Truths
Truthhs
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Contents REINZ Regional Commentary . . . . . . . . . . . . . . . . . . . . .2 & 3 Buying a Home – must do . . . . . . . . . . . . . . . . . . . . . . . .4 & 5
Manawatu / Wanganui REINZ REGIONAL COMMENTARY
DML Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Know Real Estate Jargon . . . . . . . . . . . . . . . . . . . . . . . . .6 & 7 Metro Fires . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Know the Disclosure Rules . . . . . . . . . . . . . . . . . . . . . . . .8 & 9 Importance of a Building Inspection . . . . . . . . . . . . . .10 & 11 Dewhurst Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Guthrie Bowron . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Alpha Doors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Hooker Pacific Moving & Storage . . . . . . . . . . . . . . . . . . . . 15 Loaders Landscape Supplies / Property Investing . . . . . . . 16 Property Investing / Creative Aluminum . . . . . . . . . . . . . . . . 17 Buying a Rental Property . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Keeping Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Small & Big Jobs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Property Management Safety Awareness . . . . . . . . . . . . . . 21 Spotting Good Tenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Ending a Tenancy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
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“In contrast to other regions, there are more first home buyers across the Manawatu/ Wanganui region with anecdotal evidence suggesting that increasing numbers have reached the deposit threshold
T
HE median price across the region rose $45,000 (+19%) compared to June 2016 to reach another new record high. Prices rose 34% in Manawatu District, 29% in Horowhenua and 25% in Rangitikei. Compared to May the median price rose $10,000 (+4%), with prices rising 14% in Horowhenua, 13% in Tararua
and unmet demand. The investor market is being increasingly dominated by Auckland buyers with local buyers on the sidelines. The market is robust.” REINZ Chief Executive Officer Bindi Norwell and Manawatu and 5% in Wanganui. On a seasonally adjusted basis the median price rose 2% compared to May, indicating that the increase in prices was slightly higher than normal for June. Sales volumes fell 16% compared to June 2016, with sales rising 23% in Wanganui, but falling 7% in Tararua and 12% in
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Truthhs Ruapehu. Compared to May sales volumes fell 23%, with sales rising 10% in Whanganui, but falling 22% in Horowhenua and Palmerston North. On a seasonally adjusted basis sales across the region fell 12%, indicating that the drop in sales was greater in June than would normally be expected. The number of days to sell improved by one day compared to May, from 35 days in May to 34 days in June. The number of days to sell also improved by four days compared to June 2016. Over the past 10 years the average number of days to sell during June for the region has been 55 days. The level of inventory available for sale has fallen by three weeks compared to June 2016 to stand at 13 weeks (-20%).
3
MANAWATU-WANGANUI REGION TRENDS
PRICE
VOLUMES
DAYS TO SELL
MEDIAN PRICE
OVER ALL
VOLUME SOLD
Jun-17
May-17
Jun-16
Jun-17
May-17
Jun-16
Horowhenua District
292,000
256,800
227,000
58
74
92
Manawatu District
355,000
315,000
266,000
34
51
41
Palmerston North City
355,000
355,000
317,000
106
136
126
Rangitikei District
195,000
195,900
156,000
13
27
25
Ruapehu District
98,000
200,000
150,000
23
38
26
Tararua District
170,000
150,000
160,000
25
39
27
Whanganui District
200,000
190,000
175,000
74
67
60
Manawatu-Wanganui Region
280,000
270,000
235,000
333
432
397
Vs…
May-17
Jun-16
Vs…
May-17
Jun-16
Horowhenua District
13.7%
28.6%
-21.6%
-37.0%
Manawatu District
12.7%
33.5%
-33.3%
-17.1%
Palmerston North City
0.0%
12.0%
-22.1%
-15.9%
Rangitikei District
-0.5%
25.0%
-51.9%
-48.0%
Ruapehu District
-51.0%
-34.7%
-39.5%
-11.5%
Tararua District
13.3%
6.3%
-35.9%
-7.4%
Whanganui District
5.3%
14.3%
10.4%
23.3%
Manawatu-Wanganui Region
3.7%
19.1%
-22.9%
-16.1%
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Truthhs
4
Four things you MUST DO
B
UYING A HOME is a big deal. It’s likely to be the most expensive thing you buy, and it can be a complicated legal process. It’s even tougher in a hot market, where there is a lot of competition for a limited number of properties. It might be tempting to take a few shortcuts, but failing to do things properly could cause more problems later. Here are our top four tasks for home buyers.
RESEARCH THE PROPERTY The real estate agent selling the property acts on behalf of the seller, however they are also required to tell you everything they know about the property. They must respond professionally to all your inquiries and not withhold
any details. Remember that you still need to do your own due diligence. That means getting a title search so you can find out all the facts about the property’s ownership, boundary and access, as held by Land Information New Zealand (LINZ). It’s a good idea to get a Land Information Memorandum (LIM), which shows information held by the local council about the property and land. For valuable feedback on the property’s condition, get a report done by an inspector who has professional indemnity insurance and carries out their work in accordance with the New Zealand Property Inspection Standard. Although this all costs money, it will save you more in the long term. Sellers may
By Lucy Corry Real Estates Agents Authority
occasionally provide some of this information for you. If this happens, check that it is up-to-date.
GET LEGAL ADVICE Buying property is expensive, and it can cost even more
if something goes wrong. That’s why it’s important to get legal advice before you sign anything. A lawyer will handle all the paperwork involved in the process, including the title search, and offer impartial advice. If you
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Truthhs don’t have a lawyer, the New Zealand Law Society can help you find one at propertylawyers.org.nz.
UNDERSTAND THE SALE PROCESS There are several methods of buying and selling property, for example, tender or auction. It’s important to understand the process for the property you are buying. Practices can vary between agencies so make sure you confirm details with them. The Home Buyer’s Guide at buyingahome.reaa.govt.nz has more helpful advice.
READ THE SALE AND PURCHASE AGREEMENT The sale and purchase agreement is your contract with the seller. It is crucial to read it very carefully and get legal advice before you sign. You can negotiate the
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terms and conditions of an agreement, but once you sign it, there’s no going back. Want more free and independent advice on buying a property? Check out the Home Buyers’ Guide at buyingahome.reaa. govt.nz. If you still have questions, call the Real Estate Agents Authority (REAA) on 0800 367 7322 (call 04 471 8930 from a mobile phone).
BUYING PROPERTY IS EXPENSIVE, AND IT CAN COST EVEN MORE IF SOMETHING GOES WRONG.
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Truthhs
6
Know the Real Estate
E
VERY INDUSTRY is full of jargon and buzzwords that make no sense to anyone who’s not part of the club. Real estate is no different, which means it can be hard to get up to speed. Here’s a handy guide to some of the most common terms you’ll come across when buying or selling property.
AGENCY AGREEMENT If you are using a licensed real estate agent to sell your property, you’ll need to sign one of these agreements — it sets out what the agent will do and what they will be paid. Remember you can negotiate the conditions, such as who pays for marketing and how much the commission is. Make sure
JARGON
you get legal advice before you sign.
BEO or BBO This stands for ‘Buyer Enquiry Over’ or ‘Buyer Budget Over’, which means the price listed on the advertisement indicates the minimum the seller will accept. The seller actually needs to give serious consideration to any offer over the BEO, so this figure needs to be selected carefully.
though it may be stated in the advertising that ‘no offer will be accepted prior’. Check the fine print.
LIM This stands for Land Information Memorandum, which contains everything
DEADLINE SALE or DEADLINE PRIVATE TREATY In this kind of sale, a property is marketed for a set period (with an advertised end date). The seller can choose to accept an offer at any stage during the listing period
By Lucy Corry Real Estates Agents Authority
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that the local council knows about the property, such as any issues with drainage and plumbing, erosion or permits. It will help you identify if any additions haven’t got the right consent. It will also record any unpaid rates.
Truthhs SALE and PURCHASE AGREEMENT This is a legally binding contract between the buyer and seller for the purchase/ sale of a property. It provides certainty to both parties and it sets out in writing all the agreed terms and conditions. It’s essential to get legal advice before you sign an agreement — and that you read and understand what it means.
SETTLEMENT This is the end goal in a property transaction, when the sale and purchase is completed by the exchange of property and should not be assumed to be a market value for a property when it is for sale as the rating valuation may be a number of years old. It is also not responsive to local market fluctuations and may not reflect
any recent renovations. This was formerly known as ‘Government Value’, or GV.
TENDER If a property is for sale by tender, prospective buyers must submit confidential written offers by a set date. Usually there is no minimum price, but properties are often listed with a BEO or BBO price. The seller can then choose the offer that is most acceptable to them, based on the price and any attached conditions. The most attractive tender is likely to be one that combines a good price with few conditions. Sellers are allowed to negotiate with any one or more of the tenderers received after tenders close. For more advice about buying a property, check out the REAA’s free guide at buyingahome.reaa.govt.nz.
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Know the disclosure RULES
R
EAL ESTATE advertisements are designed to make every property look like a dream buy. It’s no crime to gloss over a property’s quirks, but lying by omission or design about more serious matters is not allowed. If you do this when selling your property you may be at risk of being sued by the purchaser. When you’re ready to sell your property it’s a good idea to get legal advice about your obligations before you sign an agency agreement. Most of these agreements, which set out the terms and conditions of your contract with the real estate agent, require you to confirm that you are unaware of any undisclosed defects in the property and that you haven’t
withheld any information about it. As a seller, you must also confirm that your property has all the necessary consents and code compliance certificates for any building work. Any outstanding consents, including ones that involve any works at a neighbour’s property, should be disclosed to the agent. This is important for several reasons. Licensed real estate agents have clear obligations when it comes to disclosure. They must not mislead a seller or a potential buyer, or withhold any information. While it’s not up to the agent to uncover any hidden defects in a property, they must tell any prospective buyers what they know.
Under the Real Estate Agents Act 2008, if licensed real estate agents suspect that a property may have a defect then they are obliged to ask the seller about it, or advise potential buyers of any risks. For example, if a property is next door to a proposed new development, or if it’s in an area that’s
By Lucy Corry Real Estates Agents Authority been subject to flooding, the agent must tell prospective buyers rather than turning a blind eye. If your property may be prone to weathertightness issues thanks to its age or cladding, then the agent may have to disclose this potential risk to prospective buyers. If it doesn’t have
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any weathertightness problems it may be worth getting this confirmed in an expert report by a qualified building inspector who has professional indemnity insurance, understands the strict legal requirements of their role and carries out their work in accordance with the New Zealand
Property Inspection Standard. This will help make the sale process as efficient as possible. If you know there are issues with the property, whether it’s something small like a garage door not working properly, or a bigger deal like an unconsented deck, it’s best to discuss
9 them with the agent you are working with. They can help you decide how to manage the problem, whether that means fixing it, or disclosing it to potential buyers. However, a licensed real estate agent must not disclose any problems with your property to buyers without getting your consent first. If a seller doesn’t agree on a disclosure, the agent is required to stop working for them rather than disclose any defects without consent. These rules offer more protection to buyers than the traditional attitude of ‘caveat emptor’ (buyer beware), which assumed the seller would always know more than the buyer and any sale was at the buyer’s risk. However, buyers should always do their own research about a property before signing a sale and purchase
agreement. Buyers should also ask the agent about anything they are concerned about, no matter how trivial it may seem. It’s far better to get an answer upfront than find out when it’s too late. For more independent advice about selling your property, check out sellingahome.reaa.govt.nz
IF YOU KNOW THERE ARE ISSUES WITH THE PROPERTY IT’S BEST TO DISCUSS THEM WITH YOUR AGENT
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Truthhs
10
The importance of a building INSPECTION
W
OULD YOU GET a mechanic to inspect a used car before you bought it, or would you just get a mate who knows a bit about cars to take a look? Prospective property buyers face a similar conundrum —do they pay for a building inspection before making an offer, or just ask a builder friend to check the place out? Buying a car is worrisome enough, but the emotional and financial stakes are a lot higher when it comes to buying property. If you’re going to make a serious investment in something that will have a huge impact on your family’s health, wealth and wellbeing, it pays to get the best advice you can. Ideally, this means engaging a building
inspector who can identify significant defects, future or urgent maintenance issues and problems caused by gradual deterioration. They will look for structural problems, any evidence that the property is a leaky building, issues caused by deferred maintenance (such as weatherboards rotting due to peeling paint) and areas where there is damp or mould. This is a visual inspection—a building surveyor will check in the ceiling and under the floor, but they will not cut holes in walls or carry out any other invasive testing. The whole property should be checked, including fences and any garages or sheds. They will collate their findings in a detailed and easily understood report.
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By Lucy Corry Real Estates Agents Authority
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Getting a good property inspection carried out isn’t cheap though, particularly if you’re unsuccessful in buying and have to repeat the process. You have a range of choices, from enlisting a builder mate
to using a qualified and insured inspector. You can also make an inspection a condition of your offer on a property. If you choose this option, the report must be prepared by a suitably qualified building
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Truthhs inspector in accordance with accepted principles and methods. If you then use the report’s findings to get out of the contract, you must provide the seller with a copy of it. Either way, the more you invest in this exercise the safer you will be if things don’t turn out as you had expected. The property pre-purchase inspection industry is not regulated in New Zealand, however the Real Estate Agents Authority (REAA) recommends using a qualified building inspector who has professional indemnity insurance, understands the strict legal requirements of their role and carries out their work in accordance with the New Zealand Property Inspection Standard. This is important because they will help protect you if something goes wrong later on. If you discover problems with
the property that should have been evident in a building inspection, you can make a complaint to the professional body that the inspector belongs to and seek compensation. If you buy a property based on a report by someone like a builder mate who is unqualified and/or uninsured, you could end up owning some expensive problems. Even worse, you may severely limit your ability to seek damages if the property has significant issues that would have been picked up by a more thorough inspection. You have limited other avenues if things don’t turn out to be how they were represented to you. You may be able to rely on the warranties included in the sale and purchase agreement by the seller. They are required
11 to confirm that (among other things) any work they have done on the property was carried out in accordance with any necessary permits or consents required by law. You may also have other legal options which you should speak to your lawyer about. REAA strongly recommends that you speak to a lawyer before you sign the sale and purchase agreement. If you are looking to buy it’s a good idea to get in touch with a local building inspector as soon as you start your property search. Ask friends and family for their recommendations and request a sample report from any inspector you contact to get an idea of the kind of information they provide. Real estate agents can sometimes offer building inspection reports to prospective buyers on
behalf of vendors. Treat these as a starting point rather than a definitive diagnostic guide. Paying for your own report means you know the credentials of the person who prepared it, you can be sure of its impartiality and you can seek redress if needed. Depending on what a building inspection finds, you may be able to use a report to help you negotiate with the vendor over price or repairs. Even if a report only finds minor issues, you can still use it as a road map for future maintenance.
The New Zealand Institute of Building Surveyors and the Building Officials Institute of New Zealand both hold lists of qualified property inspectors. See buildingsurveyors.co.nz or boinz.org.nz for more information.
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12
Some truths - PRE SETTLEMENT Inspect, and get what you expect.
By Stacey Hyland LLB (Hons)
T
HE standard ADLS real estate agreement allows a purchaser to inspect a property before settlement. We recommend the purchaser inspects the property as close to settlement as possible, but no later than one or two working days before the settlement date. At a pre-settlement inspection, a purchaser is checking that chattels are in working order, and are in no worse condition than they were in when the agreement was signed (fair wear and tear excepted). A purchaser should also check the property is generally in the same condition as it was when they initially viewed it.
Purchasers must be careful and diligent when they initially view a property. Often, damage is not apparent (e.g. holes in walls or cracks in concrete) until personal possessions have been removed. Once revealed, a purchaser is unlikely to be able to claim for such damage because the damage existed at
the time the agreement was signed. If a purchaser finds new damage at a pre-settlement inspection, or if a chattel is not in working order, then a claim for compensation may be possible. Any pre-settlement claim must be made at least one day before settlement. Only in very limited circumstances can a purchaser cancel due to damage to the property. So, expect to settle, and resolve the dispute later. If the vendor agrees with the claim, the purchaser may deduct the claimed amount from the purchase price on settlement. If the vendor disputes the claim, a reasonable amount can be put aside (in a stakeholder account)
pending the resolution of the claim. Often, claims are minor and are resolved by agreement or through the Disputes Tribunal. Purchasers are often surprised that the standard agreement does not require the vendor to mow the lawns or leave the property in a “clean and tidy condition”. However, if a vendor leaves rubbish on settlement, the purchaser may be able to pursue a post-settlement claim for its removal costs. Purchasing a house can be a stressful time. You can reduce your stress by inspecting the property thoroughly when you first view it (before signing) and again before settlement. If any issues arise, talk to your lawyer.
Truthhs
13
Guthrie BOWRON
I
F YOU NEED help planning your decorating, all you need to do is ask. We’re always happy to bring expert advice to you, in your home. We provide advice on colour, design, and materials, and can give you a free measure and quote for curtains, blinds and flooring.
WHAT KIND OF LOOK DO YOU WANT? Before you decorate, decide what you want to achieve. The easiest way to start might be to find an existing look that you like. When you’ve found some inspiration, let us help you create a look you’ll love.
WORKING WITH COLOUR When choosing colours remember that the actual
colour you’ll see in your home is determined by many different factors, such as the surface and the available light. Colours are closest to their true appearance in outside daylight, or in light from a window that does not face the sun. The best way to decide on the colour is to take a sample and see it in situ, and you’ll get a better impression of just how it works in your space.
COLOUR THEORY Primary Colours The three “primary colours” on the spectrum are red, yellow and blue. When you mix two of these colours together you create “secondary colours”. These are orange, green and violet. When you mix a primary colour with its adjacent
secondary colour you create a “tertiary colour”, classed as third in order. Warm Colours Warm colours are red, orange and yellow. They are the colours of fire and sun. Warm colours tend to come toward you or feel closer to you, and make a room feel cosy. Cool Colours Cool colours are blue, indigo and greens. They are the colours of water, ice, pastures and sea. Cool colours tend to go away
from you or recede, and open a room up, making it feel bigger. Complementary Colours Achieve a balance between ‘warm’ and ‘cool’ when creating a colour scheme. Complementary colours are opposite each other on the colour wheel. The same two colours that are opposite each other, when put side by side, contrast with each other. Complementary colours when mixed together produce a neutral or grey colour.
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Truthhs
14
Have you got
GARAGE DOOR ISSUES?
Let Luke and the team at Alpha Doors help you out
F
OR ALMOST 10 YEARS now they have been providing garage doors to new homes and buildings, repairing garage doors, and installing auto openers. Based here in Wanganui they are the team that have put in the hard yards and know what is required to get the job done right. Using only high quality New Zealand Colour Steel with no thickness under. 55 and high quality belt driven auto openers, they ensure that you not only get the best quality products and service, but with a very competitive price. Alpha Doors specialise in a type of ‘fingersafe’ sectional door which ensure you and your family do not have the unfortunate experience of
getting your fingers caught between panels. This profile also eliminates water that gets trapped between panels, which ensures no drips on the floor when opening your garage door. The Alpha Doors range includes Sectional Doors,Roller Doors, Sliding Doors, Tilt Doors, Roller Shutters, Bifold Hangers, and Auto Openers in either domestic or industrial grades. There is a huge range to choose from. Auto openers are also a popular option, which can be fitted to your existing or new garage door. Alpha Doors can also provide the advantage of a qualified carpenter. Luke, (who started the company in 2008) is a licenced builder, who is in a unique position to look
after any building work that is required for your door project. This can include replacing rotten timber around your garage door opening or changing two single doors to one large double. Because he is a licenced builder you can rest assure that work will be done at a highquality standard and to the New Zealand building code.
Alpha Doors is a local company, run by a local team who is passionate and professional about providing a great service for our community. Call Luke and the team today for a no obligation free quote on 027 277 9141 or 0800 257 423 www.alphadoors.co.nz
QUALITY, S NEW ZEAL AND MAD E C U E R I T Prompt an Y A N D d quality s C ONVENIEN ervice in in stalling, fix CE. ing and se r vicing gara
ge doors.
GARAGE DOOR OPENER
$550inc
Supplied and installed to your existing door. Subject to inspection
0800 ALPHA DOORS (0800-257-423)
admin@alphadoors.co.nz | cellphone 027 277 9141 | www.alphadoors.co.nz
GARAG E SPECIA DOOR LISTS Taranaki | Wang
anu Residen tial | Com i | Manawatu mercial | Industr ial
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Options to suit any sized HOME OR BUDGET
H
OOKER PACIFIC Moving and Storage have been trusted with Kiwi’s prized possessions since 1869. There aren’t many things we haven’t moved over the last 148 years! We completely appreciate moving home can be stressful – our trained team take great pride in taking the stress out of moving your personal effects whether your moving over seas or around the corner. We have many options available to suit your individual moving requirements – whether you want to move yourself or sit back while we look after the entire move, we can accommodate your request.
• From the sale of packaging materials for you to
compete a DIY move. Make the most of our buying power - you could be surprised at our prices compared to purchasing from a retail outlet (or trying to pack all your belongings into banana boxes…) • Storage options – short term or long term. If your handover dates don’t quite match up, or you’re not too keen on moving your belongings twice in one month, ask our team about our storage options. • Packing services – the most common area people find frustrating is packing your life’s belongings into boxes for the move. Why not get our team to take the headache away while you have a coffee with a friend, or tick some other
tasks off the new property to do list. Our trained team have huge experience in carefully packing goods of all shapes and sizes. • Transport between properties – we have many options available for moving your goods between properties; whether you need a truck and driver charged per hour through to a complete price to ship your goods to Scotland we can customise a solution which best fits your needs and budget. • Insurance Options – we can arrange cover for your goods while they are in transit between properties. • Unpacking services in your new property. Now all those lovely boxes are in your new home your
remember the joy you had in packing them all… – you could leave the unpacking to our team, we can even make up your bed! Want to know more? Simply call our local team and discuss the options that best work for you.
DONT LET YOUR NEXT MOVE TURN INTO A MONSTER
TRUSTED WITH KIWI’S PRIZED POSSESSIONS SINCE 1869 0800 REMOVALS (736 6825) | WWW.HOOKERPACIFIC.KIWI
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Loaders Landscape Property SUPPLIES O
L
OADERS LANDSCAPE Supplies have a fantastic range of garden supplies including shellrock, barks, mulch’s, sand, topsoil and other products for all of your landscaping needs. Loaders Landscapes staff have vast experience and knowledge and are only too happy to offer advice for your gardening requirements. We also have a range of other services available to make the job easier for your big project as well. Whatever you need for your landscaping project we have it. Loaders topsoil is blended from soil gathered from all around the district, it is
blended and screened to produce a loam that is suited to heavy or light soils. Need a trailer we have 6 free loan trailers available 7 days a week. Phone ahead to avoid missing out. Alternatively we have a great and prompt delivery service within Wanganui 6 days a week. Ask us today about our free bag delivery.
Check out our range of bark from quality garden bark to budget pine mulch.
INVESTING
WNING INVESTMENT property requires much more work than other investments such as bank deposits and shares. Certainly you can simply arrange a home loan, buy a rental property, find tenants and collect the rent, but it’s not the smartest way to realise the best return on your investment. Before you slap your money down, talk to a lender, an accountant, a property manager and a lawyer, and get the basics in place.
STRUCTURE Before you buy, decide on an ownership structure for your investment. You can own your property personally, jointly, in a partnership, as a trust, as a limited company or a look through company, and
We stock a large range of stone for drainage and decorative uses.
GP cement is ideal for use in structural concrete, mortars and renders. We stock Dalton fertiliser and garden mix and compost. Ready to use, 15min rapid set and mortar mix available in store. QPR cold asphalt, is an advanced pothole repair mix that is easy to use and gives great results. Give your vegie garden a boost with Mushroom Mulch. We stock a great range of weed mat also plastic and steel weed mat pins.
unless you’re familiar with these options, you will need professional advice on what will suit. The structure you choose will depend on your circumstances, abilities, and how you intend to grow your property investment portfolio.
BORROWING You may need to borrow money for your rental property, which could prove more difficult than borrowing money for your own home. Some lenders may have lower lending limits for investment properties, and they will look carefully at your proposed investment and what you can afford to repay. Talk with lenders and mortgage brokers who have expertise in the field.
Produced for Loaders shellrock is available in three sizes and can be used as base course for roads, driveways, paving, paths etc.
We stock builders mix for concrete, river sand for paving and plastering, white beach sand for plastering and sandpits.
Loan trailer use for these products • OPEN 7 DAYS
Hatrick Street Phone 3488114 www.loaders.co.nz
We stock Macrocarpa sleepers great for your landscape project.
Truthhs GEARING As you research the pros and cons of property investment you will come across the term ‘gearing’. The idea of ‘negative gearing’ became popular a few years ago, when an investor would borrow to invest in an income-producing asset and the cost of borrowing would exceed the return from that asset. A positively geared property means that the income you receive from your rental property (rent) is greater than all of the costs of owning it (interest, rates,
insurance etc) combined. An accountant will be able to advise on each.
TAX An accountant will also be able to provide information about tax. A rental or investment property is a business, and as such, the income it brings is taxable. You will have to complete a tax return every year and keep yourself up to date on changes to the tax laws. The inland revenue website is a good place to start.
17
Great People, DOING GREAT THINGS
A
T CREATIVE Aluminium we deliver industry-leading windows and doors to the residential and light commercial sectors. From new builds, renovations and retro-fit solutions through to complex commercial projects, our experienced team understand the complexities of the building process and work with you to deliver the right solution for your needs, on time, every time. We have three functional work areas: • Our office, where our skilled estimators, sales and project managers work supported by the administrators to get quotes out on time, and then manage your project
so that what was promised is delivered. • The factory - where the products are manufactured to specifications. • Install team - it is our install teams job to put the product into the hole. If we can further assist you in choosing the right solutions for your next renovation or new build project, give us a call. We’re here to help.
GREAT MINDS THINK ALIKE From simple renovations and architectural designs through to commercial builds, we create window and #.., +.7)*!./+ +-"%!4% *. 6.), /""#+3 We’ve been delivering great window and door solutions for many years. And now, we’re excited to be embarking on the next stage of our journey as we join the Fairview Windows & Doors family. This means even better quality, better service, and better window and door solutions for you. We’re excited to show you what’s new. Stop by $11 &2)-. ')26 or give us a call on 0800 000 677. Our team is here to help.
%,"2*!("27)0!/!)03%.3/5
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Buying a RENTAL PROPERTY
B
UYING A HOUSE is usually an emotional decision. Often, just seconds after the agent has opened the door, you’ve fallen in love with the polished floors, the stainless steel kitchen, the tiled shower or whatever your particular preferences are. But when you’re buying a rental property as an investment, you have to think with your head, not your heart, and keep firmly in mind that this house is not for you. You’re looking for a property that will appeal to your ideal tenants and help you to meet your financial goals, not somewhere with old sash windows that you just adore. Put love on the back burner, and access the analytical, realistic and
business-like areas of your brain. Before you start looking, do some research. Decide which locations interest you, and don’t limit the possibilities to places you’d like to live yourself. Look for locations that suit your investment strategy, whether it be capital gain or regular income, or a combination of the two over the long term. Sought-after city suburbs will have some higher priced housing offering good potential for capital gain but the market rent might not cover your expenses, whereas in a less appealing student area the rent to house price ratio might be much higher. Once you’ve sorted out your preferred areas, research them thoroughly.
Look at the history of the area, and the trends and price fluctuations that have affected it over time. Is the housing in the area improving, or deteriorating? Make sure the areas you’ve chosen will attract the type of tenants you want. It can help to make a list of the likely needs of your ideal tenants and what they’ll be looking for. Again, remain
analytical. They’re less likely to care whether the range is stainless steel or white, but they might be very focused on the proximity of public transport, schools, parks, sports facilities, restaurants and malls. Narrow down your areas and discuss your choices with someone who has property management experience for insider advice.
Hard Yakka Karl Grant Specialising in small landscaping jobs I can build you a garden, do your hedges and tree trimming, water blasting, paving stones and anything else that gets you outside enjoying your property.
Call Karl on 021820050 and let me do the Hard Yakka For all your backyard maintenance, contact Karl 02 021 1 82 820 0 05 050 0 or 34 343 3 79 7996 96
• Continuous spouting, fascia system. • Made to measure on-site. • A range of profiles and 40 colours in colorcote steel, aluminium or copper. • NZ's only compliant bracket. • Written 10 years ‘no leaks’ guarantee.
Phone: 06 344 8304 or 0800 50 50 52 Email: graham@rainaway.co.nz www.rainaway.co.nz
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Keeping CONTROL
W
HEN IT COMES to investing everyone has their risk tolerance levels, and one of the great attractions of owning a rental property is control over most parts of the investment. Although we’re often reluctant to admit it, most of us have a measure of the ‘control freak’ in us, and that can be a driver in the types of investments we look for. Rental property is a good choice for a ‘control freak’. You as the investor can decide if the purchase price, rental and potential for capital growth are attractive, whether they represent good value to you, and how you will finance the property. You also have control over how to structure any
borrowings, if, when and how you will add value to the property, and what you need to do to realise the rental return you want. You also decide your level of input into the investment – whether you will take care of maintainance and repairs yourself, or whether you’ll relinquish just a little of that control and pay a property manager to look after it for you. When you acknowledge that you are in charge of your investment property to a greater or lesser degree, you accept responsibility for its success or failure, and that is a catalyst for seeking reliable information about what is happening in your area of investment, and how to take advantage of changing circumstances, or minimise
Rivercity Gas is locally owned and operated by Graham Hardie and Linda Marks
the impact of unfavourable conditions. This doesn’t mean you have to do everything yourself, but it does mean you have to take an interest in what’s going on, and seek out timely, appropriate
Graham has vast experience in the industry and is a current Board Member of the NZ Plumbers, Gasfitters and Drainlayers Board, appointed by the Minister for Building and Construction in 2010. We sell, install and service top quality brands such as Bosch, Rinnai, Escea, Real Fires, Masport,
advice, whether from a property manager, lawyer or accountant. Take your investment in property seriously, and keep in mind that residential property investment is not a passive way to make money.
Ziegler & Brown, Regency, Brivis and The Fireplace. At Rivercity Gas, we’re committed to your safety and peace-of-mind first and foremost. That’s why we insist on adhering to all government legislation and the guidelines of the Plumbers, Gasfitters and Drainlayers Board, making sure all our work is undertaken by our properly qualified staff. Rivercity Gas are the experts in gas whether it’s domestic, commercial, or industrial. Our team is united by a common goal: to serve our customers to the best of our ability and give you the fast, efficient service you’ve come t. to expect.
From Graham and the boys on the tools through to Linda and Toni in the office, we love to see a job well done and a customer more than happy with the result. Feel free to pop in any time to meet the team and see the wide range of gas appliances in our showroom.
Check out our range of products www.rivercitygas.co.nz or visit our showroom at 176 Glasgow St, Wanganui. Phone 06 347 1997
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Small jobs, BIG JOBS
I
F YOU’VE LIVED in your own home for a long time, chances are you have everything as you want it, and make an effort to keep it that way. Probably your drawers have handles on them, the windows open easily, and there’s a functioning clothesline. Tenants also appreciate houses that work, and making sure your rental property is up to the mark before you hand over to a property manager can save you stress and money. Your tenants will stay longer if they’re comfortable, and you’ll have less work to do further down the track. Dealing with a small job may save you doing a big job later on., and this applies particularly when it comes to water. If, for example, there’s no shower curtain, supply one that fits the gap. Otherwise,
you may find yourself dealing with rotten chipboard flooring outside the shower, and that’s a far bigger task. Have a good look around the spoutings and downpipes, and make sure everything is connected as it should be. Ensure washing machine outlets are not leaking and rotting the floor. Check that your investment property has a clothesline, and that it works. If it’s a rotary, make sure it turns around. If it’s a pull-out, make sure it pulls out. Replace sagging wires, and get rid of any rust that might stain clothes. Also check that access to the clothesline is adequate – nobody wants to slosh across a muddy lawn with a loaded washing basket. Look at the drapes. If they’re grimy, torn, harbouring insect life and missing hooks, they’ll give your property a
Concrete grinding and sealing Decorative tile effect overlays Floor preparation and repairs Re-colour stamped concrete Concrete Resurfacing Epoxy paint coating Anti-slip treatments Coating removal Waterproofing
Geoff 027 516 1113 A/H 06 323 3774 www.manawatuconcretecoatings.co.nz
sad, unkempt look. Wash, mend and rehang them, or replace them altogether with fresh, clean ones. They don’t have to be brand new but they do have to look clean and well-cared for. The same applies to carpet – a good shampoo before your tenants move in will make the house look, and possibly smell, better. The rule of thumb: repair anything that would drive you mad if you lived there, and that will become harder to fix without attention.
Keith Hughes Electrical
Solar Solutions
From 1 to 500+ Panel systems “Save money today!”
We’ve got the ability to provide farmers with remote pumping using solar pumping systems
06 348 9005 0274 937 863 Keith@caelectrical.co.nz
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Property management RESEARCH HEIGHTENS AWARENESS OF SAFETY
I
F IT’S LIKELY your rental property is going to be tenanted by a family with children, talk to your property manager about what safety measures you can put in place. Research which claims many private rental houses are not safe places to bring up children is heightening awareness of safety issues in tenanted properties. It found 28 per cent of privately-owned rental properties did not have working smoke alarms, and New Zealand property investors are backing calls for smoke alarms to be made compulsory in rental properties. The Fire Service is asking for photoelectric
smoke alarms in every bedroom, one in the hallway between living areas and bedrooms and one on each level of every rented house. With fire alarms available for less than $10 each, making sure a house is covered is not a large outlay. However many tenants remove batteries and/ or fire alarms for a variety of reasons, and the NZPIF believes landlords should not be held responsible for making sure the alarms are kept in working order. The high number of children killed or injured in driveway accidents is making driveway safety another issue of which
NEED TO KNOW
residential landlords are being made aware. For those who are keen to fence driveways on their properties, Housing New Zealand has a guide available. It also provides driveway safety advice to tenants when they move into a state rental home and regularly includes driveway safety information in its tenant newsletters.
Landlords new to the investment property business need to be broadly aware of health and safety-related requirements in the following laws: • Building Act 2004 and the Building Code • Health Act 1956, and • Housing Improvement Regulations and bylaws made under the Local Government Act 2002. These are set by individual councils.
MORE INFO You can download this information at hnzc.co.nz.
SELF STORAGE Self Storage units means secure storage with 24/7 access with a locked and lit compound with a high security fence. Sizes from: 5.1 m3 to 48.6 m3
Discounts for extended rentals and for pre-paid arrangements
06 347 7867 or 0274 975 445 www.therentcentre.co.nz Kaikokopu Rd, Aramoho, Wanganui
Always Buying & Selling | New & Used House Fittings
Doors, Windows, Vanities, Kitchens and much more NOW AT 54 Maria Place Extn, Wanganui Ph 06 348 8208 A/H 0274 535 460 • renowg@xtra.co.nz
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Spotting GOOD TENANTS
F
INDING THE RIGHT tenants for your rental can be time consuming, stressful and difficult, but some property owners do take on this step themselves. If you have decided to deal with vetting tenants before handing over to your property manager, there are several things you need to know. The Residential Tenancies Act says you must make sure the rental property is clean, and in a fit and habitable condition at the beginning of the tenancy. But in addition to this, it pays to make the place look its best so as to attract good quality tenants who will look after it as you would like. When you have a prospective tenant interested, and you think they
might be suitable, ask them to complete a pre-tenancy application form giving their name and contact details, where they are living now and their renting history, ID details and references you can contact to find out more about them. You can download the form from the Department of Building and Housing website (address below). This application form also gives you, the landlord, permission to do a credit check. It’s vital to do your homework on prospective tenants, particularly checking their references and credit rating. Don’t just email a referee – make a phone call, and speak to all the referees whose names you have been given. Many property owners find this step difficult and
For all your building needs no job too big, none too small
will hand over to a property manager at this point. If you’re uncomfortable with what you have been told, look elsewhere. But be aware that you may not make the decision on the basis of a person’s marital status, religion or race. For example, it’s illegal to deny a tenancy to a person because they belong to a certain church, or to change an existing lease after it has been signed
because you discover the tenant is unemployed. If this does happen, you could be taken to the Tenancy Tribunal or the Human Rights Commission for discrimination.
For more information, talk to a property manager, and read the information sheet on discrimination in the tenancy matters section at http://www.dbh.govt.nz/ attracting-tenants.
THE KIWISAVER
GURU
WAT’SON BUILDING MEANS QUALITY
Kiwisaver and First Home Specialist Call me anytime for a free no obligation chat THINK LAW THINK MOORE LAW 2 Pehi Street, Wanganui East Ph: 06 343 2439 mikewatsonbuilders@xtra.co.nz www.watsonbuilding.co.nz
37 Somme Parade, Wanganui Ph: 06 349 0012 Web: www.moorelaw.co.nz Email: info@moorelaw.co.nz
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Ending A TENANCY
I
T’S NOT UNUSUAL for newbie landlords to enter the rental game independently, and later decide it’s all too hard. But getting out can be just as complicated as getting in, because giving your tenants notice isn’t as simple as asking them to leave at the end of the month. • There are a few ways a lease can be terminated. You can give 90 days notice in writing to your tenant for a periodic tenancy. • If the tenants have caused certain problems, you can apply to the Tenancy Tribunal for a termination order. To get a termination order, you have to prove that the tenant is at least 21 days behind in paying rent, or has assaulted or threatened to assault
you or one of a number of other people, or has damaged or threatened to damage your property. • You can also apply to have the tenant evicted if they have breached the tenancy agreement or the Residential Tenancies Act. If your tenant won’t leave when legally required to, you can apply to the Tenancy Tribunal for a possession order. To get it enforced, you must take it to the District Court within 90 days. The tenant will then be evicted by a bailiff or with the help of police. You should never take these matters into your own hands. It is illegal for you to evict the tenant yourself, and until she or he leaves, you have to fulfil your obligations to each other.
AFFORDABLE
PLUMBING & GAS LTD
CRAFTSMAN PLUMBERS, GASFITTERS CERTIFIED PLUMBERS, GASFITTERS& &DRAINLAYERS DRAINLAYERS
Need A Certified Plumber? Call Gavin for all your plumbing or gasfitting needs. Installers of Gas & Electric Hotwater Systems & Gas Heating Systems
Phone (06) 345 1800
And it doesn’t end there. If your tenants leave gear behind you have to make a reasonable attempt to contact them to collect abandoned goods at the end of a tenancy. If they don’t turn up to claim their
goods, you have to store them for 35 days. After that you may sell them at a reasonable price. Any unclaimed personal papers left behind by tenants after 35 days must be handed over to the police.
McCARTHY’S
LOCKSMITHS 2010 Ltd
Phone/Fax 06 345 6098 Top Friendly Service For • Key Cutting • Code Keys • Lock Supplies & Installation • Car & Home Lockout Service
• Safes - Cash, Fire, Data Disc • Security Master Keying • Automotive Locks • Mobile Eftpos
Gavin Ure Mobile: 027 249 6310
Opp Trafalgar Square Quay Centre, Taupo Quay, Wanganui
40 Koromiko Road, Wanganui 4501 Email: affordplumb@vodafone.co.nz
Email: mccarthyslocks@xtra.co.nz