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Trade Me Property Investment Advice

image of Papamoa beach for connect realty blog about property investment

 

In case you weren’t aware, Trade Me provide regular market insights giving you both the latest real estate and rental statistics for New Zealand as well as property advice & news.  In one of the blogs on their site they provide simple tips on getting started in property investment.  A copy of the top 10 questions to ask yourself before investing is shown below, as well as a link to the full Trade Me blog:

 

10 questions to ask yourself before you start:

  1. Can you afford to buy it?
    Work out how much equity you already have, along with any savings, then talk to your bank, finance company or mortgage broker about how much you might be able to borrow for an investment property. Remember, the more you pay over valuation, the less total equity you’ll have across your properties, so ideally you’d be wanting to buy a property below or at valuation.
  2. Can you afford to rent it out?
    Work out how much rent you’ll need to cover interest, insurance and rates costs. Is it realistic for the area the property is in? If not, can you afford to top up the payments and count on capital gain to eventually make it worthwhile? Have a scout around Trade Me Property rentals to get a feel for the area you’re looking at.
  3. Can you cover the interest and renovation costs while you do it up?
    You might want to live in the property while you’re renovating. Can you afford to do this? And can you convince your lender that you can?
  4. How easy will it be to rent out?
    How’s the rental market performing in the property’s area? Trade Me’s Property Price Index provides a monthly analysis of rent prices being sought in listings across the country

    See what properties are already available to rent in the area and what rents are being asked.

  5. Can you cover any length of time when it’s not being rented?
    The reality of renting a property out is that unless you’re really lucky you won’t be fully rented every week. Set a buffer (say 48 weeks rented each year) and base your budgets around this.
  6. Are you buying it for the right reasons?
    Are you buying an investment property because you’d love to live there? Or are you basing it on the numbers? In saying that, you do need to ensure it is attractive to renters in one or more ways – this could be size of rooms, location or the look of the property.
  7. Can you add value?
    Look for ways you can easily add value to an investment property, such as landscaping, painting or upgrading a kitchen or bathroom.
  8. How comfortable are you with more debt?
    Although you’ll be earning rental income, your overall debt will be higher. Have a plan in case things go belly-up – you don’t want to lose your home if you’ve made a bad investment.
  9. Are you aware of tax implications?
    As with any investment, there may be tax implications to consider. Check with your accountant or financial advisor for advice on what you might be liable for.
  10. Does the gain outweigh the risk?
    Investment is all about weighing up risk vs potential gain. Do lots of research, talk to experts and make considered decisions and you’ll be in the best place to go forth and profit.

Read this article on the Trade Me website HERE

Blog image for Tauranga Property investment- Long Term tenants Vs Short term holiday renters

Tauranga Property Investment: Long Term Tenants Vs Short Term Holiday Renters

Blog image for Tauranga Property investment- Long Term tenants Vs Short term holiday renters

With summer arriving many investment property owners are weighing up the option of whether to rent their house to short term summer holiday makers or to long-term tenants.

While there are often quick gains to be made from short term holiday rentals there are also issues associated with this type of renting. For example the following are just some of the hidden problems with short term holiday rentals:

  • Cancellations are quite common, if short notice this can leave you with unoccupied days/weeks and out of pocket.
  • Damage to property. Short term holiday makers are less likely to care for your house and property. Whereas longer-term tenants have to sign tenancy agreements which legally protect you as a landlord.
  • Lack of control on numbers.  In the last few years there have been many reported cases of occupancy numbers in a holiday rental being greater than what was allowed/booked. Unfortunately this can go unchecked, and can result in greater wear and tear on your property.
  • Many online booking sites have ratings and reviews, which can sometimes be difficult for owners if a holiday guest is not happy about their stay.

On the other hand a long term rental requires more commitment from a tenant and stability for a property owner.  Advantages include:

  • Landlords know exactly how much rental income they will be receiving every week.
  • Tenants have to sign tenancy agreements which helps protect landlords rights.
  • A notice period is set so landlords are given plenty of time to organise new tenants should existing tenants wish to leave.
  • Long term tenants are less likely to damage property, and if they do landlords have bonds and/or landlord insurance as cover.

Also, given the current demand for rentals in the Tauranga region, property owners are able to rent their house for a premium to long term tenants.  These tenants are desperate for houses in the areas of Papamoa and Mt Maunganui, and anywhere near good schools.

In addition to the above advantages, landlords can also use the services of a property manager when they choose long term tenants for their property.  Our property management service includes a free market appraisal, REAL Landlord Insurance, set fees, up to the minute reporting and more.

So if you are looking at renting out your Tauranga investment property call Connect Realty today. We care about your investment and want to help you every step of the way.

3 tips For Property Investment In Tauranga blog

3 Tips For Property Investment In Tauranga

3 tips For Property Investment In Tauranga blog

At Connect Realty Property Management we always say there are two key factors in property investing.  First an investor has to find the right property to purchase, which means knowing and understanding the local real estate market.  Secondly, an investor has to know how to manage their investment so they ultimately make a profit.  Both of these factors require professional advice and support.

  1. Have a Balanced Portfolio

The Western Bay of Plenty, and Tauranga in particular, are seeing unprecedented growth.  The latest news is that Auckland buyers are snapping up investment properties in the Tauranga region without even viewing them. As experienced property managers we do not agree with this type of rushed or ill-informed property investing.

In most locations property increases in value over time, but an investment strategy requires clear short-term and long-term goals as well. Sure some investors are looking to turn-over the property quickly, making a small profit on capital gain alone.  However smart investors will keep the property long-term to take advantage of not only a rising market in trending suburbs such as Papamoa, but also rising rental returns in the whole of the Tauranga area.

Our advice is to have a balanced property investment portfolio that spreads risk and balances highly speculative investments with safer lower-yielding ones.  Given the current state of the real estate market long-term property investments (over 12 months) are looking very strong for our area.

  1. Have A Forward Thinking Plan

As part of our property investing service we can provide you with historical trends for suburbs in the Tauranga region, which can give some invaluable insights on property growth and rental returns.  But property investors also need to look to the future and predict which areas will have strong potential for greater than average growth.  We can provide information on key indicators such as new developments or upcoming redevelopments, transport infrastructure plans and even new schools and Council zoning plans.

In the Tauranga area, and Papamoa in particular, family homes are showing fantastic potential for capital growth, especially with respect to the value of the land.  Tauranga, Mt Maunganui and Papamoa are especially attractive to families with children because of their proximity to the beach, shops and good schools.  New motorways have also made commuting times much better for these areas.

Apartments are proving to be popular for young professional singles and ‘empty nesters’.  This is especially the case if the apartment has great views and a car park provided.  Other selling points include extra facilities such as a pool or gym situated onsite.  We manage a number of apartments for landlords in Mt Maunganui and along the Ocean Rd and find these to be well-built and extremely marketable.

We are happy to sit down with you to identify your target neighbourhood and/or target tenant.  Once you have agreed on the area and style of property we can then help you set a price point for rental return.  This information will be invaluable in helping you decide what property to invest in.

  1. Have Your Property Managed

 Investors often underestimate the costs and time involved with owning an investment property.  Besides the initial legal costs and paperwork, being a landlord means you will also have to consider ongoing costs such as rates, maintenance and insurance.  On top of this investors also need to have a good understanding of property law in New Zealand, including tenancy and landlords agreements and laws.

Having an experienced property manager takes the pressure off an investor.  The best property managers do the right marketing to find a suitable tenant, they take care of the all the legal requirements and necessary paperwork, and they ensure your property is maintained to a high standard throughout its tenancy.

If you require more information about investing in the Tauranga, Mount Maunganui and Papamoa areas then give Chris a call.  Chris and her team at Connect Realty also provide a rental and property management service for these areas and have a wealth of experience and advice to offer you.

Freephone 0800 333 221 or email info@connectrealty.co.nz

 

Outdoor Space – Why It’s Important For Rental Properties

Connect Realty Tauranga Property Management Blog outdor space for rental property tenants

We all love the outdoors in New Zealand, and outdoor living is often a key driver for people moving to the Tauranga region.  Here in the Bay of Plenty we have surf beaches, picturesque harbours, long stretches of white sand beaches and more, all adding to the attraction of coastal living.  But it is not just the open outdoors that are important, many rental property tenants also look for a home with their own private outdoor area.

At Connect Realty Property Management we have tenants looking for a range of outdoor areas including large backyards, small low maintenance gardens, apartments with a terrace, BBQ areas, or even just a small area to entertain friends on a summer’s evening.

What many landlords don’t realise is that the outdoor space of a home or apartment can help rent the property, or it can spoil the deal.  While indoor layout and amenities are important, outdoor space is just as significant to many people.  This is especially true in the Tauranga region where our climate suits outdoor entertaining.

From our experience as property managers, outdoor space needs to be easily accessible, sheltered, and preferably easy to maintain.  Well kept gardens that are low-maintenance are the best for properties with large sections.  Examples are bark or stone gardens, shrubs and bushes that don’t require watering or pruning, and easily mowed lawns.  For apartments and flats we recommend providing an outdoor space for a BBQ and room for a small table and chair set.  Small garden boxes can also make a single story or downstairs apartment/flat look more appealing to potential tenants, along with suitable outdoor lighting.

The key is to make sure your property’s outdoor area is attractive and functional.  For some homes this may require alterations such as adding a ranch slider or French doors to connect outdoor space to the home.  Other more simple changes include adding pavers where there will be the most foot traffic, or defining paths by adding railway sleepers and stones or gravel.

We also recommend that you clean outdoor areas before we advertise your property.  Water-blast footpaths, walkways, patios and decks.  Fix broken trellis, reapply grout where needed, remove or prune foliage that blocks sunlight on the house, and remove plants that require a lot of maintenance such as roses.  These simple fixes require minimal investment but can generate maximum returns in rental price and in real estate value in the longer term.  We have a number of ground and maintenance people on our books and can provide quotes for any work you need done on your rental property.

If you require more advice about how to improve the curb appeal of your rental property, or any other rental property investment tips, then call Chris at Connect Realty Property Managers.  Chris has many years of real estate experience and is an expert on all matters about property management in the Tauranga Region.

Connect Realty Blog image for Four Tips To Make Your Rental Property More Inviting

Four Tips To Make Your Rental Property More Inviting

Connect Realty Blog image for Four Tips To Make Your Rental Property More Inviting

Some property investors make the mistake of thinking that every house they buy will be snapped up for rent, but this doesn’t always happen.  Your property may look old and tired, seem cold, or it could lack street appeal.

Fortunately, there are several things you can do to your rental property to increase its rent appeal:

Update Bathrooms and Kitchen

An ugly, outdated bathroom and kitchen makes a house unappealing and will pull down your rental property’s value in the long term. By updating key items such as vanities, bench tops, cabinets and fixtures your property will look modern, fresh, clean and more attractive to potential tenants.

Renovations don’t have to be expensive.  We often share blog posts from interior designers, decorators and inspiring renovation tips from around the world that don’t involve a lot of money.  Think a coat of paint on the walls or cabinet doors, new retro or modern fixtures and handles and a colourful splash-back for the kitchen. Google ‘Update your kitchen/bathroom on a budget’ to get inspired.

Insulation

Good quality, well installed insulation is a necessity in all homes, and a real advantage when renting out a property.  Good insulation will make it easier and cheaper to heat your rental house properly, and more comfortable and healthy for tenants to live in.   Conversely, sub-standard insulation can result in your property becoming damp and attracting mould.

There is funding available for older homes and if your main tenant has a Community Services Card. To find out if you qualify for any government assistance you will need to contact an insulation service provider in your area. Some local councils and banks also have payment options available to help with the cost of installing insulation and heating.

If you are considering the DIY approach, everything you need to know about installing insulation can be found at this link New Zealand Standard NZS 4246:2006 Installing insulation in residential buildings. It’s easy to follow and it’s free to download.

Also consider quality window coverings, such as thermal lined drapes, if your home is an older home.

Heating

Choosing an efficient heating system for your rental property is important for your tenants and also for future re-sell value of your property.

There are lots of heating options for homes, from wood burners and pellet burners to heat pumps and panel heaters.  It’s important to match the size of the system to the space that needs heating and to consider all rooms in the house.  While some heating solutions will have a larger outlay at the beginning they will also add considerable value to your property in the longer term.

If your home provides modern efficient heating you are more likely to attract a quality long-term tenant for your property.

Curb appeal

It’s important to make a first impression. If the outside of your rental property is overgrown and/or dirty in any way potentially great tenants may just walk away.  We recommend you tidy your section before renting out your property e.g. mow and edge your grass, pull out weeds, fix any broken or damaged exterior fixtures, paint tired looking doors or outside areas, and make sure the shed is clutter free.

Most property owners use a property maintenance company to mow the lawns etc, this can be factored in when doing your rent appraisal.

The above tips can increase your chance of renting out your investment property and boost your property’s value.  For more property investment tips and advice call or email Chris atConnect Realty today.

 

Keeping In Touch – Connect Realty Newsletter August 2014

August Newsletter banner for Connect Realty

August 2014

It might still be cold, it might still be wet, but the evenings are lengthening, we can wave goodbye to the winter blues and warmly welcome the arrival of spring with its promise of longer, warmer days, there is a renewed sense of optimism and energy about.

Investing in Rental Property

Whether you are starting out with one property investment, or have a portfolio of rental properties, Connect Realty will partner with you every step of the way.

When investing in Rental property the ideal investor should have a team of professionals working with you –Your Property Manager, Accountant, Solicitor and Financial Mortgage Adviser.

It is helpful that your Financial Adviser understands and knows your property portfolio and your investment strategy. Are you wanting to obtain cash flow through your investments or grow your wealth or a mixture of the two?

There are some amazing opportunities out there with good returns and capital gain – the latest Quotable Value report show value of property in Tauranga still increasing slightly and still up year on year at 5.6% whereas other areas have gone backwards

As a property investor you need to think about your rental investment as a business, and to also protect your investment, this is where having a property manager takes out that uncomfortable part of being a “landlord” when it comes time to rent reviews, inspections etc.

If you would like some advice from a Registered Financial Adviser Call Robyn Johnston from the Loan Market

021 722 043
She is accredited with many Lenders and can assist with getting the loan application prepared to get you a Preapproval for your rental property purchase. Her disclosure document is available on request.
   

 

Bay of Plenty Rental Stats 2014

 

If you are looking at increasing your Rental Portfolio or know anyone who is please contact us, we offer a Free Rental Appraisal Service. 

We do have a few Landlords with investment properties wanting to sell with good tenants in occupation, if this interests you, please give us a call.

Connect Realty  0800 333 221

 

 

 

To read email version please follow this link: Connect Realty August 2014 Newsletter

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Is Your Property Investment Safe Without Working Smoke Alarms?

Smoke Alarm

Smoke Alarm


They answer is a definite No!

Investment properties can be a high fire risk because of tenant behaviour, and many tenants may not even consider smoke alarms as necessary because they are not thinking about the real cost of a fire, this includes putting lives at risk and the value of YOUR investment.

Often the tenant is placing faith in you to provide a safe tenancy for them. Whereas some properties already have a legal requirement to have smoke alarms installed – we believe ALL properties should have smoke alarms installed.

In addition to safety, after a fire the tenant is gone but your bills and expenses will continue all the same. So you should not leave the protection of your asset to your tenant because they do not have to pay the bills or the bank!

For a relatively small price, a working smoke alarm can save your tenants life and protect your property and investment.

At Connect Realty we deal with a company called NSAS (National Smoke Alarm Services). NSAS will provide an annual maintenance service, free battery replacements, testing of all alarms, unlimited inspections and more.

Call us for more information