The Property Academy Podcast

In this episode, we discuss how to transition from a capital growth property portfolio into a positive cash flow portfolio.  This is a topic Andrew recently covered on a webinar with the Auckland Property Investors Association.  An investor would typically start to transition their portfolio as they near retirement, and in the episode, Andrew suggests that you should allow about 5 years for the transition.  Allowing several years allows you the ability to sell at the most convenient time in the market.  The reason your property investment portfolio will likely need to transition is that when you start in property investment, most investors will focus on capital growth properties.  These properties increase in value quickly but produce weaker rental yields. These properties are good for long term investors as they will grow wealth more quickly.  But, as investors near retirement, your time horizon shortens. That means that investors want their portfolios to begin producing passive income. Hence, the transition to higher-yielding properties that can provide that income most efficiently.  We also mention the property investor quiz. This 7-question quiz will give you a 'yes', 'no' or 'maybe' answer about whether you are in the financial position to invest in property. 

In this episode, we discuss the turnaround time it takes to get a mortgage approved in New Zealand.  Right now the banks can take up to 7 business days to open your email to and start to process your mortgage. They are incredibly short-staffed, but demand is also increasing.  Typically due diligence on a brand-new off-the-plan property will last 10 days. That means that there are only three days left for the bank to approve your mortgage for an investment property. Landlords and property investors should, therefore, work with experienced and knowledgeable mortgage brokers who can ensure that the mortgage application will go through BEFORE the application goes to the bank.  If the banks have questions about your application, then it may be another 7 days (after you get back to them) where the bank can finally approve your application. This is important since developers are getting tighter on 10-day due diligence periods, and are refusing extensions. They can do this because the property market is so hot at the moment.  We also mention the Property Investor Quiz. This 7-question quiz will give you a 'yes', 'no', or 'maybe' answer about whether you are in the financial position to invest in property. 

In this episode, we reveal exactly how property coaches get paid and a few common misconceptions about property coaches.  There are different types of property coaches. Some like us source properties on your behalf and therefore will earn a commission when you choose to invest in a property. Others will charge you a fee to teach you how to do that sourcing and any renovations yourself.  While we at Opes Partners do not charge a fee for our service, some in our industry do charge you a fee to put together your strategy. We also make mention of the Opes Property Investor Quiz. This 7-question quiz will give you a 'yes', 'no', or 'maybe' answer about whether you are in the position to invest in property right now.

In this episode, we discuss another fear that holds people back from getting start as investors – fear of the unknown. Perhaps there's something in the back of your mind holding you back from investing. This is common for first-time investors. It's the fear of the unknown. You might think: What happens if I suddenly lose my job? Or what happens if I don't have a tenant for a long time? Or just what if something bad happens? In this podcast, we discuss 5 tactics you can use to protect yourself against this situation. They are: 1. Set up a Buffer Account with a Line of Credit 2. Get the Right Type of Insurance for You in Place. This could include both income protection insurance and landlords insurance 3. Work with experts such as a property coach, accountant, lawyer and property manager who can help see things you might not see. As they say – you don't know what you don't know. 4. Remove the emotion and know the numbers – get a property investment analysis 5. Get educated. The more you learn, the more you will remove the unknown. We also mention Opes' Property Investor Quiz. This 7-question quiz will give you a 'ys', 'no' or 'maybe' answer about whether you are in the financial position to invest right now.

In this episode, we discuss how you can make your voice hear in regards to the proposed changes to the Residential Tenancies Act. The Auckland Property Investors Association saw that 363 people submitted on the ringfencing legislation. About 110 of those submissions were against ringfencing. So very few people participate in the legislative process. That means that your submission represents a large proportion of submitters. You can submit by: Submit on time! Midnight on 25th March Answer the questions and stick to the topics Share a personal story Demonstrate early on and that you have skin in the game. Specifically, identify how you will respond to the changes as a landlord, including the consequences on others, like your tenants and neighbours of your rental properties Don't copy and paste from other's submissions; they won't be given weight. The episode wraps up with a discussion about how society views landlords. Landlords are sometimes seen to be unfairly profiting off of a perceived human right (housing). But, typically, landlords have no interest in meddling with their tenant's lives. Most landlords don't become property investors to be a landlord, but rather to better their future through this property investment business. We also mentioned APIA's toolkit, which you can use to guide your submission. You can view and download this here.

In this episode, we are joined by Sarina Gibbon from the Auckland Property Investors Association (APIA). APIA and the New Zealand Property Investors Federation are currently representing the interests of landlords and property investors as part of the proposed changes to the Residential Tenancies Act. Sarina walks us through the significant changes and what they mean for landlords, including: The end of 90 day no cause notices The process landlords and property managers will need to follow to evict a problem tenant in the future Some of the unintended consequences of the bill, e.g. the eviction of quality tenants before this bill passes, as protection for landlords Our conclusion is that while the purpose of the act appears to be to safeguard tenants, the unintended consequence is that landlords will: increase rents to 'price' in the additional risk of not being able to get rid of problem tenants evict tenants before the bill to secure lower-risk tenants be less willing to take on a tenant that is considered risky, like younger tenants with little record of renting exit the lower-end of the rental market and move to the higher end, further increasing the shortage of affordable rental accommodation at the lower end of the market. We also mention the property investor quiz. This 7-question quiz will give you a simple, 'yes', 'no' or 'maybe' answer as to whether you are in the financial position to invest in property.

In this episode, we discuss what real estate agents think about the current state of the NZ property market.  This is based on a survey of Barfoot and Thompson Real Estate Agents conducted by independent economist, Tony Alexander. It showed that real estate agents increasingly have a positive view of the market and are seeing more activity at auctions and open homes.  We also discuss the Property Investor Quiz. This 7-question quiz gives a yes, no or maybe answer about whether you are in the financial position to invest in property today.

In this episode, we discuss that you shouldn't always believe the data you read ... or rather that you should take the time to read into it more.  This is based on an article Ed provided comment on for Westpac. They wrote an article that suggested that gross yields for 1-bedroom apartments in Parnell were about x2 that of 3-bedroom homes. We discuss when you should read into more data and what actually lies behind this story. We also discuss the Property Investor Quiz. This 7-question quiz will give you a full report about whether you are in the financial position to invest in property right now. Take the property investor quiz here. 

In this episode, we discuss another difference between investing in small towns and larger cities – deferred capital maintenance. Every investor accepts (and hopefully budgets for) the fact that their properties will require maintenance throughout the year. However, we also know that from time to time investment properties will require capital maintenance, especially if the property is older.  This could be the replacement of a roof, painting the outside of the property, rewiring the house, or some other major works. These are often not budgeted for and the payment for these works are often made by leveraging the property.  But, the cost of this maintenance is more expensive (as a proportion of the house price) for properties in smaller towns than in large cities. That means that a small-town property that appears to be cashflow positive can actually have a poor cashflow once this capital maintenance is factored in. We also mention the Property Investors Quiz, this 7-question quiz will give you a 'yes', 'no', or 'maybe', answer as to whether you are in a position to invest in property right now. 

In this episode, we discuss a couple of recent stories that have developed in the media where young first home buyers were on the wrong end of a sunset clause.  A sunset clause is typically used in a sale and purchase agreement to protect the buyer of a property that has not been built yet. Using this clause, if a developer has not completed the build by a certain date, then the purchaser has the right to cancel the contract.  However, in the stories that have developed in the media, the developer has used the sunset clause to legally cancel the contract and resell the property at a higher price. If the market has increased in value throughout the duration of the build, the developer can then make significant gains, and the purchaser is left having to purchase at a higher price.  That's why in this episode, we discuss how to protect yourself by using a robust sunset clause that only the purchaser can invoke, not the developer.  We also discuss the Property Investor Quiz, this 7-question quiz will give you a 'yes', 'no', or 'maybe' answer about whether you are in the position to invest in property or not.