.”

Her recent win at the NZPIF conference is evidence she’s heading down the right path with her investments, and she has some exciting plans. These include more short-term rental renos and re-entering the long-term investment space now interest deductibility has been reinstated. ν