Innholdsfortegnelse for November 2023 i NZ Property Investor

Generating leads is the lifeblood of any property management company, as it directly impacts revenue and profitability To stay ahead in this dynamic industry, property management companies need to employ effective strategies to attract more leads. Here are some proven tips: 1. ESTABLISH A STRONG ONLINE PRESENCE This is essential for attracting leads. Create a professional and user-friendly website that showcases your company’s services, portfolio, and testimonials from satisfied clients. Invest in search engine optimisation (SEO) to ensure that your website ranks higher in search engine results, making it easier for potential clients to find you. 2. UTILIZE SOCIAL MEDIA MARKETING Social media platforms are powerful tools for reaching a broader audience and engaging potential clients. Maintain active profiles on popular platforms like Facebook, Linkedln, Instagram, and Twitter. Share valuable…

YOUR ACCOUNTANT Firstly, let me say I would never be without a trust. I do not subscribe to the view that you should wind your trust up now that the new trustee act requires some additional disclosures and transparency to your beneficiaries. Life is just too risky. Business life in particular has become litigious and creditor protection is important. Those forming new relationships are vulnerable to devastating outcomes if they fail after just a very short time. And, of course, there has been a strong push from the Left for the introduction of some form of wealth tax which could be a straight tax of asset value, a land tax or even a back to the future reintroduction of death duties. I just don’t feel lucky enough to punt on…

YOUR REVIEW Mum Di Foster had a major health scare a few years ago. Overnight, her whole perspective shifted. She wanted to start a plan like she was going to live to 80 … even though the doctors had told her she might not make it until next Christmas. Here’s how Di used property to secure her family’s financial future. Di and her husband, Steve, wanted the “ultimate lazy investment”. They’d sold two of their businesses, and they’d accepted that part of their life was over. The couple were ready for the next adventure, but it took them a while to get started with property. Residential property had always been on their radar. It seemed like a much more low-key risk, and it was obtainable. Di found her way to…

AUCKLAND NEXT MEETING: Go to www.apia.org.nz/events for details on upcoming meetings. APIA hosts 100 events and presentations for its members each year. WAIKATO NEXT MEETING: Wednesday, November 8, 7.30pm, Workingmen’s Club, 45 Commerce St, Hamilton. TOPIC: A presentation by Use Wolfe - level up on your renovation return. TARANAKI NEXT MEETING: Friday, November 17, 6.30pm start. Novotel New Plymouth, corner Hobson and Leach streets. TOPIC: Celebrate the year with two-course dinner, cash bar and special guest speaker Glenn Brebner, managing director of Boons. MANAWATU NEXT MEETING: Wednesday, November 1, 7 for 7.30pm at the Palmerston North Bridge Club, corner Cook and Cuba streets. TOPIC: Mike Clark, Power of Mindset. Also December 6, Christmas dinner at the Distinction Hotel. NELSON NEXT MEETING: February 2024. CANTERBURY NEXT MEETING: Wednesday, 7.3010pm at Merivale…

In a series of research reports in 2013 and 2014, the New Zealand Initiative claims the country’s foreign direct investment (FDI) regime residing in the Overseas Investment Act 2005 (OIA) is among the most hostile towards foreign investment of those measured by the Paris-based OECD, and foreigners’ ability to invest directly in NZ depends on decisions by bureaucrats in Wellington. It found there is no foundation for fears about foreigners “taking over” New Zealand’s land and resources. The stock of inward FDI as a percentage of GDP is about a third lower than it was 25 years ago. The country’s stifling investment regime reduces the value of NZ’s resources, the briefing paper says. International data shows that well-managed FDI benefits domestic economies. Countries that invite international investors typically boost their…

MATTHEW GILLIGAN Matthew Gilligan is a property investor, developer and tax adviser. He is managing director of chartered accounting firm Gilligan Rowe & Associates, where he heads the specialist property and asset planning divisions. KRIS PEDERSEN Kris Pedersen of Kris Pedersen Mortgages is a commentator on property and finance. His team sources top finance strategies. Phone 09 486 4719, www.krispedersenmortgages.co.nz MARK WITHERS Mark and his team specialise in advising on propertyrelated transactions, valuation and restructure services, and tax planning. Withers Tsang phone 09 376 8860, www.pfkwt.co.nz RYAN WEIR Ryan is managing director and franchisor of Propertyscouts NZ. He’s deputy chairman of the RPMA and is passionate about the property management industry particularly raising industry standards. SHANE CAMPBELL A partner in Wynn Williams’ Dispute Resolution Team, Shane specialises in complex commercial…

HOUSE PRICES: RECOVERING REINZ data shows nationally there was a 2.3 per cent increase in the median sale price rising to $785,000 from $767,500 month-on-month but decreasing year-on-year by 3.1 per cent. Median sale prices have increased in all but three regions month-on-month, with the West Coast (+16.4 per cent), Marlborough (+13.8 per cent) and Otago (+9.3 per cent) leading the way. OCR: STEADY The Reserve Bank’s official cash rate has been held at 5.5 per cent since July after the RBNZ indicated it was at the end of its tightening cycle, although some economists believe it will rise again at the bank’s November meeting. INTEREST RATES: UP ANZ is offering the lowest six-month fixed mortgage interest rate at 7.09 per cent, while Kiwibank has the lowest one-year fixed rate…

One hundred years in the future houses will be, in almost all respects, semi-living, artificial organisms - closed systems with a metabolism, sensory apparatus, immune response and an approximation to a nervous system. Interior living spaces will change as a cloud changes, easily reconfigured and rearranged to suit our fickle tastes, or accommodate different purposes. Imagine walls and floors made of a malleable skin and embedded with tiny sensors and actuators so the shape and size of living spaces can quickly change, or even be divided into smaller rooms. This barely scratches the surface. Imagine homes with a building material salted with dormant limestone-producing bacteria which awaken on contact with moisture and repair a crack or structural damage. That is a futurist’s utopia of how most of the globe’s population…

What design style would you like for your short-term rental: farmhouse, modern, rustic, coastal or traditional? If you are unsure, look at the architecture of your property. If you have a villa, architectural features could be crown moulding, colonial detailing, high ceilings or wooden flooring. In this instance a farmhouse style may be more suitable as your preferred design. If you have a modern apartment with large windows and open living, a modern style may be better. Now that you have your design style, set a colour scheme. Neutral earthy hues set a relaxing and calming tone which works well with existing wooden features. Brass adds warmth to your property. Resene Amaranth, from the 2024 collection, is a popular choice as an earthy tone. If you’re looking for classic neutral,…

YOUR SHORT-TERM RENTAL HIGHER RATES Luxury properties offer comfort and elegance, with a considerable price tag. While “luxury” is subjective, a high-end property typically features upmarket decor and upscale amenities. These include spacious outdoor entertainment areas, landscaped gardens, swimming pools, and sound systems. As opposed to large hotels and resorts, which host hundreds of guests, short-term rentals can offer a home away from home with high-end creature comforts; a huge draw for travellers with larger pockets. At The Stay Hub our average daily rate (ADR) across all property types in the last 12 months has sat at $282*. In contrast, top-end luxury properties can command rates exceeding $5,000 a night. The key to success is focusing on the overall yield and delivering a lavish guest experience rather than trying to…

NZPIF SPOTLIGHT It is understandable that some people and media commentators are concerned National and ACT have committed to removing interest deduction limitations for rental property owners and reducing the bright-line test back to two years. These government policies were sold on the basis that it was removing a tax loophole that allowed property speculators to outbid first-home buyers, and who would disagree with that. The goal was to reduce the number of speculators, thereby lowering demand for property and stop house price increases. Admirable goals. The policy was based on the assumption that “speculators” were the prime cause of house price rises, but unfortunately this assumption was wrong. It was wrong to say that the new law was aimed at speculators as it actually turned out to be aimed…

Q Due to a relationship separation, I am looking at bringing a flatmate/boarder into my owner-occupied property. Are there any tax implications if I have either a flatmate or a boarder? A Firstly, there is a difference between a flatmate and a boarder or homestay student. A flatmate is someone who literally just rents a room from you, but a boarding arrangement goes further than that and generally includes a level of service like providing food, meals and even transport. If it’s a flatmate arrangement, the rental income is taxable, and you must use the actual cost method to calculate deductions. They must then be apportioned between the income earning and the private use of the dwelling. If your expenses exceed rental income the excess loss is ring-fenced. If it’s…

YOUR RATES krispedersen MORTGAGES What a few days! A (in my humble opinion) much needed change of government; an all-time classic win for the All Blacks; and some great news today that the inflation monster is being tamed and rates have likely peaked. This should hopefully create goodwill around the country after what has been a pretty challenging 2023 for many people. Firstly, I won’t go too deep into politics and will focus initially from a mortgage borrowers’ point of view. The Reserve Bank will be looking at the overall fiscal policy of the incoming government over the next few months. National’s tax cuts are potentially inflationary, but they traditionally show a lot more conservativism around how they spend and the state that the outgoing government has left the books…

SUE HARRISON, PRESIDENT NZPIF My main feeling is relief. I feel like property investors are in a safe space again. A recent Stuff story (written by former New Zealand Property Investor editor Miriam Bell) revealed that 94 per cent of landlords owned one or two properties. These are the people that NZPIF represents, and they have been really stung by the changes the last government put in. These changes stung tenants as well as landlords - I do feel that tenants are also in safer hands with the new government. NICK GENTLE, OPERATIONS MANAGER AND CO-OWNER, IFIND PROPERTY The irony is if you look at capital gains, you will always do better under a Labour government. They are in the business of handing out money, and this floats around and…

With the low interest rates, rapid house price growth and the subsequent FOMO of 2021 feeling like an eternity ago, those that bought holiday homes through this period are looking for ways to maximise their yield. Short-term rentals play by a slightly different set of rules than long-terms. Depending on location and target market, there are a variety of improvements and tactics that can be used to maximise yield - whether by increasing occupancy rate, nightly rate, or both. 1. Market research. Identify your target market and study your competitors. Study the language they’re using and the unique points they’re promoting. Hone in on the demographic of your ideal guest/s. Pay special attention to comparable properties with high occupancy rates. 2. Draw up a wish-list. This should include everything from…

YOUR DEVELOPER Building life cycle assessment is a methodology used to measure the environmental impact and energy consumption of a building throughout its entire lifespan, typically across 50 years. The whole use of the building is taken into account for a more realistic portrayal of overall environmental impact, shifting focus away from only looking at carbon emissions produced during the material manufacturing phase. Conducting building life cycle assessments allows us to identify which phases of the build are energy efficient or inefficient, which areas could show improvement, and a study of different construction systems to see which materials perform better or worse at various points of the build lifespan. By analysing energy use across the lifespan of a building we are able to select more environmentally responsible and sustainable construction…

PROPERTY INSIGHTS Many people I talk to believe they have the cover they need, as they have chosen to let their insurer know a property is rented. However, it pays to check if the policy protects you against unforeseen tenancy-related events that can cause financial loss. After all, as soon as tenants are in place more risk is added to the mix. The building and contents policy on your rented property may not cover all your loss unless you have extra specific options. There are two ways to do this: add these options to the existing cover you have through your current company or engage a specialist landlord insurer to run a policy alongside your current one to “fill in the gaps”. Here are six reasons I feel you need…

YOUR LAWYER Developers will be only too familiar with land covenants registered on the title of a property and the challenges they sometimes present. Covenants are used by property owners to limit the future subdivision and development of neighbouring land, usually to preserve the character and nature of their neighbourhood. Typically, obligations or restrictions contained in covenants are binding for any future owner of that property and will often continue without expiry, unless the owners of every property affected agree to modify or “extinguish” them. For developers, where there’s a will there is, on occasion, a way! Where a property owner is bound by covenants or easements, Section 316 of the Property Law Act 2007 (PLA) allows the owner to apply to the courts to have these modified or extinguished,…

NZPIF FROM THE PRESIDENT’S DESK SUE HARRISON By the time you read this we will have an election outcome, but at the time of writing we are still in election promise limbo. Never before has a government hit private rental ownership so hard with higher taxes, while being well aware of increasing interest rates and the likely impact on the rental market for tenants. This has been a major disruptor of the rental marketplace because for most mortgaged investors it has thrown their investing strategy into unforeseen jeopardy. The outcome has hammered tenants because inevitably the costs must be passed on. It has also stalled anything but necessary repairs and maintenance with upgrades to homes being put on the backburner while government coffers are filled. Rental homes have not been…

NZPIF SPOTLIGHT Nicki Smith, a long-time property investor and president of the Taranaki Property Investors’ Association, has been awarded the RentSkills Supreme Award for 2023. And Jackie Thomas-Teague, of Wellington Property Investors’ Association, has received the RentSkills Highly Commended Award for 2023. The judges said both applications demonstrated the two rental property owners were maintaining high quality and positive relationships with their tenants. Smith’s application, which judges noted was very professional and polished, demonstrated outstanding procedures providing plenty of evidence and supporting documentation. Thomas-Teague showed a commitment to sustainable investment properties with Healthy Homes and has climate change top of mind. She has pledged to contribute her prize to further investing in the awareness of sustainability and using products for healthier living for tenants. BEST PRACTICE The 2023 RentSkills Awards…