The Property Academy Podcast

In this episode, Di Foster – property investors and executive leadership coach – walks through the reasons she decided to get into the investment property market and become a property investor. Di opens up and tells us that she was in a different position than she thought she was going to be in, due to a health scare. This is what prompted her and her husband to start looking at investment property. We talk through one of the properties Di has invested in – a three-bedroom, two-bathroom standalone house in Wigram, Christchurch. She talks through how the property was bought for $500,000 and three years later is valued at $570,000 – a 4.4% growth rate year on year. That compares to a growth rate of 2.6% in the Canterbury region over the same period. 

In this episode, we discuss Christchurch's 'As Is' Market. The Christchurch earthquakes were devasting for homeowners in the Canterbury region. Many were left unlivable and there was a severe housing shortage in the city.  After homeowners were paid out, and the EQC had made repairs to properties, it was clear that there were still properties that needed work. This created the 'As Is' market. These are properties that still require work and repairs before they can be brought up to code and to an acceptable standard. Developers will buy these properties, repair them and sell them back on the open market – often generating a significant return.  During the show, Nick reveals the real numbers and talks openly about the difference between the real numbers and the vanity metrics.

In this episode, we are joined by Nick Johnstone a developer investor based in Christchurch. Nick walks us through a feasibility study he did on a piece of land.  His options were to either demolish the existing property on the land and build three new units. Or, he could build a minor dwelling on the back of the property and rent it.  He shows us why it made more sense for him to build the minor dwelling, which generated a smaller return, rather than going through a complex development process. 

In this episode, we answer another question from one of our youngest listeners, Jackson. Here he asks, why do people rent your houses? There several reasons why someone might rent from a property investor. These include not being at the stage of life where the person is ready and able to buy their own house, not wanting to take on debt, being transient or not being able to afford to buy in the city that a person wants to live in. 

In this episode, we answer a question from one of our youngest listeners, Jackson. Here, he asks a simple question: if I need to work to earn money to live on today, what will I do when I retire? This is important because before you can close your retirement plan in place, you need to know that your retirement gap exists.  In the show we talk about the two approaches to closing your retirement gap with property investment. 

In this episode, we discuss negative gearing. This is the situation where your property makes a cash loss each year after factoring in interest costs. Some property investors steer clear of negative gearing others embrace it.  The fact is that negative gearing typically occurs when mortgage repayments are high and when investors have purchased their investment property with 100% lending. This means that no 'real' deposit has been used to secure the property and the only cash that has been put into the property comes from the investor's 'top-ups'. In the show, we discuss the good and the bad of negative gearing within property investment. 

In this episode, we discuss the fact that you're not going to live in your investment property, so you can't treat it as if you will. Instead of looking for factors that you would 'like' to have as a tenant, you need to look for the factors that will make it a great investment: good capital growth with reasonable cashflow. 

In this episode, we discuss that many people will wonder why they should get into property investment now ... why not wait a few years? We discuss that so many things can change over time in property. In 5 years you may be subject to stricter lending criteria, higher market prices or increased regulation.  You've also got limited control about what could happen in the future, and you have no certainty about what the future might entail. Whereas you can analyse market conditions and regulatory frameworks as they are today.  Finally, if you wait, you miss out on any capital growth that may have occurred during your ownership. This is what will be your largest cost in property investment. 

In this episode, we discuss rental yields and which towns generate the best rental return for investors. We walk through the top 5 towns, and discuss the reasons why they might get superior rental yields.

In this episode, we talk about whether prospective property investors should pay off their personal (owner occupier) mortgages before investing in property – and which they should pay off first.  This question came from the Property Investment Chat Group NZ, a Facebook group where investors discuss property in New Zealand.  Andrew walks through the reasons why it is generally better to get into investment property early rather than wait. And that it is typically better to pay off your own occupier mortgage before you pay down any investment debt.  The key reason behind the latter point is that it is inefficient from a tax perspective to pay down investment debt first. That's because the interest on an investment loan is tax-deductible, while it isn't on your personal home.