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Changes to the residential tenancy act

Proposed law changes will require action by landlords From 1 July, laws in the proposed Residential Tenancies Amendment Bill are due to come into force. The changes aim to reduce fire-related injuries and deaths and make homes warmer, drier and safer for the million New Zealanders who live in rental accommodation. Some of the proposed changes are: Smoke Alarms From 1 July landlords will need to have working smoke alarms installed in all their residential rental homes. Any replacement alarms installed after that date will need to have long life batteries and a photoelectric sensor. Hardwired smoke alarms are also permitted. Tenants will be responsible for replacing worn-out batteries in the smoke alarms and informing their landlords of any defects. Insulation All residential rental homes in New Zealand will be required to have insulation to keep a home warm in winter and cool in summer. Social housing (where tenants pay an income related rent) must be insulated by 1 July 2016 and all other rental homes by July 2019. Landlords will be required to provide a statement on the tenancy agreement about the location, type and condition of insulation in the rental home. Tenancy abandonment process The proposed law introduces an expedited process for a landlord to regain possession of their rental property when the property had been abandoned. The expedited process for regaining possession will enable a Tenancy Adjudicator to decide the case based on evidence landlords have provided in their expedited abandonment application. Landlords will not need to be present when the Adjudicator considers the evidence under this new process. The Tenancy Tribunal Application Online form will...

Creating passive income toward Retirement

  The current Super Annuation payment is nothing flash and does not give the majority of us the lifestyle choices that we would like and are used to. Many more retirees are now ‘choosing’ to work longer and take on extra jobs because of financial pressures. Those in their 60’s are getting used to the idea of working up till 70 to be able to get themselves into a stronger financial position. If your vision for your retirement is to sit at home wondering if you can afford to take out the car for a drive or go shopping then this article is not for you. If, however, you feel that you have worked all your life and would like to have the freedom to choose what you do, during what is sometimes called “the golden age”, then it is time to make a positive start in that direction Is property for everyone? No, of course not, some use the stock market, option trading, currency trading to name a few. There is lots of talk about negative gearing but that is not advisable if you are looking to create extra income. Any costs such as interest, rates, insurance and repairs will be offset  by the rental income but at this stage of life you really need to know that the property will generate additional income. Property can take a bit longer to gain in value, depending on when you enter the property cycle. There are times when property appreciates faster than others and there are times when values sit or even decline. However, if you look at historical charts...

How do I find a suitable property?

The one basic ‘non-negotiable’ skill you must develop to successfully find great property is to know a good deal when you do find it. Most people, don’t understand the power of research and the need for some effort and efficient action to succeed in investing. Second to negotiating skills is getting to know an area well. By taking the steps below, you can become an “expert” in any geographical area. This will allow you to make instant purchasing decisions and pick up every real bargain that present themselves. Format for initial research on an area. 1. Pick a small geographical area. Preferably no more than a dozen or so streets 2. Visit at least 2 property managers who work in that area. Explain to them that you are an investor, keen to invest in that area and you are looking for a good property manager who can help you buy good properties and then manage them for you. Ask them the following questions. • Are there any ‘not so good’ streets or negative influences in the area you are researching? • What are the streets people want to live in? • What types of properties with what features are the easiest to keep tenanted? • What are typical rents in your area for 1, 2, 3, 4, and 5 bedroom properties. Once you’ve completed this you will have a list of good streets, what types of properties rent well and average yields! This applies to either keeping the properties as rentals or onselling them to other investors 3. Finding great agents. • Visit every open home in your chosen...

24 Ways to find motivated sellers

  Here are 24 ways of many more. 1. Place a newspaper ad (major daily) 2. Place an advert on Trade me. 3. Bandit signs 4. Drive neighborhoods looking for vacant houses 5. Call private sale adverts 6. Talk to local real estate agents about expired listings 7. Contact landlords who are evicting a tenant 8. Contact landlords with properties for rent 9. Title search for properties owned in company names- usually investments 10. Mortgagee sales 11. Deceased estate sales 12. Council records for properties with outstanding building code requirements 13. Council records for properties with outstanding health code requirements 14. Condemned properties 15. Fire damaged properties 16. Out of area owners 17. Network with professionals, i.e. Solicitors and real estate Agents 18. Network with service people, i.e. letter carrier, pool service person, lawn service person, newspaper delivery person, carpet cleaning people, plumbers, etc. 19. Property finders 20. Magnetic car sign 21. Distribute business cards EVERYWHERE 22. Career attire (Polo shirt with embroidered “I Buy Houses” logo) 23. Fliers 24. Shopping centre & Supermarket notice boards 24 Ways to find motivated...

6 things I wish I had known when I started investing in real estate

If you’d known then what you know now, what would you do differently? Here is a 6 part answer to this question which cuts to the core of the essential lessons of a lifetime of investing. 1. It’s never about the property! We get told that the most critical thing is about the condition and location of the property. However, if the seller is not motivated then no matter what the condition or location of the property, you’re still not going to get a great deal. Finding a motivated seller becomes the priority in your search for a suitable property which will give you the return you are looking for. Some Don’ts • Don’t let non motivated sellers waste your time telling you about their property for which they are expecting an unrealistic price. • Don’t waste time on due diligence and property inspections, until you find a motivated seller. • Don’t be scared to ask the questions, if you don’t ask then you don’t get. I was always told “you already have “no” as an answer, you can try and get “Yes”. • Don’t be scared to make an offer below perceived market value. The vendor can always decline to accept the offer. • Don’t think the negotiations are all about price, sometimes the timing or other factors are more important. • Don’t feel guilty about buying a mortgagee sale property. If you don’t buy it then someone else will. You didn’t have anything to do with the fact that the property is being sold as a mortgagee sale. • Don’t be scared to ask for access prior...

5 Ways to add value to your property

Adding value to your property means that you will be able to apply to the bank to top up your mortgage which in turn creates a deposit to purchase another property. If you are not ready to purchase then the extra funds can sit in a revolving credit facility so that there is no cost while having the money available Any top up would still be considered part of your first mortgage and it would be at the same floating rate that is currently available. Renovations don’t need to cost a lot of money and usually the value added to the property is in excess of the cost. A prudent investor would make sure that the property in question would value around market value for the area so that the property won’t be over capatilized. This applies to any property that you live in yourself as well. If a property is worth (before renovating) $350,000 and $25,000 is spent on it, then you would expect the property to value up to at least around the $400,000 mark. However, if the top sale in the area for similar homes is $370,000 then you would have wasted money that you cannot recoup until the market value moves up. Banks generally lend up to 90% of the market value although at present 80% is the norm. Here are a few suggestions to add instant equity. Bathroom Are your bathroom tiles looking a little tired or do you simply want to change the colour of your décor? Consider transforming your tiles, bath and vanity. For the fraction of the price of a bathroom...