The Property Academy Podcast

In this episode, we are once again joined by financial adviser, Tim Weston, who shares his 6 top tips for renovating property investment in nz: Keep the scale manageable – If it is your first investment, you wouldn't want it to blow out in terms of time or costs. The best way to achieve this is to keep the scale of the project small and manageable Know your numbers – how much are you going to make after sale and finance costs Do you research – go out to open homes and check what the price is in your market for a property that is renovated and one that isn't. Then you can make an estimate about how much you can spend in order to make $2 for every $1 you spend Keep it cosmetic – this is where an owner occupier will put their purchasing power. Their not making their decision based on the foundations of the property, it's about how it looks and feels Ensure that any extensions are manageable Avoid anything that is structural 

In this episode, star of Grand Designs, Tim Weston shares his story of transforming the Britten Stables from a devastated shell into an international showstopper.  Tim shares candidly his views on the toll this extraordinary renovation took on his finances, his health and his family. It is an amazing story of an amazing property. Check out the Britten Stables here. 

In this episode, we discuss how to form your own property buying syndicate based on a question that was sent in by a listener of the show. We discuss that if you don't have enough equity to purchase property, whether because of the lvr restrictions or otherwise, then forming your own syndicate may be for you.  The top risks for property syndication are: You are jointly and sever-ably liable for the mortgage that you take on. This means that if your property-buying parter skips the country then you are liable for their portion of the loan Needing for an aligned exit plan so you can all get your money out at the end of it. 

In this episode, we discuss buying off the plans – the different ways you can do it, and an analysis of some of the risks and benefits as to why you would buy property off the plans.  There are two ways to buy property off the plans:  Progressive Payments, where you make payments to the developer or builder at specific milestones Turn-Key, where you pay a deposit, and then nothing else until the property has been completed Progressive payments tend to work better if you want to change the property and customise it as you go, whereas in turn-key you have less ability to customise the property as you go. The reason you might buy property off the plans is that by definition you are buying a new property, which has looser lvr restrictions from the Reserve Bank.

In this episode, we discuss the three steps to take if you want to become a property investor in 2020. These are: Figure out where you are now and then where you want to go. And then look at the resources you have that can be used to help get you there Create a strategy about how large your portfolio will need to be in order to help you close that gap and then create buying criteria showing the types of properties that you are going to invest in Go out and look for properties that match your buying criteria.  The most important steps are steps 1 and 2. Most people will skip to #3 and immediately start looking for properties. But, this is the wrong approach to take. If you're looking for any property, you're sure to find it. But, if you are looking for a property that is going to make a good investment for you, then it's a good idea to determine exactly what that looks like first.  One step we didn't mention in the show is calculating your mortgage using a mortgage calculator. You can use the calculator on the Opes website to calculate your future mortgages.

In this episode, we discuss 4 ways to pay down your mortgage more quickly. These include: Use an offset account to use cash you have saved to decrease the amount you pay interest on Make extra payments to your mortgage Consolidate consumer debt into your personal mortgage to help you focus on one payment and reduce the interest payments you make on that additional debt Purchase an investment property to help you pay down the debt as you increase equity within your property  You can also use our mortgage calculator to help you run different mortgage scenarios for your own home loan.

In this episode, we discuss the biggest blunder that Ed made in 2019, or rather where he copped the most flack on social media. In October we created a video suggesting that the average new mortgage in Auckland was around the $280K mark, which was swiftly rejected online.  In this show, we go through the reasons as to why the average new mortgage may be much lower than you might initially think. This is because: New mortgages taken out by first home buyers aren't typically taken out on the median house price. Rather, first home buyers buy cheaper houses and therefore take out cheaper mortgages Many new loans are taken out by existing owner-occupiers, who have built equity in their homes and therefore have larger deposits. This means that they don't need to take out large mortgages

In this episode, we discuss 4 key differences between the property market and the share market. Only 24% of the property market is made up of investors, the rest is primarily made up of owner-occupiers, this has some important flow on effects in terms of how the market operates: The property market has higher barriers to exit for owner-occupiers than there are in the share market. Property owners need to pay for a real estate agent to sell their house, which can be a real disincentive for property owners to get out of the market – especially as it takes a median of 33 days to sell a property, whereas shares can be traded instantaneously. This means that when the market is not doing so well relatively fewer property owners will opt to sell their properties, which creates a more stable market In the property market, you have the ability to make cosmetic changes to your investment in order to increase its value. You can't do this in the share market, because you have one share. And because there is more emotion associated with property, investors have the opportunity to make quick gains because the market is based on emotion, not on the fundamental value of the asset The property market is less reliant on investor sentiment, as the majority of the market is not made up of investors Individual property investors have more control over what they can do with their investment. If you are an investor and want to make a change to your property, you can. If you're a Westpac shareholder, try telling Westpac what you want them to do. 

In this episode, we discuss whether you should pay off your personal mortgage entirely before you start investing in nz property. In short, the answer is generally no. The reason is multi-fold: If you wait till you have paid off your mortgage entirely you won't have as long in the property market because you may have to wait, 10, 20 or 30 years before you get started – and the most important factor in the property market is the time spent in the market Investment property can, in fact be used to pay off your mortgage faster, and in the show, Andrew runs through the scenario of whether it is better to invest $50 a week in an investment property, or paying down your personal mortgage further. 

In this episode, we discuss a piece of advice which can be found in nz property investment books from the 1990s to early 2000s, which goes something like this: "only focus on cashflow, don't worry about capital growth. Just treat capital growth as a bonus". We discuss whether we agree with this advice or not, and the answer is generally: "no". The reason for this is that you will need a significant number of cashflow positive properties to build the same amount of wealth generated from a capital growth property – it is just not realistic that a property investor would be able to take on that many properties because of the bank's financing limits.