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Where To Invest In Auckland In 2016

Where will you be investing in Auckland in 2016? Auckland apartments may feature strongly with investors this year. To say apartments are now in hot demand is an understatement given the growth in the market in recent months.

In the last 12 months Apartments have seen their values grow by 33 percent. Apartments were probably undervalued up until 18 months ago.

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Where will you be investing in Auckland in 2016?  Auckland apartments may feature strongly with investors this year.   To say apartments are now in hot demand is an understatement given the growth in the market in recent months.

In the last 12 months Apartments have seen their values grow by 33 percent.  Apartments were probably undervalued up until 18 months ago.  Ongoing demand for housing in Auckland has spilled over into the apartment sector with the buyer pool widening too.  Baby Boomers moving into the city.

Demand for Apartments now exceeds supply but the buyer mindset is still the same i.e. they don’t want do ups.   Apartments need to be in tiptop condition to appeal to buyers.   A coat of paint, and new carpet maybe all that is required however it’s investors who undertake the work.

Investors mentored by Grant Hoey take it a step further too.  They stage the apartment for the sale to increase buyer appeal.  This turnkey operation (buy, renovate, stage, sell) is stamped out by Grant Hoey’s investor clients all year round.  The average turnaround from purchase to sale takes six weeks.

Apartment investors mentored by Grant Hoey say they are more confident trading Auckland apartments when they’re mentored by Grant.  His input is sought on most deals to ensure profit is not lost should unforeseen circumstances arise.

Grant Hoey has set the date for his annual one day event on investing in Auckland Cash Flow Apartments. This event is on just once in 2016. If you want to know what’s going on in Auckland’s apartment market from an investor’s viewpoint – book your ticket now to guarantee your place in the room.

Auckland apartment values have grown dramatically in the past twelve months – how have they influenced investor cash flow?

Are Auckland apartments an attractive proposition for property investors in 2016?

These questions and more will be answered by Grant Hoey – a specialist Auckland apartment investor and mentor for over 10 years. Plus at the Auckland Cash Flow Apartments seminar an investor mentored by Grant in 2015 will present the numbers (purchase, renovation and costs, sale and profit) their most recent investment deals.

What you will learn:

Up to date data on what is happening in the Auckland city apartment market RIGHT NOW.
How to ensure your inner city property is cash flow positive from day one.
Practical do-it-yourself strategies and tactics to enable you to find, analyse and secure profitable property.
How to renovate at low cost – providing an immediate gain in property value.
How to sell your property for the best price.
Plus you will have the opportunity to talk directly to a successful property investor

This blog article was written for PropertyBlogs by Mobilize Mail.

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How to Choose and Purchase a Suitable Property to Subdivide

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With the demand for housing in Auckland at peak levels and even smaller-scale properties showing substantial profit margins when sold, subdividing a lot into two or more sections has huge earning potential. Those with the means and capabilities to purchase land for the purpose of subdividing are almost certain to see a large return-on-investment, that is of course, as long as it is done correctly.

Choosing a property to subdivide while exploring real estate options requires the assessment of a multitude of factors. Whether or not a property is capable of being subdivided will depend on its size, its location and the physical layout of the property. It’s not always as easy as choosing the biggest section out there and splitting it down the centre.

Considerations are not just restricted to feasibility either. Property investors taking this route should always keep profitability at front of mind. The effort put into the property needs to be reflected in resale value. At times, just because you can subdivide, doesn’t mean you should.

Factors to Consider When Looking to Purchase a Property with the Potential to be Subdivided

The Size of the Property

When it comes to subdividing, size definitely does matter. Generally, the larger the section the better the earning potential will be. On the other hand, it’s important to keep in mind that section size will also affect overheads. Larger sections typically incur higher costs while performing due diligence.

Land Layout

Level land is important, it will be easier to build on and will be more appealing when it’s back on the market. If a potential section is uneven or has landscape issues, it can make property development more difficult. Choosing a property that is already level will allow a smoother process.

Steps should also be taken to assess how easy it will be for multiple households to live on the lot. Consider issues like driveway creation, road and utility access, and street frontage. These factors will affect council consent and appeal once you’ve placed your subdivided property on the market.

The Zoning Rules of the Area

How the area the property is located in is zoned will restrict the type of housing you are able to create and can even cancel out any plans to subdivide. Before purchasing a property, it is crucial to research council zoning restrictions and consider how they will dictate your subdivision plans. Choosing to work with a subdivision consultant will help you navigate this process if you aren’t sure about taking it on yourself.

Subdividing is one of the most profitable actions a property owner can take. The ability to sell two lots from the purchase of one can exponentially boost your earnings from your investment. Council restrictions and market appeal will have an impact on how your subdivision journey will play out. However, with these considerations taken into account while you search, it is entirely possible to choose a property that will offer worthwhile returns.

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Another date NZ property investors are dreading

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How scary is the new ring-fencing legislation?

Well, just ask any property investor, most of whom are ma and pa investors with less than three rental properties and they’ll tell you it’s outright frightening.

They are the investors, most likely to be among the 116,000 already declaring a loss on their properties and times look set to get tougher for them where selling up may be the only way out.

Ma & Pa Investors Are Not Greedy Landlords

Ma and Pa investors are not your ‘greedy landlords’ with huge portfolios.  They’re middle aged workers (GenX, Baby Boomers) and retirees, motivated by the need to provide their own financial security in retirement.

For years the message from those in the know has been: we’re living longer and the Government pension will not be enough to live on.

Taking matters into their own hands, ma and pa investors have heeded this advice and parked some savings in one or two rental properties.  However times have been tough in recent years and the not so greedy landlords have seen any profits they had eroded.

Weekly rental increases have been modest for months.  Some may balk at this but yes, the evidence is on the Trade Me Rental Price Index and on this blog too.

Property investors have been sideswiped with increases in running costs, which they have had no choice but to absorb initially, before passing them on in the form of incremental rent increases and now there’s another law to halt that with only one increase permitted every 12 months!

See this news item on Stuff, 116,000 rental property owners declared a loss for the year ending March 2017, and it was during the lead up to, and including, this financial year, that legislation changes really started to bite and property expenses started to far exceeded income.

On blogs, property accounting and finance professionals like GRA have provided their interpretation and opinion on legislation changes and forums like our PropertyTalk give a voice to investors and their sentiment.

Upside

The ring fencing law will stress out many property investors further, and some to the point of no return.  Yes, landlords will sell, so more properties will come onto the market and many first home buyers will happily snap them up.  For those amongst us that are politically motivative,  they’ll only see the upside.

However there’s a downside too, that’s not been mentioned much.

Downside

Rentals typically house more people that first home buyer (FHB) homes.  So for every rental property subsequently bought by a FHB, two people are left without somewhere to live.

Housing has been a hot political potato for so long it’s been one step forward and two steps back irrespective of which party or parties are in power and so there’s no end in sight to this housing crisis madness.

Not Just Local

Targeting the rental property owner has been popular not just locally, it’s been a justifiable fear for landlords in the UK, America, and Australia.  Check out the links below.

So is there a country getting housing right?  Let us know your opinion in the comments below or in a blog post on PropertyTalk or of course in our discussion forums.

theguardian.com/uk-news/2018/aug/18/no-fault-evictions-hundreds-of-families-homeless-each-week
domain.com.au/news/landlords-will-withdraw-homes-from-rental-market-in-response-to-new-laws-reiv-20180806-h13ma8-756733/

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Would You Be a Landlord in 2018?

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Investing in residential property has well and truly lost it’s shine in 2018, especially in the state of Victoria and New Zealand.

In the UK, Landlords are more philosophical about changes to tenancy laws.

A recent survey suggested around half are actually positive about Land-lording even with the obvious challenges ahead namely Brexit and the political climate.

As aforementioned, can not be said down-under where landlords feel they’re wrongly in the line of sight of politicians for political gain and thus the law changes are not balanced and swing too far in tenants favour.

So the question is would you be a new Landlord in 2018?

Hindsight is a wonderful thing as the saying goes, and many property investors who have been in the property investment industry for some time still love it and already do well by the tenants which really is just commonsense.

However going in now with your eyes wide open and in the knowledge of the recent law changes, increases in everything from insurances to rates and the talk of tougher times ahead – is property investing a good move? For long term investment – why not?

Speculative property investing (though it’s hardly investing) has always been cyclical and when it’s grouped under ‘property investing’ it gives long term buy and hold Landlords a bad name.

Speculators will come and go as the property market moves through it’s cycle and their activity is considered a business and incurs Capital Gains Tax.

Long term buy and hold investors know it’s always been about the numbers and making sure they add up and there is some fat left in for the unexpected expenses.

However the constant politicising and changing of the rules to suit political agendas is disruptive and it’s hard not to think there’s a conspiracy against Landlords and it’s not just in Victoria our New Zealand, it’s more far reaching and this must be putting off would be investors which will be problematic since private landlords supply most of the rental stock.

The UK Landlords must be made of tougher stuff though as 64 percent say they’ll carry on regardless, keeping their rental properties, focusing on the potential of long term profit. The idiom “soldier on” holds firm on the land of the white cliffs of Dover.

Back down under the confidence is not so high among the local property investors. It’s one thing after another and there’s been a lot of change thrown at Landlords in recent months.

The bright line test, LVR rules, and more recently revision of the bright line test to five years and legislation around the quality of the properties.

Insulation, heating, moisture extraction, you name it New Zealand rental properties are getting a hammering from Government. But none more threatening than what might come from the Tax Working Group headed by Sir Michael Cullen.

There’s a lot on the table aimed at raising the tax grab, including Capital Gains Tax and more recently talk of a Property Value Income Tax. If you screwing up your eyes at this one, you’re not alone.

It’s creative for sure, and if implemented, it’s likely to be the tipping point for Landlords unsure if they’ll ‘soldier on’ or sell up and run for the hills.

What’s most perplexing Landlords, is why the sole focus on them and not a balanced effort to improve both the conditions of the suppliers of rental properties i.e. the landlords and it’s inhabitants, the tenants.

Surely the relationship is symbiotic and thus both are needed, now that ever before with homelessness increasing and home affordability out of reach for first home buyers everywhere you look.

Here are some great discussions on various topics affecting the viability of landlording today in New Zealand.

Capital Gains Tax?

Consultation on proposed RTA changes

Tax Working Group

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