The Property Academy Podcast

In this episode, we discuss the proposed changes to the Residential Tenancies Act, which are being brought forward by the Labour government. The proposed changes include: Revoking the ability for landlords to request a tenant to vacate with no cause (currently 90 days) Limiting rent increases to once every 12 months, rather than once every 6 months Taking away the ability for landlords to solicit bids for rents. We also make mention of the Property Investor 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. 

In this episode, we discuss the 6 things that can go wrong with investing in brand new properties and how to solve them. 1. Overpaying for a property – solve it by getting a valuation before going unconditional 2. Not being able to secure a tenant because of too may properties coming on market at the same time – solve it by investing in a staged development 3. Can't get started straight away – realise that this is a misconception because although you won't have a tenant straight away, you still have  4. What if the property isn't completed on time – have a robust sunset clause, but still be willing to stay in the development even if it is overdue 5. The gross yield is likely to be lower than an existing property – realise that gross yields and net yields are different. A brand new property is likely to have a higher sale price but lower ongoing maintenance costs. We also mentioned the property investor quiz. This 7 question quiz will tell you exactly whether you are in the financial position to become a property investor or not. And, if not it will tell you exactly what you need to do to get there.

In this episode, we discuss how long it takes to sell a property in different regions around New Zealand, along with a few surprising insights for property investors around New Zealand.  The West Coast region, for instance, has a total of almost 4 years worth of properties already on the market. No additional West Coast properties could come on the market, and there would still be properties available for buyers for another 4 years, given today's sales volumes. We also mentioned the property investor quiz. This 7 question quiz will give you a yes/no or maybe answer as to whether you are in the position, right now, where you could invest in property.

In this episode, we discuss whether you should not buy property, or put off that decision because of Coronavirus. In general, the answer is no. While the media has made a big deal of the potential impacts the likelihood of a widespread outbreak is still low-to-medium in New Zealand. On top of that, we expect a decrease in the OCR, which should stimulate spending and help property buyers and homeowners.  We also mentioned our property investor quiz, where you can find out in just 7 questions whether you are in a position to become a first time property investor. 

In this episode, we discuss why it is preferred to have a mix of owner-occupier and investors within your development.  This is generally for three reasons: You want to sell your property to an owner-occupier in the future, who is likely to be more emotionally invested than an investor, so you want a property that is going to appeal to an owner-occupier When the properties are finished, you don't want your properties to be untenanted because all the properties come on to the rental market at the same time owner-occupiers are more likely to look after the neighbourhood than tenants However, we also discuss how this will change based on the type of property. For instance, a high-end development of apartments or stately homes will likely have a higher proportion of owner-occupiers, all other things being equal, as these properties will likely be too expensive or low-yielding to make the property work for an investor.  As usual, we also gave a wee shameless plug to the Epic Guide to Mortgages. This is the most comprehensive guide that is freely available in New Zealand that teaches you both how to get a home loan and pay it off more quickly. 

In this episode, we discuss the four different titles that are used in the New Zealand property market. These are: Freehold, also known as fee-simple. This is the most common type of ownership in New Zealand where you own the land and you are generally free to do what you like with it, subject to any caveats, covenants, or local bylaws Leasehold – this is where you own the building on the land, but you rent the land from another party. Under this type of title, you pay a ground-rent to the landowner every year and these are subject to review within an agreed timeframe Unit Title – this type of title is common for apartments and townhouses. You own your own property and an undivided share of the common areas Cross lease – where you jointly own the land with another landowner and you both rent the land (at the same time) from the other landowner.  As usual, we also gave a wee plug to our Epic Guide to Mortgages. This is the most comprehensive free guide in New Zealand that teaches you how to get a home loan from the bank and pay it off more quickly.

In this episode, we discuss that it is often thought that smaller towns will deliver yields that are x2 as high as bigger cities. While that might be true for gross yields, this is generally not true of net yields.  That is because smaller town properties often have higher costs as a proportion of the rent. For instance, if you were to buy two properties that are exactly the same, one in a small town and another in a big city, you would likely spend the exact same amount on maintenance. That means that maintenance takes up a bigger proportion of rent in a small town than it does in a big city.  This show specifically discusses rates. Small towns often have rates (property taxes) that are just as high (in dollar terms) as bigger cities. That is because smaller districts have smaller population bases so need to charge more. This means investment properties in small towns often face significantly more cost.  Generally speaking, once all costs are taken into account, small-town investment properties will still have a higher net yield, however that additional net yield might be as little as 1%.  We also discuss the Epic Guide to Mortgages. This is a 9,500-word guide that teaches you how to get a home loan from a bank and then pay it off more quickly. 

In this episode, we discuss the 3 different types of property trading strategies you can use.  Previous listeners have asked whether renovation is the same thing as trading. The truth is that renovation is a type of trading, but there are other types of trading also used by property investors. These are: Renovating existing properties and selling them back on to the market Buying a property and selling it to another investor at a profit Buying a property and selling it straight back on to the market There are different circumstances that would lead to each of these strategies being used, which we discuss on the show, as well as what you would need to have to execute these three different strategies.  We also discuss the Epic Guide to Mortgages, this is a 9,500-word guide that teaches you both how to get a mortgage and then pay it off in today's market. 

In this episode, we discuss a report released a few years back by the Financial Markets Authority, with research conducted by Colmar Brunton.  The report looking into what regular Kiwis wanted out of their retirement. The report found that: 86% of people surveyed wanted to have enough money to meet their every day to day financial needs and fund lifestyle aspects such as travel or a new car And only 38% of those surveyed wanted to leave an inheritance. This suggests that most Kiwis want to have a "well-off" lifestyle in retirement and therefore will need about $100,000 of passive income every year.  We also talk through the other findings of the report.  The final report we mentioned was the Epic Guide to Property Investment, which is our 16,000-word guide to investing in the New Zealand property market. 

In this episode, we discuss bank lending on apartments, and the minimum square metre size requirements to get a home loan.  Each bank has slightly different lending regulations, but as of the publishing date the minimum standards are generally: 40 metres squared – KiwiBank and ASB 45 metres squared – ANZ 50 metres squared – BNZ 60 metres squared – TSB A bank may also not lend on your apartment if they've already met their internal lending limit on a building. So if one bank has 25% market share, they generally won't want more than 25% of the lending on that apartment block while it's in development. That's because if something was to go wrong with the development, the bank would have too much exposure.  We also plugged our 9,500-word guide to mortgages, the Epic Guide to Mortgages. This is the guide that will teach you both how to get a mortgage and pay it off in 2020.