Home insulation keeps your property warmer in winter and cooler in summer so it just makes sense to have at least the minimum depth of insulation in the ceilings and underfloors and also in the walls too if you can do it.

European countries are getting ready for an unprecedented heat wave of 40 degrees Celsius or more, and unfortunately, people perishing the heat is unavoidable.  The old and young suffer the most in extreme heat so a home that has good insulation keeps its inhabitants comfortable.

Newer countries with milder climates have seemingly avoided building homes with much consideration of insulation requirements.

Many properties have just the lining and cladding between them and a cyclone, hurricane or heatwave.  However, it’s becoming apparent that in countries like Australia and New Zealand, the rising costs in healthcare have their Governments focused on improving the quality of tenanted properties.

In New Zealand, the new Healthy Homes Standards has forced the hand of landlords to comply with insulation requirements by 1 July 2019.  All rental properties must have adequate ceiling and underfloor insulation.

Insulation Minimum Depth Recommendations

The recommendations for the minimum depth of insulation for the ceiling, underfloor and walls depend on the climate, and severity of weather conditions.

The UK, USA, Canada and countries like Australia and New Zealand all have depth requirements, therefore landlords need to beware that there is no ‘one size fits all’ should they decide to take on the job of fitting out a rental property for compliance.

All new homes need to be fitted with insulation in time there won’t be a residential property without it.

How Insulation Works

For the nerdy, you’ll find how insulation works fascinating.  However, for the purposes of this blog post, we can summarise it as a product measured in terms of its R-Value or depth, for its thermal resistance quality.

Insulating materials differ however their role is the same and that is to prevent heat flow.  Stop the heat escaping from within the home to the outdoors via the ceiling, walls and floors and also prevent hot and cold air transferring from outside into the home.

To keep homes healthy humidity levels must be kept at a normal level.  This can be dealt with by opening windows and doors, to air out the home.  Remember mould love a warm moist environment, but at high levels mould can be dangerous to mankind.

Insulation Types

There are many different types of insulation including radiant barriers and reflective foils which are both highly reflective so heat is not absorbed.  Bulky fibre materials can be blown into the cavity, which is great for walls and ceiling, and there are the standard sheets.

Some products are made from recycled materials, like plastic, and car tyres.  There are natural products like wool, cotton and straw and of course, there’s the stable material fibreglass.   The list of types of insulation is long and includes many other man-made materials usually byproducts of plastics, metals and minerals.

Insulation Costs

The cost of the product will vary depending on the quality and quantity required.  Natural products like wool will be more expensive than some man-made options and be aware installation costs will be driven by supply and demand.

When there is a Government initiative at play with a compliance deadline to meet, installers will raise their fees accordingly.  Landlords are recommended to get their rental homes insulated before their Government makes it compulsory and costs rise with demand.

Lower mortgage interest rates is a big deal for most homeowners and buyers.

Existing homeowners can hunt around for a better deal with the same or another lender and in the process save hundreds, if not thousands of dollars on interest payments. Even if a borrower is locked into a fixed rate deal on a fixed term, it often pays to break it and reap the rewards of paying a lot less interest.

For first time home buyers, lower interest rates can be the difference between renting and owning a home. Existing homeowners trading up or down, see lower interest rates as a great time to sell and buy too, Therefore there is always a frenzy of activity in the mortgages sector when there is movement in interest rates and there will be winners and and there will be losers.

Winners and Losers

Lower interest rates sends a signal to vendors with homes to sell, that there are more buyers in the market. This can get unsold properties sold which is a win win for vendor and buyer.

More buyers in the market, however can also push the sales price up, as vendors aim to get the best price and there can be only one buyer, the one who is willing and able to pay the most.

In this situation it’s more of a win for the vendor. The eventual purchaser is likely to have paid more than they were comfortable with and thus borrowed more to get the property. Plus there were many buyers locked out by the higher price.

First Home Buyer Tip

The tip for first home buyers is to always be ready to take action as soon as the timing is right.

For first home buyers, it’s always a good time keep a financial advisor or broker up to speed on your personal financial position. This way when the timing is right, like a downward move in interest rates, you can just ask the question:

“What can I afford to borrow, now the interest rates are lower?”

There is no such thing as one size fits all when it comes to borrowing money. Your position will determine how high risk you are to a lender.

A trusted advisor in the know, can act fast on your behalf when lending conditions favour you. Lenders who see you a good ‘investment’ will be keen to move quickly too, to secure your business and thus beat their competition, i.e. other lenders.

Recent news of an OCR rate drop by the RBNZ, spread like wildfire around the country and the early worm is sure to get the best deals.

Homeowners with advisors already up to speed on their current position, will be busy acting on their behalf, to find the best deal saving their clients hundreds if not thousands in interest repayments over the term of their loan.

Property price increases have cooled in Auckland, increasing by just 1.7 percent compared to the previous year. Listings too have been lower, however that’s all about to change. More buyers, trigger more listings and with more buying power, higher property prices.

Timing is everything, so whatever your circumstance, talk to your mortgage advisor and act on the deal that’s right for you.

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.