The Property Academy Podcast

In this episode, we discuss what happens if you make a bad investment and you pick up a property that either costs too much per week and is costing you money, or is not achieving the growth that you initially anticipated overtime?  The simple answer is that you divest the property and sell it. But, in this episode, we'll also teach you how to tell whether this property is really a dud or whether it is just going through a rough patch. 

In this episode, we give you 10 free gifts from Opes for you to learn about property investment, or buying your first home in the new year: The Epic Guide to Property Investment in NZ – Our 16,000 word guide to investing in property in New Zealand Property Academy Video Course – A free video course that teaches you how to invest in property within NZ. First Home Academy Video Course – Use promo code: PODCAST to access this course for free. A $99 saving. The Property Academy Podcast Your Own Terms Calculator – A calculator that shows you how much more quickly you could pay off your personal mortgage by investing in property Magazine Articles Retirement Calculator  Facebook Live with APIA – A 55-minute video we recorded live with the Auckland Property Investors Association Leverage Calculator – A calculator that shows you how much equity you have within your home and what that translates to in terms of purchasing power Property Investor Quiz – A 7-question quiz that tells you whether you are in the position to invest or now

In this episode, we discuss the three types of leverage that every investor needs to know. These are:  Leveraged Returns – when you invest in property, you are able to purchase an asset that is worth far more than the deposit you have put in. If you put in a 20% deposit, then you buy an asset that is 5x more valuable than your own deposit. The benefit of leveraged returns is that if that asset (property) goes up in value at 5% each year, that is 5% on the whole asset, which is 25% of your initial deposit. Leverage Off Your Own Home – May property investors in NZ don't start their property investment journey with a cash deposit. Rather, they leverage off their own home in order to find the deposit. Leverage Off Your Tenant's Rent – Many 1st-time property investors are worried that they are going to have to fund a second mortgage. This is not the case. Because you have a tenant in your property, you are able to use their rent to cover your operating expenses and the mortgage (at least a portion, if not all).  These three types of leverage work together to make property investment both a passive form of investment, but also an affordable means of creating wealth for everyday New Zealanders. 

In this episode, we discuss whether we agree with Invesopedia's top 10 tips for property investment. The key takeaways are: A lot of property investment education (online) is specifically geared towards the US market.  The US market has totally different dynamics to New Zealand, and the figures, yields and general rules of thumb are totally different. This means that when ratios, yields and purchase prices are suggested in these articles you need to take them with a real grain of salt as they may not apply. While the 1st tip was to be willing to do your own maintenance, this is a dangerous suggestion for two reasons:  a) you'll be encouraged to buy near your own home so you can conduct that maintenance. However, that may not be the best decision for your portfolio b) if you mess it up then you have greater liability so it is riskier.  If you can, try to find educational material and information that is geared towards property investment in NZ, rather than from overseas.

In this episode, we discuss capital gains taxes within New Zealand and the existence of the bright line test. Although we don't officially have a capital gains tax within New Zealand, we do have a capital gains tax by another name – the bright line.  The bright line says that any capital gains made on a property within the 5 years of owning a property are treated as income if the property was sold within those 5 years (except for the main family home). This means that there is effectively a 33% tax on capital gains made from property if you already earn at the top tax rate. 

In this episode, we discuss what Opes Property Coaches actually do within the process of getting started in property investment, nz.  Specifically, Opes has a 3-step property coaching programme that helps people get started in property investment: Discovery Session – Find out exactly where you are now, and where you want to go (your goals). Determine the resources you have available to be able to get you to where you want to go Plan Meeting – Create your property investment strategy, including determining how large your property investment portfolio needs to be, along with creating buying criteria about the types of properties you'll need within your portfolio Property Finding – Helping you find the right properties that fit within that strategy that was created as part of step 2 We also discuss why Opes was started and why Andrew and Ed are proud to be a part of the company. 

In this episode, we discuss several conversations Ed has recently had with his cab drivers about property investment nz, specifically about age. This is important because a bank may not be willing to lend money to someone nearing retirement because if that person was to stop working then they may not be able to afford their mortgages.  For instance, say that a person was 65 and borrowed $500,000 to purchase an investment property on a 30 year term. That person would be 95 by the time the loan was repaid, which is why the banks are typically more hesitant to loan to older borrowers. 

In this episode, we give 3 case studies of different situations. These are all real numbers given by real people through the Opes Property Investment Quiz. The quiz asks 7 questions about your personal situation and then gives an indication about whether you will be able to invest, both from an equity and servicing stand-point. 

In this episode, we walk through the 6 exemptions to the LVR rules, which allow you to borrow above the standard lvr restrictions set by the reserve bank. These are:  Not all bank lending needs to be within the LVR rules – only 80% of owner-occupier lending and 95% of investor lending needs to fall within the LVR rules. This means that 20% of owner-occupier lending and 5% of investor lending can fall outside the 20% deposit requirement for owner-occupiers and 30% deposit requirement for investors New builds are exempt from investor LVR NZ rules – If you purchase a brand new property then you won't be subject to LVR restrictions. Theoretically, you could get a loan for 100% of the value of the property and it would be totally kosher and be within the RBNZ's lvrs. Remediation – if your property requires work in order to be brought up to code, then you can borrow above the lvrs in order to fund these works First Home Loans – All First Home Loans are exempt from lvr restrictions. These are low deposit loans that are offered to fire home buyers who meet certain criteria Bridging loans – An owner-occupier can temporarily go over the lvrs if it is for a short time and agreed with the banks while the buy and sell a different property Refinancing – property owners are able to refinance between banks and as long as the loan amount doesn't increase then the refinanced lending is exempt form lvr restrictions. 

In this episode, we discuss the Real Estate Institute of New Zealand's latest monthly update. 10 out of 17 regions reached record house prices, and the median house price in New Zealand was up $22.5K up on last month, to a record high of $630K. This is fantastic news for property investors and owners of property, as it means they will have more wealth in their portfolios on average. There is also good news because Auckland City and Christchurch City also achieved record prices, even as the regions have been relatively sluggish over that period.  All up this is good news for the property market as we head into 2020.