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.
In this episode, we discuss which suburb prices grew the fastest in the Auckland property market over the last 20-odd years.
We discuss the trends in house price growth, specifically identifying that suburbs in the inner-city tend to grow the slowest on average because they are full of apartments, which don't grow as quickly. There are hot spots in the inner-west suburbs, and that tends to be true for most central Auckland suburbs.
On the other hand, suburbs on the outskirts of Auckland tend to grow more slowly.
We also go through individual suburbs to highlight the amazing property price growth Auckland has had over the last few decades.
To view the interactive map discussed in the show, be sure to go to our report.
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In this episode, we discuss 8 places we get our data from so we can make better property investment decisions. The 8 sources are:Statistics NZ for broad demographic data, showing changes in New Zealand's population Figure.nz for nice graphs that we can use in presentations Infometrics for population-based data REINZ for sales data Core Logic and QV for valuations data News Articles from Stuff, the NZ Herald and from industry publications Reports, from the likes of the world economic forum and the FMA Anecdotal evidence
All of these sources put together help us to build a picture of where we should invest, and what sorts of properties should be recommended to every day Kiwis.
In this episode, we discuss the concept of buying property with "no money down". This is where you are able to use the equity within your own home to secure the deposit for an investment property.
This means that you will not have to put in any cash as the deposit to purchase an investment. Popular as part of property investment infomercials from our child-hood, we discuss how this property investment strategy actually works and how to make the most of it.
We also mentioned our equity calculator, where you can see how much use-able equity is available within your property.
In this episode, we discuss the Reserve Bank's decision to leave the OCR unchanged at a record low of 1.0%.
There were 3 factors identified in the decision:An expectation that households will spend more given that interest rates are extremely low already Increased spending signalled from the government through the recently announced $12 billion infrastructure package Improving terms of trade with our trading partners – which signals that exports are going well.
All of these factors are considered inflationary and are having a positive impact on economic growth. Decreasing the OCR further would likely add more inflationary pressure than the Reserve Bank would like, given that it is currently meeting its inflation and employment targets.
We also discussed the Epic Guide to Mortgages, this is a 9,500-word guide which teaches you both how to get a mortgage and pay it off in today's market.
In this episode, we discuss the three ways to make money in property investment. These are:Capital gains – changing market conditions increase the value of your property. This happens slowly but it is consistent. That is why capital gains will often give you the greatest gains, even though you don't have control over it. Instant equity – this is where you actively do something to the property to create an instant initial equity gain. This can be through renovations that add value or through buying the property under its value. This gives you an initial equity hit, but it is not ongoing. It will bring you more value than cashflow, but less value than long term capital gains. Cashflow – this is where your property earns money each week. This is usually a small amount after expenses are taken into account and over the long term it is likely to bring you the smallest returns from the three ways to earn money through property.
We also mentioned our property investor quiz, this 7-question quiz will show you whether you are financially in the position where you can invest.
In this episode, we review the book "20 Properties in One Year" by Graeme Fowler. In the book, Graeme talks about yield v.s. capital growth, and we discuss this dynamic.
We also discuss some of the key principles discussed in the book.
We also mention the property investor quiz, where you can get an instant answer about whether you are in a position to invest, based on your numbers right now.
In this episode, we discuss the crucial elements of a property investment cashflow statement and compare 2 different cashflow statements for the same property – one for a standard residential lease and the other as an AirBNB.
The core costs on any cashflow statement are:interest costs property management rates maintenance accounting insurance body corporate / residents association fee letting fees
Airbnbs will also have internet and electricity, as well as higher maintenance and interest costs as you will need to provide additional chattels within the property.
We also talk about the property investor quiz, this 7-question financial quiz will give you a full report on your numbers, as well as 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 7 things you can look for when choosing to purchase an investment property from a developer.
It's increasingly popular for investors to add new properties to their portfolio. You can do this either by using a property coach, or through a property developer. Here are the 7 things to look for if you decide to do it yourself:If they are in a secure financial position so they don't fall over throughout the project What their quality of finish of their previous builds are like, and if they are consistent with the plans Whether they are good to deal with and are likely to come to the party if a disagreement occurs Whether their building design is diverse. You don't want them to flood the market Whether their builds finish on time, so you aren't lumped with higher interest costs if using a progressive payments model Whether their company has been in business for a while, and If their company has a good reputation
We also mention the property investor quiz. This 7-question quiz can give you a yes, no or maybe answer about whether you're in a position to invest in property. It will also generate a full report about what your numbers mean.
In this episode, we discuss why you need to make more money ... and why building your wealth is not a bad thing.
Some people in modern society think that building wealth is a bad thing ... something that's not desirable. We suggest thinking about your long term goals and considering whether you'll be able to achieve them without building your wealth – and if not whether you can do something about it.
We also mention the Property Investor Quiz, these 7 questions will give you an indication of whether you are in a position where you can invest in property – along with a full report about what your numbers mean.
In this episode, we discuss the 7 instances where landlords insurance can protect you. These 7 instances aren't available through all insurance policies, but many are common between them:Hidden gradual damage Loss of rent from uninhabitable due to an earthquake or act of god Unpaid rent arrears from your tenants Loss os rent if you have had to evict your tenants or if they have left without notice Malicious damage caused by tenants Theft of chattels Meth contamination
We also discuss 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 right now.
In this episode, we discuss the seven things you should look for within a rental property. These are:There is a good mix of capital gain and cashflow You need to decide who your end buyer is going to be when you plan to sell the property That the property is in a high population area That there are amenities around the property, like jobs, parks, schools and pools The price of the property and whether you're getting a good price relative to its market value That it fits within your strategy Can you hold the property long term
These are the 7 things to look out for within your rental property and you can use this as a checklist when looking for your next rental property.
We also discuss our property investor strategy quiz. This 6 question quiz will recommend and give an indication of the right strategy for you.
In this episode, we discuss what the Rule of 20 is in retirement planning and how it works.
This is a rule of thumb, which says that once you decide the level of retirement income you want, multiply it by 20 and that is the number of freehold assets you need to produce the income you want.
That means if you want to live on $100,000 a year, you'll need roughly $2,000,000 worth of assets to produce that level of income every year in perpetuity. That's based on your portfolio producing a 5% gross yield every year.
We also mention our property investor quiz. These 7-questions will give you an indication about whether you're in a position to invest and gives a full report based on your numbers.
In this episode, we discuss all the different types of valuations. These include:CV – Council Value / RV – Rateable Value / GV – Government Value e-value Registered Valuation Sale Price, and Real Estate Agent Appraisals
We also discuss how these valuations impact your ability to get lending from the bank for the property you want to buy, and also how to use these valuations to grow your investment portfolio.
If you're interested in investing yourself, take our property investor quiz. This gives 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 what happens if a natural disaster hits your property and how the Canterbury earthquakes have impacted building standards across the country.
We specifically discuss the differences between TC1, TC2 and TC3 land and what that means in terms of the risk of liquefaction on the ground beneath your property.
Risk-based insurance pricing also makes a feature and we discuss how this can be used as a proxy for the risk of your property.
If you are keen to find out whether you're able to become an investor, why not take our property investor quiz? This 7-question quiz will give you an indication of whether you're in a position to become a property investor.
In this episode, we discuss how BNZ is no longer offering pre-approvals to non-bank customers. This has some far-reaching implications for property investors and mortgage brokers.
It likely means that investors and homebuyers will find the property they want first and sign it conditional to finance before taking the property to the bank. This means that the bank will prioritise the deal.
It is also an indication of strength in the banking and property sector ... if the bank is turning down potential business it is likely because they have been inundated with applications, suggesting that there is even more activity in the market. It also means it is more likely that mortgage brokers will become more important as prospective purchasers consult them for advice.
We also mentioned the Epic Guide to Mortgages, a 9,500 word guide that teaches you how to get a mortgage and pay it off faster in 2020.
In this episode, we discuss why properties are sometimes more expensive when you buy a property through a property coach than if you look on a developer's website.
The reason this is sometimes the case is that developers will exclude some parts of the property from that price. For instance, you might see a property for $499K, but it might exclude the driveway, landscaping or the letterbox. If you wanted it all included, it might cost $525K.
A property coach, on the other hand, will only list the price that is all-inclusive and ready to rent.
We also mentioned the Epic Guide to Property Investment, this is our 16,000 word guide that will teach you how to smash your property investment goals in 2020
In this episode, we discuss how to figure out what you want in a property investment strategy. Andrew and Ed go through a model that Opes has created to think about the sorts of needs you have as an investor.
It is based on a triangle model with the most important property investor needs at the top, and the functional needs near the bottom.
Here is the link to the model that was discussed throughout the show.
You can also take this quiz to figure out which strategy is right for you based on this model.
In this episode, we discuss the top problems and issues that investors usually come across when investing in property (and how to solve them). We discuss potential solutions and risk mitigation for each of the following:Issues with lending, broken down into – Interest rates rising increasing your expenses, not being able to get borrowing from the bank, and not being able to have interest-only loans renewed Vacancy and tenancy problems – what if your rental property is turned into a P-lab or attracts unsavoury tenants? Maintenance and unexpected costs The Market – what happens if the market goes down and stays down? You – What happens if you lose your job or are forced to sell the property early?
We also discuss the Epic Guide to Mortgages – this is our 9,500-word guide that teaches you how to get a mortgage and then pay it off more quickly than you naturally would.
In this episode, we discuss ringfencing, what it is and how property investors can combat these recent tax changes.
From April 2019 property investors haven't been able to claim rental property losses against their income. Previously investors were able to claim a tax refund on any losses made by their rental property. That meant that if the property was negatively geared the tax could make it cheaper to own a rental property.
This is no longer the case, which means that owning negatively geared investment properties are more expensive.
Investors have three options to combat these higher costs: a) invest in positively geared properties, b) increase the rent charged on the rental properties, or c) attempt to decrease expenses by restructuring and refinance investment debt.
We also mention the Epic Guide to Property Investment. This is 16,000-word guide that teaches you the fundamentals of how to invest in property.