Coh founder Ben Spence told Newstalk ZB he was inspired by his own shared co-living experience in San Francisco, where he made life-long friends who helped him explore the California city.
So, you live in a super hot rental market that sells houses in a day and rental properties barely stay on the market long enough to get advertised. You’re looking for a gorgeous two bedroom with outdoor space in a prime location, and you’d really like to pay under market value if possible. Oh, and you have a pooch so it has to be animal compatible.
But honestly, with these factors and variables, finding a rental property that you actually like in a tough market is going to be difficult, and we won’t sugar coat it. You’re going to need to put in some serious time and effort and get extremely organised before you even start to look, and then the same applies for when you start to look. Persistence and perseverance will be your top attributes, and a positive attitude will be mandatory. Besides this, there’s also a few important things that you can do to beat the competition and get that rental property you’ve always wanted. Because we want to see you happy in your new home, we’re willing to share these top tips! Read on for more.
We’re sharing our most important tip right at the very beginning. The very best way to beat your competition is to be on top of things right from the get go. Being prepared with everything that you’ll need for the application, references, documents and other odds and ends will mean that you have an edge on the competition. Most renters will wait to fill out any paperwork or to gather what they need after they’ve seen a property, because they don’t know what exactly will be required or because they don’t know if they’ll even like the place.
But we’re letting you in a little secret: Most rental property managers will want basically the same documents and paperwork. This means that you can have a vague idea of what they’ll be looking for, gather it, and get your documents in before anyone else and without having to spend half a day scrambling for payslips and reference details. We’ve listed some of the main things you’ll want before you even start looking for properties.
- Payslips: You’ll want the most recent one here showing what your take-home pay is.
- Bank statements: Most recent should be fine.
- Letter of employment or contract: A document showing that you are currently employed and what your status is (full time, part time, permanent, etc.)
- Passport, visa or citizenship documents: Proof of ID and proof of right to be in the country.
- References and contact details: You’ll want a reference from your previous landlord as well as potentially a character reference from a colleague or professional contact.
- Proof of current address: This can be a utility bill or piece of official mail recently delivered with a postmark.
- Guarantor Information: If you are relying on a guarantor you’ll want their information and most of the above handy, such as payslips and job information.
Fill out application beforehand
If you have access to the rental application, have it printed and filled out before you view the property. While it might seem silly to fill it out before you’ve even seen it, this little bit of prep will mean that you can be the first application in and therefore first to be seen by the property manager. Many property managers will go with the first suitable application that meets all the requirements, so the closer you can be to the top of the stack of applications, the better.
Look in the right season
If you want to live near a university, play this to your advantage by looking at times when students are moving out, versus near the start of the school year when flats will be at capacity. In other areas, winter tends to slow down renters, where spring and summer heats up with competition.
Look the part
If you’re going to be meeting with the rental property management company or the landlord, it’s important that you clean up and look presentable. First impressions do count, and while this isn’t a job interview or a first date, it is important that the landlord sees you as a professional person who is reliable and pays rent on time, which can be conveyed with a professional look.
Have a great cover letter
Simply having a cover letter will boost you ahead of most competition, because many renters don’t think to send one in with their application. Here is a good example of one you can include. Keep it short, concise and well organised, and make sure to include any extras like owning a carpet steam cleaning machine to keep the carpets pristine, or having a long history of good tenancies.
Offer up rent in advance
If you can afford it, this can go a long way with getting you to the top of the application list. Losing money and not receiving rent on time is a huge issue for property managers, so seeing that you have the ability to pay rent in advance shows that you’re committed to the property, and gives the property manager ease of mind. Offering up to 3 months in advance can work wonders with your application.
Think about a longer lease
While this is certainly not for everyone, it is something to think about. Depending on where you live, you may be required to sign a year lease, or month to month. If you really love the place and know that you want to be in this area for longer, consider offering up the option of signing a longer lease. Property managers hate renter turnover and much prefer to have long-lasting and reliable tenants.
Don’t delay with any payments
Once you have secured a successful application, do not delay by any means with any payments due! If you fail to pay the deposit quickly, property managers may simply move on to the next application without giving you extra time. Make sure to get your payments in as quickly as possible to secure the property.
Following these tips will help you reach the top of the competition without having to spend too much time running around the city looking at properties. Remember to be organised and have everything ready to go for each property you view, and you’ll be in your dream rental property in no time!
In 2018, New Zealand passed a law prohibiting foreigners, with a few exceptions, from buying residential properties in order to stop the hike in real estate prices. A government report had previously highlighted that residential real estate had risen by 30 percent in five years, twice as much as wage growth, and even four times more in Auckland. As a result, the homeownership rate had been at its lowest for 60 years.
The new legislation will now prohibit investors living abroad, especially in China, from buying homes in New Zealand, leaving many opportunities for locals, but way less for foreigners. So, what does it mean for the property market in New Zealand? What will be the impact of the law for non-resident and residents?
Is the property market completely closed to foreigners?
The passing of the law resulted from an electoral promise by Prime Minister Jacinda Ardern, who had committed before the election to make real estate more affordable to her fellow citizens. Mrs. Ardern attributed the situation to the growing property appetite of foreign investors with a higher purchasing power superior to the New Zealanders. She even identified Chinese investors as the main culprits for the price hike in Auckland.
The law provides that non-resident investors – people who are neither New Zealand citizens nor permanent residents in New Zealand – will not be able to purchase existing homes or residential land.
However, after the reform, it will still be possible to invest in new buildings of more than 20 apartments by buying off plan, and for rental purposes only. A buyer will no longer be able to occupy the property as a pied-à-terre. In addition, non-residents will still be able to invest in commercial real estate.
Are property prices still on a hike?
For the past 10 years, the property market has seen a huge hike in prices in New Zealand, particularly in Auckland, which is the largest urban area in the country. Property prices peaked in 2017 in Auckland and have remained stable till date. This is mainly due to a heavy shortage of houses in the region compared to its strong demographic growth. The average price of a house was around 916 900 dollars last year, up 2.2% from the previous year.
Since 2010, the number of homes for sale has dropped by 58%, which has pushed up the average price by 88%! This is a perfect illustration of Auckland’s housing shortage. To cope with the issue, especially in Auckland, and to allow New Zealanders to have access to their first home, the labour party is planning on building 100,000 new homes across the KiwiBuild Program. The problem is that the construction industry does not have enough skilled workers to meet the demand. This hampers any rapid progress and considerably increases the cost of construction.
The new law, therefore, aims to make homes more affordable for New Zealand buyers and to slow speculation in the real estate market by banning the purchase of property by non-residents. But in reality, foreign investors make only 3% of the investors… So, it’s not sure whether this reform will have any impact on property prices in the long run.
What could be a good real estate investment right now?
This reform is however likely to impact those who wish to buy a house or apartment as a secondary investment. But each investment project is different in New Zealand, depending on the reason for the purchase of a property. For people who want to get regular rental incomes and mid-term or long-term capital gains, it’s advised to invest in student flats in city centres, where most educational institutions are located, and where the prices are rising the fastest. A flat in the centre of Auckland could be a great and easy investment as the management can be given to rental agencies.
For those who want to buy a secondary residence to enjoy school holidays in the country, the coastal areas and the low-populated hinterlands are beautiful regions with amazing nature, quality transport and the infrastructure, where the property is available at reasonable prices due to limited demand. Think about a house around Lake Taupo or a flat in Queenstown to enjoy the skiing season. You can always put your property for sale later on, as the price should not go down any time soon in these regions.
What you should look at when buying a property in New Zealand
Purchasing real estate will commit you for many years. In addition to investing all your savings in the project, you will commit to repaying a loan over 15 years, 20 years or even 30 years. So it’s better to think carefully about the different characteristics of the property, be it an apartment or a house, and being careful about the conditions of your loan.
Is the rate too high? Is the price the market price? Are there some restorations to be planned and can you finance them? Are condominium fees reasonable? Can you pay the loan, the charges, and the property tax without zeroing down on your account at the end of the month?
Before you start calling a furniture moving company or a shipping container hire enterprise, you have to ask yourself these questions, at the time of your real estate hunt. Also, before you buy in New Zealand, keep in mind these four key points to consider, as per official recommendations.
- Am I free to choose the person or company that manages my property?
- Can I terminate the contract with the person or company that manages my property if it does not suit me?
- Can I choose my own lawyer for the transaction? What about the mortgage advisor?
- Is the person who sells real estate in New Zealand registered as a real estate agent? Be careful, it is mandatory for the real estate agent to have a license with the New Zealand government and not only a real estate agent with the agency.
And with that, we’ve wrapped up our update on the property market in New Zealand.
Most New Zealanders are still making significant capital gains when they sell their houses – but a growing number in some parts of the country are struggling to get what they paid for them.
A real estate agent is now bankrupt after gambling away more than $250,000 which he stole from a business partner to fund his addiction.
While the businessman he stole from has found success after the setback which nearly tipped him under, he says he has not only forgiven the offender but believes gambling should be prohibited.
Property investment is ranked fourth in the list of most common investments, preceded by cash, bonds and shares. There are plenty of reasons to invest in a property – maximise tax returns, to get loans against and to add an extra source of income to the household.
For budding businesses, property investment can supplement them with the income to grow the business further. While most business owners will put their profits back into the business, it is wise to keep some funds aside for property investments.
Property investment can be done in many forms – buy-to-rent, investment trusts, REITs etc., and each has its plus or minuses. The return on investment also depends on what type of property you are putting your money into, like residential, commercial, retail, or industrial. Education is the key; hence in today’s article we will look at different types of property investments, the pros and cons for each, best practices to follow and a few market trends to get you started.
Let’s start with global market trends. We won’t get into the nitty gritty details as that would be a whole other article by itself. Here are some key highlights from across the globe – Trump’s administration has not only affected the growth of America, but has also caused economic activity to suffer across the globe. Increase in the interest rates has slowed down property buying in the US; the rental market however will see bright days ahead. When it comes to Europe, Brexit may cause the Eastern and Central European property market to surge. Lisbon is the hotspot to invest in, in 2019. In Hong Kong co-living is on the rise. Foreign investments become easier in Cape Town, where as local investment becomes difficult. Property market in Australia takes a hit, where as in New Zealand, the market is in good shape and is predicted to grow further.
Now moving on to popular property investment types and how they fare against each other.
Property investments are divided into two categories – direct and indirect.
Direct investment is when you buy the property directly, either to give it on rent or to sell it in the future for a profit. Indirect investments in when you invest in property fund. In this case you don’t own the property,you hand over your funds to fund manager or a investment company who in turn invests them into a property or in property funds.
Investment of any kind comes with a risk, the only difference is the scale of that risk. Fixed investments, saving accounts, cash investments are generally considered low risks, whereas property investments and share are considered high risk due. Property investments, whether direct or indirect, will yield you returns in the long term as the market fluctuates intermittently. It is always advised to diversify your investments, or more simply put, do not put all your eggs in one basket.
Buying property directly, whether to rent or sell, comes with its set of risks, and some of them are as follows:
– Buying any property requires a substantial sum, even if it’s something small like a shipping container home. And unlike other assets, it takes a long time to sell a property and make a profit.
– You are investing a high amount in a single asset, so it is a big commitment, and bigger the commitment, the bigger the risk.
– You need to go through agents, fees, stamp duty, taxes, conveyance fees etc. in order to transact when buying or selling the property, these are a few things most don’t take into account and are later blindsided by.
– Maintenance of a property is a time consuming and a costly affair.
– Loans and mortgages are commonly used to buy a property, and these come with even more risks. There is no guarantee one will possess enough money to recover the loan, or if the cost of mortgage goes up and if one fails to pay the instalments, the banks or the mortgage provider can take the property away.
There are several options when it comes to buying a property indirectly – property trusts, investment trusts, REITs, Insurance property funds, offshore companies or shares in listed real estate companies are some of them.
Indirect property investments requires low capital investment and hence is assessable to individuals who want to invest in a property but do not have sufficient income to buy one or do not want the commitment that comes with buying a property. This gives them an opportunity to dabble with the market, with a significantly smaller sum. The fund is managed by professionals with years of experience behind them and who can read the markets better than a layman. Professionals often diversify their investment so as to lower the risk of any major loses.
While professionals know what they are doing, it does come with the downside of not having as much control on your investment as it would if you were investing it personally. Hence, trust and reputations are important when investing with a professional. Their experience and market know-how and ability to predict market fluctuations is what will eventually determine the returns you get on your investment, so choose wisely. Here are some of the largest property management companies in New Zealand to help your search.
Last but not the least, investing in a property means investing long-term, and for this asset to hold its shape long term, regular maintenance is required. This means getting the house pest-controlled ever so often, getting renovations done, making additions to increase its resale value, and in case of buy-to-let, getting rental appraisals done in order to get the maximum benefit out of the investments. You’ll also need to keep a list of emergency local authorities (local city corporations, police, fire-department, local housing co-corporations, flood cleanup companies, natural disaster corporation etc) and hiring a caretaker for your properties overseas or those that falls in other states or region than the one in which you reside.
Investing in a property is not easy, and certainly not cheap, so in order to make an informed decision, look for professional advice wherever possible. Take the time to do your research, and do not make hasty investments, and most importantly be patient through the process!
Let’s start with the basics. To pick the right rental property, be it brand new homes or old fixer-uppers, you need to know what you are investing into, how you intend to recover the costs and the benefits that come with it.
An investment property is essentially any real estate that is not bought with an intention to use or inhabit. These are generally bought with the intention of getting the returns by flipping, renting or holding it until the market goes up to make a profit on the selling price. A rental falls under the category of an investment property.
A rental is a property that the investor buys with the intention of renting it, in order to gain returns in terms of monthly paychecks. Rentals can be of different types – residential, commercial, retail, etc.. Single-family homes, apartments, duplexes, and similar properties fall under residential rental properties. The tenants generally lease the property for a longer duration as compared to the commercial tenants. Such properties are generally owned by individuals or families. Commercial rentals can consist of properties used for commercial purposes, where the tenants occupy the property short term; this includes properties such as hotels, motels, office complexes, and retail warehouses. These are generally owned by large corporates.
Direct property investments such as owning a rental come with tax benefits, which indirect investments lack. On the other hand, a rental owner has to do their bit as a landlord in terms of facilities management, maintenance and legal upkeep of the property.
Now that you know what a rental is, it’s time to know how to pick the right one! We’ve listed down some tips to make this monumental task a little bit easier.
INVEST IN A SINGLE FAMILY HOME
Test the waters before you dive in. A single family home is easier to maintain, costs less and is easier to rent out as compared to a multi-family property. The house has less wear and tear as you only have a single tenant. It will allow you to dabble with book-keeping, repair, and other duties that a landlord bears, to see if you are cut out for it before taking on a larger project. Bigger properties also mean more taxes and more maintenance costs, and the supplementary rental income you make may not cover these costs. So, start small!
TIMING IS EVERYTHING
Buying any property cost big bucks, so a thorough evaluation of your finances is needed before you take the leap. Don’t invest because the top investment gurus say so in their webinar. Always assess the situation at hand, and make an honest evaluation of your financial standing. Here are a few points to consider.
– Will investing in a home/property affect your daily finances? In other words, can you continue to live a comfortable life after this substantial investment?
– What is your credit score?
– Is your down payment of 20% taken care of? This is likely the minimum you would need to get financing.
– Have you taken into account the closing costs?
– Would you be able to take on any repair or unforeseen expenses before you rent out the property and be able to make the monthly bank or mortgage payments
– Can your primary residence (if you have one) be used for financing?
If you are hesitant over any one of these points, hold off until your sort the issues and only then invest in a property.
LOCATION IS KEY
Property investment is a long term investment, thus it requires extensive research and planning. You can never research enough while buying your first rental. Job, population and infrastructural growth are the three markers that you should look at while researching for the ideal location. Let’s take a quick look at each of these in more detail.
Increase in the number of jobs: What makes a strong real estate market? Economic stability. What contributes towards it? Increase in the number of jobs in the market. The logic is simple, more jobs = inflow of potential workforce = need for housing + better financial standing = favourable market conditions.
Population Growth: Take any major city as an example, and one of the prominent reasons for the real estate boom in that city is most likely to be a population explosion. When demand exceeds supply, the market is tipped towards the seller and provides the seller with opportunities to capitalise on these favourable conditions.
Infrastructural Growth: The growth of the city and the above-mentioned points go hand in hand. As the infrastructure in the cities gets better, the standard of living and means to earn a livelihood improves, which attracts more and more people to that market, making it ‘THE’ location to invest in.
To find a location that would meet the above criteria requires extensive research and know-how of the real estate market. Getting professional help is recommended.
The majority of homeowners use a mortgage to buy a property, hence it is important to understand how it works in order to bring down your costs. Using leverage to borrow against will free up some of your finances which you can then use towards repairs and other expenses. It’s best to hire a refinance lawyer to read between the text in order to avoid any legal pitfalls.
DO A THOROUGH BACKGROUND CHECK
You bought a rental to rent it out to tenants, which makes them the significant other in this equation. If you want your rental to work, doing a thorough background check on your tenants is important to avoid future hassles. You can do this by checking their credit score and the landlord-tenant records in your area. Set down certain expectations right from the start, always in writing to be doubly insured. The next step is to contractualise the deal, and hiring conveyancing solicitors to draw up your legal papers is always a good idea, even if it means shelling out a little extra.
MAINTAIN A GOOD RAPPORT WITH THE TENANTS
No one wants a landlord from hell. While it is important to draw boundaries and set rules, don’t be unreasonable. Abide by the local rental regulations. Develop a rapport with the tenants. Help them out by suggesting friendly movers. Don’t ghost out once the deal is closed; be attentive to maintenance and repair requests and always value good tenants. It takes two to tango so make sure you are in tune.
These top tips will help you not only purchase your rental property, but make it a successful purchase that will reap long term rewards!
Workotel was established in Upper Riccarton in 2013 as a joint venture between Singaporean company Tee International and Christchurch construction and development company Artmatic Holdings.
Kiri Barfoot, a director of Barfoot and Thompson which manages around 16,500 rented Auckland properties, said that last year, rents only rose 3.2 per cent across all categories.
But in this year’s first quarter alone, CBD rents for properties which are mainly apartments jumped 9.69 per cent and rents for two-bedroom places across the entire city are up 4.62 per cent.
It’s the perfect house. It has everything inside you could possibly want, and you are absolutely in love. You know without a shadow of a doubt that this is the one, but there’s just one tiny problem that you can’t shake. You can’t change it, you can’t renovate it, and if you buy this house, you’ll be stuck with it forever. It’s plain and simply, just the wrong location.
For some people, the location of their new house is at the very top of their search lists. They won’t even look outside a certain radius for multiple reasons. Some of us have kids of school age that we don’t want to pull out and move them to a new school. Others refuse to move far from work or family. But there are those who may look to sacrifice the location of their dreams, for the house of their dreams.
For those of you who have found the perfect house, but in the wrong location, there’s plenty of ways to make the most of your new home. Let’s go through some of our favourites.
Up your resale value
If your location’s aesthetic, safety level and/or undesirable features stay relatively the same for decades to come, you might have a bit of a hard time selling it when it comes to that. To make sure that you have got a home that will sell eventually, make sure you complete a meth residue drug test before you even move in. If anyone asks when you go to sell, you can ensure that the home was cleared from meth residue before you moved in, which is a good selling point especially in a bad neighbourhood.
If there aren’t a lot of new houses in your neighbourhood, this is your perfect chance to make your home shine. That way when it comes time to sell, your house will stand out from all the rest by a mile. The exterior will be just as important, if not more important in this circumstance, than the interior. Making a good impression in a bad neighbourhood may help sway a buyer towards considering your home. Think about potential buyers driving through the neighbourhood, perhaps discouraged by the sight of it, and then driving up to your house for sale that’s gleaming with fresh paint and sparkles inside with new appliances. This is vital for selling your home quickly.
For the external, make sure the house is freshly painted before you think about selling, and the landscaping is clean, bright and tidy. Hire a landscape designer to help you out if you’re needing a quick revamp to your landscaping. For the interior, brand new appliances are always a huge selling point. Make sure any obvious fixes are fixed, like a broken hinge, a cupboard door that’s hanging off, or cracks in the wall. These seemingly small things that you have lived with for years can be an instant bad impression on a buyer. Use some of these ideas for increasing resale value as well.
Keep your security up to date
If the neighbourhood is really bad, you might consider keeping certain valuables, documents, jewelry, etc. out of the house. Think about a container rental or other type of safe place away from your home to keep the most important things. Make sure to install a home security system upon moving in. You might consider CCTV installation at the same time to amp up the safety.
Here are some additional tips to burglar-proof your home.
Look to the future
The truth is, nothing stays the same, and everything changes whether we want it to or not. Even if you had found your perfect house in your perfect neighbourhood, there’s no guarantee that in 10 years it’s exactly the location you wished for. Some areas of town that started out rough can turn into gems with a bit of city planning and community involvement. You might even consider getting involved in your local city council to see what kind of difference you can make for the future of your neighborhood!
It can feel a bit painful to sacrifice your ideal location for the perfect house, but it’s important that you stay optimistic. Perhaps you had to take your child out of their school and away from their friends. To be honest though, children are extremely adaptable and will surely make new friends and barely be fazed by the move within a year or two. That extra 30 or 40 minutes for your commute to work might be frustrating and annoying, but try to not think of it as that. Use that extra time for listening to your favourite music or podcast (try one of these amazing podcasts to get you started). You might even be able to negotiate different work hours or flexible working with your boss, considering your changed circumstances.
Be positive about the little things, like how friendly the movers were when you moved in, and how you’ll be able to explore a brand new part of town now. There are hidden gems of restaurants, coffee shops and retail shops all over a city, and you might have stumbled upon a heap of amazing places that you just haven’t discovered yet. Get curious and don’t be afraid to explore.
Remember that a bad location isn’t always a bad location for every single person out there. Circumstances change all the time, and while the location can be terrible right now, for you specifically, that doesn’t mean that it’ll always be that way, or that no one will ever buy your home when you sell it. Use these tips to keep your home fresh and updated, be positive about the future, and you’ll start to remember why you purchased this home in the first place – because you fell in love with the house!