IS A RENTAL PROPERTY STILL A GOOD INVESTMENT OPTION

While there are countless ways to invest your money, real estate has proven to be one of the best long-term investment options. If you’re looking to get your first investment property, the best way to invest in real estate is to buy a rental property and lease it long term. While this process involves a considerable amount of effort, most investors realise that commercial property investment provides the best results. You can gain consistent cash flow and a long term-term investment return. Providing rental management services is one of the best ways to grow in real estate.

Here are a few reasons why purchasing a rental property is a good investment.

HIGH RETURN ON INVESTMENT

Both High leverage and high ROI have relatable interests. When you use mortgage loans for an investment, you’ll be using only a small part of your own money to invest in property management, which means you gain a high return on your investment in the long run. In addition, on leasing the property to a tenant, the rent is structured to not only cover marginal expenses but to also cover the interest payable on your mortgage loan. As a result, you have a higher interest than other investment types. Your ROI increases as your profits exceed the interest you owe. This explains why real estate is considered to have a high return in the long run and is perceived as a high performing asset with commercial units for sale. An additional benefit is that any increase in value on your property makes your ROI increase further. With the high leverage in the context, your monthly cash flow increases which leads to an increase in your ROI.

TOTAL CONTROL

Buying a rental property means that you’re in total control of the tenant you’ll lease to, how much you’ll charge for rent and you’ll plan for house property management and maintenance while leasing the property to tenants. There are other ways to derive cash flow, you can decide to use services like Airbnb to provide a short term vacation stay or contact reputable property management companies and strata body corporate to assist you to locate and service long-term tenants.

According to the type of tax deduction, the cost of repairs on the building will be deducted in the year in which they are carried out.

Similar to investing in a stock, you’re in control of the stock you wish to invest in, you have the opportunity to hire someone to manage and control your income.

ABILITY TO ENSURE YOUR PROPERTY

While many investors opt to purchase rental properties, they don’t consider that they can ensure the property investment. With the right insurance coverage, you can protect the property so matter the incident that occurs you’re fully covered. If you’re concerned about the cost of insurance, you can make a plan and incorporate it into the rent that your tenants pay.

In addition, you can deduct insurance premiums from any insurance policy related to your rental property. Some of them include the cost of employee insurance, theft, fire outbreak, or natural disasters.

DIVERSIFY YOUR ASSETS

The power of diversification is fully harnessed in real estate investment. If you want to achieve reasonable benefits without high risk, it is advisable to invest in many other markets. The real estate market has its domain and your property is included. Real estate is a valuable asset to own because it appreciates over time. Even as there have been past market crashes, it has still proven to be a safe and steady market, especially in the long run.

Another good thing about real estate is the ability to research the market based on your preferred choice of location. You can keep up with the newest trends that will guide you through your decision-making process about the real estate market, which is a much favourable environment compared to the stock market.

MORTGAGE ASSISTANCE

If your home mortgage falls under the 30-year fixed-rate mortgage, it means your interest rate will not change for the entire 30-year term of the loan. As the loan is initiated, additional money is paid to interest than to principal, but as soon as the term is halved, it reaches an equal split.

 

This means that the longer you hold your property, your tenants’ fee covers more of the loan principal, which also means you’ll be creating more wealth for yourself.

As long as you own the rental property, you’ll be using the tenant’s fee to pay off your debt. While you reduce the loan fee, you will be acquiring wealth and consistent cash flow as you will always have unlimited access to the money either by flipping and selling or refinancing your loan.

WARD OFF INFLATION

Real estate handles rising inflation better than other domains. This is because as prices go up, the value of your asset increases. You can easily ward off inflation when you make use of leverage to invest in rental properties with a low-interest rate. Many investments are at risk during inflation because there’s a high chance it can reduce the value of assets.

On the other hand, the benefit of real estate investment offers a great way to protect your wealth. The increase in rent makes it possible for you to accumulate more money which will always come in handy as prices of goods are likely to increase during inflation.

DECIDE TO SELL AT ANY TIME

A rental property is a good investment option because you can decide to sell whenever and however you prefer. While it is advisable to hold on to your investment over the long term, no fixed rule exists. You are in charge of every selling process. There are many different exit strategies you can take leverage to maximise profits. The choice is up to you. With the right real estate accounting, you’re likely to sell your property at a higher price than the initial cost.

Before you transfer rights of your property, ensure you find a conveyancer and get the necessary conveyancing quotes.

Alternative Housing Ideas To Travel And Save Money

If you’re feeling the pinch but still don’t want to have to sacrifice travelling, then perhaps you should consider looking at some alternative housing ideas. By doing this you will be able to save money whilst at the same time still be able to travel. Below we will provide you with some ideas to think about when it comes to alternative housing so you get thinking about storage solutions and selecting the right moving company as soon as possible. 

House sitting

If you don’t want to purchase an alternative house then you could consider living in someone else’s home. For instance, you could use options such as Airbnb. There is also the option to stay in a hotel long term and this can be quite cost-effective in many countries. The best option, however, would be to be able to housesit where you can stay in someone else’s home free.

Work

If  teaching is something that you’ve always fancied then you could consider getting yourself qualified to teach abroad and this will give you the option to live for free. Quite often, many schools will provide you with an apartment and these usually have additional facilities such as a gym. This option means you can live for free and any money that you save you can then invest in property.

An RV

If the thought of an RV conjures up an image of a battered old bus-like vehicle from the 1970s then you’ll be very mistaken. These days RV’s are actually quite luxurious and quite often they include huge slides. These are rooms which come out of the main section of the home and mean that you will have ample living space when you are parked up. Many RV’s include state-of-the-art kitchens, fully equipped bathrooms, king-sized beds as well as a spa pool.  Ultimately, you can make living in an RV as luxurious and comfortable as you like, it all depends on your budget and how much you’d like to save. You don’t necessarily have to live in an RV all of the time as you could just use it for when you decide to travel. Alternatively, if you prefer to save money then you could consider living in an RV full time and take advantage of a more nomadic style of life.

Container homes

It is easy to have a container home shipped to you and you will probably be surprised at how homely they can actually feel. If you don’t like the metal look of the home, then cover it up.  The beauty of container homes is that you can purchase more than one so that you can make an alternative home to suit your preferred size as well as shape.

A tiny house

If you’ve not heard of a tiny house then it’s simply a small house that can attach to the back of your truck or your car. The advantage of having a tiny house over an RV is that you don’t have to get rid of your truck or your car, as long as it’s able to pull a tiny house. This means that it’s a much cheaper option than buying an RV.  The other advantage of a tiny house over an RV is that you won’t require water or power from an RV Park. A lot of these tiny homes have their own filtration and rainwater systems as well as solar roofs. This then means you can park up anywhere and settle there for as long as you desire, that is as long as it’s legal to do so.

Prefabricated cabins

If you are lucky enough to have some land, then you could consider a prefabricated cabin.  Another option would be to buy a cabin kit and then design and build this yourself.  Prefabricated cabins have the ability to host solar panels which you can use as a source of electricity. They also have water tanks for fresh running water and can also accommodate a heating system. It may be worth considering contacting a local after builders cleaning once you’re done to help you out so that you can get on with making your new house into a home.

A houseboat

Nowhere does it state that you have to live on dry land. You could consider purchasing a houseboat. Many houseboats have more than one bedroom, come with running water, heating facilities, full electricity as well as other mod-cons such as televisions etc. If you decide to sell your home and purchase a houseboat you will have the freedom to be able to sail all over, whilst at the same time reducing your living expenses. 

House hacking

With this idea, all you need to do is to purchase a home and then think of ways of how someone else will pay the mortgage on it. The easy thing to do is to buy a small multi-family home and then rent it out. This is one of the more difficult options if you’ve never rented out of purchased a home before. If it’s hard to find a multi-family property in your area, you could consider buying a home where you can rent out the bedrooms individually i.e. to students or look for a commercial property for sale which you could rent. Another option would be to let out a room in your own home to a student for example. 

Across the world, property is the most expensive purchase that we all make. If it’s possible to save money and reduce financial costs, you will see the benefits of the money that you have managed to save. The additional beauty of choosing an alternative house means that not only will you save money, you will also be able to travel and visit destinations that you otherwise may never have had the opportunity to see. 

5 Signs That A Suburb Is The Rise On The Property Market

The property market across the world has seen a bumpy road in the last couple of decades. Although this is the case, property has always been a good investment as in most cases if you buy at the right time, your money will be safe. If you’re looking for a property to buy, you will usually be looking for your main residence so it has to suit what time of life you are in. 

So if you have children, you will require a family house or if you’re a young professional, you may want to be close to work so that you don’t have a large commute on your hand in the early years of your career. That said, there are a number of other factors to consider when you make your final decision. One of these factors has to be which area you would make the most amount of money in. In the past, the property market would suggest that inner-city areas in popular vibrant capitals would often yield the most money and cost the most to buy, however, the suburbs are now on the increase and are seeing a massive rise in the property market.

Property Advice

Let’s now take a look at some of the signs that the suburbs are seeing a rise in the property market. Before you embark on buying a property in the suburbs, you will need a trust lawyer,  conveyancing quotes,  maybe a new house loan and it advisable to make use of an investment property calculator. The above aspects are always a good place to start when looking at the property market. If you are looking for a more investment type of property, i.e. you may be looking for farmland for sale, you will require business insurance. Again, the market for this type of property is also on the rise as many would-be investors look to maximise the amount of money they can make from their investments.

Let’s now consider some of the signs that suburbs have seen a rise in the property market.

  1. Demand

When we advertise a property, we always assume that it’s going to take months or even years to sell the property. A good way to determine how much demand there is for a property is to see how local sales have gone in the area. If your property has been on the market for a very short time, you will notice that that means the market is improving in your particular location. Suburbs have seen a massive rise with this and we are seeing that properties in suburban areas are being snapped up very quickly, which is often leaving a short supply that does not meet the demand.

  1. Auctions

Auctions are another sign that the property market is showing a rise in popularity. Suburban areas are now seeing a rise in the number of options that are taking place. This increase is to make sure that the number of people viewing a property for auction meets the demand of the area. Auctioneers are making sure that these properties are full of potential buyers to make sure that the vendor has the maximum opportunity to complete in the sale.

  1. Discounts

Discounts are a major thing if a property that you have been viewing has been set for a certain price for some time and the vendor is willing to offer a significant discount, then you can tell that this property has been hard to sell and the demand is low. However, in suburban areas, we are now seeing less of a discount for properties and they’re selling for their asking price. This is a surefire indication that the market for suburban areas has increased and shown an increased potential rise due to the lack of discount offered by vendors and auctioneers.

4 Infrastructure growth 

It has to be said that governments around the world have always put large amounts of money into their capital city areas or large cities within a country. Transport links, internet connections and other technological advancements have been put into inner-city areas for a number of decades. As these areas are overpopulated, people will begin to look into suburban areas which means the development and infrastructure improvements has helped bolster prices of suburban property. Transport links and infrastructure has also improved dramatically over the years in these areas with the advent of smart technology. There is also a growing need not to go into work so you are able to work from your home. This means you are able to live further away from your place of work and this has given the suburban areas rise in popularity.

  1. Vacancies

The number of vacancies that are available in suburban areas has decreased dramatically in times gone by. Before you would have been able to have a large choice of property in suburban areas. Whether you are renting or buying, these properties were not often snapped up and many were left on the market, giving the buyer lots of choices. This is an indication that suburban areas have now seen a change as the number of vacancies for properties for rental and buying has decreased, showing that the growth and rise in the property market in suburban areas has improved.

As you can see from the above points, the rise in the property market in suburban areas is clear to see. This type of growth will continue as long as urban developments stay saturated and the demand for infrastructure changes remains high. 

Racist property listing fake

Harveys Real Estate Papakura issued a clarification after a Facebook account, purporting to be property manager Lynette Snook, posted an advert for a rental on Great South Rd that included racist comments.

Property Management Is A High-Tech Game Now, Are You Keeping Up?

The property market has always been a buoyant area that you can make some serious money in. However, it has to be said that when you can make lots of money in a particular area, it also carries a number of risks. Whenever you are looking to invest money in property, you need to look for some sound advice from those in the know. Best real estate investments and buying investment property are two good terms you could use on the internet to see who is trending and who is rating on Google for this type of information. Agribusiness management is also a great place to start your property portfolio if you are relatively new to the property industry. There are a number of places that you can gain advice from if you are new to the property industry. Body corporate or corporate entities are a good place to start looking at their models, to see how other people have made their money. Keeping up with the latest high-tech trends and information systems is also vital when you’re embarking on this type of investment. The world’s economy changes, so must the way we do our business so thorough research is always advisable.

It’s also easy to see how technology has caused huge changes in many industries over the last decade. Technology has impacted travel, community, retail, media and transportation to name but a few. However, many of us think that the real estate industry hasn’t been impacted by technology but they couldn’t be further from the truth. We will take a look at how technology has impacted residential property management companies and let you see whether you as a property management agency or rental property management company are keeping up with these high tech changes.

Cloud

When a property management company goes digital it means that everything ends up in their cloud i.e. all interactions, questions, requests, documentation,  manuals etc. This then means that anybody in the company can access this information regardless of where they are located.  In fact, a lot of the documentation used is now electronic from the offset. The majority of leases are now digitally signed, which saves time and makes things easier to organise as it doesn’t mean you need to meet up in person to sign the lease. 

  • Going digital

It is possible now for a property management company to be completely paperless and go digital. In the past, a property manager would need to head to their filing cabinet if they were ever asked a question related to a contract or lease for example. These days, there is no need to even have a filing cabinet. Storing paper records makes it very difficult to be organised and it also means space is required. This means that in this day in age, in order to keep up with the hi-tech industry, property managers are able to simply scan documentation and dispose of any paper files which means there is no need for filing cabinets.

  1. Smartphones

There is no need for actual offices these days as smartphones have helped to replace them.  Rather than spending time in an office, many property managers are now able to be on hand at the actual property rather than in an office, as they are able to access everything they need using their smartphone. Smartphones also mean tenants are able to contact someone at any time, in the event of an emergency. The hurdle that property managers now face is to remain organised as all communication has gone digital. 

  1. Payments

Many property management companies do not take cash and the majority of tenants pay online.  One of the reasons why property management companies avoid taking cash is that firstly it’s a security risk. The second reason is so that a tenant cannot say that they have paid when in actual fact they haven’t. By using digital transactions, all the details can be kept on a cloud and can be accessed by the property manager as well as the tenant. 

  1. Logging information

By using technology and going digital, a property management company is able to keep information about each property, that they own, on record. All information regards to each property can be kept neatly and safely and in one place online and is therefore easy to access when needed. 

  1. Personalised service

Now that everything has gone high-tech, property managers should be able to complete complex processes quicker. This means that less time is wasted and the correct information is sent those that require it.

There are a number of aspects that you need to consider whenever you are considering property management. It is clear that any industry that we are in today benefits from high-tech innovation, as it keeps your business fresh and makes sure that you are keeping up with your competitors. Most of us now judge a company on their ability to be able to interact with this with ease and also how high tech a company actually is. If you see a company is lagging behind, you often feel that although they may be a good business, you may feel that they are too old fashioned and keeping up with the new way of doing things. There has always been a place for the way we conduct a business in the past, but it is evident that we must now show that your business is interested and keeps up with any trends that are apparent. Even if we don’t necessarily want to import the latest trend and high-tech products into a business, we must be fully aware of them so that we can input them where needed.

Why house prices are so high in NZ

The latest housing affordability report by thinktank Demographia shows that New Zealand scored internationally high on the unaffordable housing front.

Tauranga now the fifth most expensive housing market among more than 300 cities in eight countries, and Auckland close behind.

Auckland’s housing market soars to life

Auckland’s property market ended 2019 on a high, new data from the Real Estate Institute shows.

The number of residential properties sold in December was up 12.3 per cent from the same time last year, at 6285. Real Estate Institute chief executive Bindi Norwell said that was equal to an additional 22 houses a day.

Millennials Are The Property Buyers Of Today, What Exactly Are They Looking For?

The millennial generation are motivated, home buyers. They have represented a great share of the home buying market for the past five years. A majority of them see the home-buying process as affordable as opposed to renting. They are also known to be very selective when it comes to real estate. They have a clear view of what they want and are willing to be patient until they find the exact thing they want when buying commercial property. This has led estate agents and others in the buying market wondering what millennials really want in their home-buying journey. Read on to know the main features millennial generation are looking for in a property. 

SUSTAINABLE DESIGN

Millennials are more socially conscious than their predecessors. They want homes that are equipped with energy-efficient features such as solar panels, energy-saving appliances. Whether it’s finding ways to give back to the community or selecting brands that offer green features, millennials consider sustainability as an important factor in their decision making. It is important that architects and homebuilders keep this latest update in mind as they set the foundation for new communities. New property with these features will definitely appeal to millennial homebuyers. Whether its smart lighting and smart thermostats, they will view these features as necessities not value adds. 

LOW MAINTENANCE

Millennials have shown less interest in fixer-uppers the way their predecessors have been and they do not plan on making repairs and maintenance costs during their home-buying process. Studies have shown that almost half of millennials who purchased new property did so with the intent to skip major repairs and renovations. In addition, most millennials living in areas prone to harsh weather conditions and natural disasters are more interested in buying homes that are built with these conditions in mind. As home builders and architects focus on disaster-resistant building codes and materials, millennials will perceive these homes are worth their investment. The chosen building materials should be equipped with durability and low maintenance features, this will also be an appealing option to the millennial market.

MORE PERSONALISED SERVICE

The buying process implemented by previous generations were entirely different. Homebuyers found their agents through referrals from friends, or simply by walking into an open house. If the house felt right with them then it was a good match for them. But from the introduction of dating apps to subscription-based platforms, the millennial generation has never been more technology-driven and have found new ways to leverage it in their home buying process. Some reports have shown that 81% of older millennials found their home through a mobile app. As a result, the real estate has taken advantage of the many benefits technology has to offer. 

Some companies have partnered with Amazon to offer advanced features like the turnkey home purchase service. The potential home buyer answers an online quiz then is linked up with an agent who is capable of finding the right home for them. This may seem out of the ordinary for older generations but it’s highly acceptable to the millennials.

COMFORT

What a millennial prefers in terms of comfortability may vary from buyer to buyer. They are more interested in getting maximum value for their money. homes that are built with long-lasting materials and specific details appeal to millennials. They are also looking for rooms with additional features such as home theatre, children’s playroom, wine cellars and a gym room. Giving millennials an option to customise as they please will also make them more interested. Whether its a green design,  a pop of colour in fixtures and home appliances, millennials feel more comfortable when they are deeply involved in the final design process. They have increasingly become part of a market segment no one can overlook. Including an open floor plan in living areas is also a valuable feature that will appeal to millennial homebuyers. Learning what they prefer in a home can help you increase home sales and overall customer satisfaction. As they secure their first home mortgage to purchase a commercial property on lease, a home builder should be aware of these features.

PREFERENCES IN WALLS, FLOORING AND WINDOW

Millennial homebuyers are making a shift from carpeting to more modernised flooring types such as engineered wood, bamboo, cork and marble which maybe 18 inches or bigger. Even if they make use of carpet, it is only used sparingly. They prefer the walls to be either plastered or completely smooth. Millennial homebuyers are also making moves to retain original windows, double-glazing and replacing counterweights or sash cords. Or dual pane windows. In the situation whereby they purchase a property from another, they prefer a qualified conveyancer and property lawyer that is also affordable. Comparing conveyancing quotes is very important.

SMART HOME FEATURES

During the home-buying process, millennials see homes equipped with smart features as appealing. They believe that a home integrated with advanced technology will make their lives better. 86 per cent are more willing to spend more money on smart home features. One smart home feature that tends to appeal to millennial home buyers is smart thermostats. This advanced tech learns the temperature a homeowner prefers and makes adjustments to provide an added level of comfort and well-being. This energy-conserving device provides savings to the homeowner. 

Another smart home feature includes home remote access. Wouldn’t you feel at ease knowing you have the ability to remotely control home security? This feature is of great value to the millennial home buyers. The ability to remotely control lights, locks and also view camera feeds through a smart home app gives millennials an additional reason to be more tech-savvy while having peace of mind no matter their location.

Even smart locks is another trending feature that appeals to millennial homebuyers. You never have to wonder if you locked your doors on your way out. With the use of your smart home app, you can easily lock or unlock your doors or set special codes that will lock them automatically. 

Property developers fined $123k

The High Court at Auckland has ordered FFG Investments and Grand Sky to pay the penalty, and $10,000 in costs, following an investigation by the office, according to a statement just issued.

ARE YOU PUTTING MONEY DOWN THE DRAIN IN RENT?

There are a number of reasons people prefer renting a house over buying and most are valid. A reason could be that their current rental unit may ban the ownership of pets while buying a home would in most cases, not present this limitation. Another reason could be their need to diversify assets beyond the stock market. Homeownership, on the other hand, is still preferred by some but its supremacy over renting isn’t well defined as some would have you believe. When it comes to real estate it always boils down to making the decision to “buy” or “rent”. It’s important to make the right decision that will not cost you any financial burden. However, this is not a one size fits all approach, people may have strong opinions but in reality, as well as there are advantages that come with renting there are also great benefits that come with buying a house. It’s up to you to analyse your finances and figure out what decision is best for you. Read on to get a clearer understanding of how renting or buying can influence your housing decision.

HOMEOWNERSHIP CAN MEAN EQUITY

When it comes to owning a home or apartment, you will find that only a few people buy a property with a huge amount of money. The buyer will most likely opt for home loans which is the money used to pay for the house. The home is used as collateral while the loan is paid down monthly. If in any case, the buyer should fail to make payments, the home will be seized by the bank. Part of that may cover insurance and interest costs and body corporate levies.  But other than that, as long as your property doesn’t decrease in value, you will be able to build equity in the long run. With each mortgage payment, you will be saving extra cash in your home equity that you could liquidate in the future. And if you decide to go into commercial property investment or industrial real estate, consider factors such as location, estate planning to prevent your property from depreciating. Not considering factors like these could affect your mortgage payment and prevent possible equity gains.

HOMEOWNERSHIP HAS ITS LIMITATIONS

As you build equity from your homeownership, your monthly housing costs goes beyond mortgage payment and property management costs. There are many more costs to be considered such as taxes, maintenance costs, homes property management costs and homeowners association fees. These are costs you will have to play along as you have a home. Not to mention the costs associated with property lawyers. So it’s important you take these costs into account when deciding to purchase or invest in a property. If you won’t live or own the property long enough to make up for the property expenses you could be better off renting. You can use 5-6 years as a guide to follow if you decide to buy a home but you know that every situation is not so similar.

WHY RENTING MAY BE GOOD FOR YOU

If you plan on moving every few years then renting may be best for you. Since most rental leases last up to one year you’d have the freedom to stay as long as you want. Rental properties may require you to pay a deposit of a month’s rent. This payment is very little compared to the large chunk of money you’d have to use to purchase a home leaving you with free equity to invest elsewhere. On the other hand, each time you purchase a home in a condominium or housing community you get hit with closing fees which are significantly large in amount. Apartment property management costs, mortgage interests and homeowner’s insurance are all expenses you cant recover. If your current situation doesn’t favour you in buying a house then renting will actually be a better option that will save you money and not squander it. Additionally, if you plan to live in a home for less than 3 years and have little money saved for a down payment, consider renting rather than buying.

FIND OUT WHAT WORKS FOR YOU

Figuring out what will work best for you will set you on the right path. Be sure to remember the basics-  purchasing a home will enable you to design and customise it to suit your style and taste. If you’re using the home as your main residence. A financial benefit can be reduced tax bill as a result of paid mortgage interest and property taxes

The longer you live in a home, the more chances you have of building equity along with other benefits of investing in a property. On the other hand, your property investment could end up becoming a disaster if you own it for a very short time. 

In most cases, it may benefit you more to rent overbuy. It depends largely on factors such as time frame, financial condition, future goals and valuation of your local area. Whatever option you choose, just remember to consider all the essential factors needed to make an informed decision. 

RENTING MAY BE SUITABLE FOR OLDER HOMEOWNERS

It’s always beneficial to examine the details of any situation rather than trying to stick to generalised opinion. For instance, an older person with no plans of moving may be considered as a suitable candidate for property investment or ownership assuming they can afford to purchase it. But that’s not always the situation. It may be smart for an older person to rent rather than buy. The fact is that while you may be in great shape to maintain the home presently will you also be able to in 15-20 years? For a 60-65-year-old, many may not provide an answer. Unless you want to be mowing lawns, climbing ladders or opt for farm succession planning at age 75+ and hiring property managers only contributes to the cost of ownership. You’d rather save up the extra cash and reinvest into something else. Finding out the best choice for you may involve a long process but it does present you with direct benefits that may end up saving you money in the long run.