What are the benefits of investing in property? The main benefits of investing in residential or commercial property include:
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How do I prepare my home for bushfire season?

Do all retirement villages and retirement homes charge entry fees?

Most retirement villages and retirement homes charge an entry fee.  This fee usually goes towards ongoing updates to the common property and individual homes / units.

If you have limited funds, some villages may offer an apartment and negotiate a small donation of several thousand dollars.  Speak to the sales representative at your chosen retirement village or retirement home for more information.

Should I lease out my holiday home on a short-term or long-term lease?

Some of the usual rules governing tenancies don't apply for short fixed-term tenancies of less than 90 days duration.  You don't need to worry about the rules concerning fair market rent, tenant eviction notice periods, or rent increases following substantial improvements to the property.

Rental returns for short term tenancies will normally be higher than for long term leases, especially if the property is fully furnished. But as holiday seasons represent only part of the calendar year, this higher short-term rental yield must be balanced against the security of income that a long term lease situation provides.

You should consider the tax treatment of your holiday home by the Inland Revenue Department (IRD). While all rental income is taxable and needs to be declared on your tax return, your ability to deduct expenses related to the holiday home (such as interest, insurance, depreciation and Council rates) may depend on how often and for how long, the property is rented out.

In general, you will be allowed a deduction if you can demonstrate that these expenses are related to the earning of rental income. The amount of time that the property is rented out may impact on this assessment. If you only rent the house out for 10 weeks per year, you may only be able to claim the deduction at a rate of 10/52 - i.e. pro-rata, based on the weeks that rental income was generated. 

If the IRD believes that your expenses are private in nature, and are not a legitimate expense that led to the generation of rental income, they will likely be denied. Visit the IRD website for more information, or contact a First National Real Estate agent.

Can I stop paying rent if the landlord refuses to do maintenance?

No. If you withhold rent you would be in breach of your Tenancy Agreement. Your rental payments are not tied in the Tenancy Agreement to any rental maintenance issues. Good landlords will endeavour to fix issues raised quickly.

Where should I start looking for my investment property?

First National Real Estate agents are experts in their local areas, and they have a wealth of knowledge about investment properties. As a company, we would be happy to share this exhaustive knowledge with you. Start building your investment property portfolio with help from First National today.

How can I pay off my investment property sooner?

Here are some tips to help you boost your investment property equity quickly:
  • Get a Tax Depreciation Schedule done annually for your property. This will tell you exactly what you are allowed to claim as depreciation, which will help you maximise your New Zealand tax benefits.
  • Talk to a First National Real Estate property manager for advice on improvements you could make to your property that would increase the rent.
  • To pay off your mortgage faster, consider making your payments fortnightly rather than monthly. Talk to a financial advisor for further advice.

What should I do if my request for maintenance continues to be ignored?

The landlord has an obligation to keep the rental property in a reasonable state of repair and to comply with all New Zealand building, health and safety requirements. If you feel that your landlord is not meeting these obligations, you may raise a grievance with the Tenancy Tribunal.  This step would normally be taken only after you have tried to resolve the issues with your landlord (and been unsuccessful). 

I read something online about Stamp Duty. What is this and will it affect me when buying into a retirement village or retirement home?

Stamp Duty is a tax or fee levied on official documents that some countries and states charge, particularly when transferring property ownership. New Zealand does not levy Stamp Duty, so you will not be affected when buying a retirement home.

What type of insurance do I need for a Lifestyle Block?

Lifestyle blocks are very common in New Zealand, and most major insurance companies offer lifestyle block insurance policies tailored to your needs. These policies typically cover home and contents, accidents (including liability), farm buildings, farm equipment, vehicles, livestock and other animals.

Depending on the level of income you receive from your lifestyle block, you may want to consider additional insurance. Insurance policies will typically cover loss of income from adverse events (droughts, severe frost, animal sickness or even rustling). Your insurance broker can advise on the right insurance policy types and the appropriate level of insurance cover you need (if any is required).

What is a Body Corporate? How does it work?

Whenever land is sub-divided and registered as a unit title development (i.e. apartments or units) then a legal entity known as a Body Corporate is created. The Body Corporate members are all of the individual owners of a unit or flat within the development or apartment block. Most Body Corporates establish a committee, who perform administration and tasks and represent the interests of all of the owners.
  • The Body Corporate is responsible for the management and maintenance of the units or flats, ensuring they are kept to a good and tidy standard
     
  • The Body Corporate will have (or produce) a set of rules that every owner will need to follow. These rules cover things like the use of shared access ways and how repairs or maintenance costs will be attributed to each owner.
     
  • The Body Corporate will typically charge an annual levy to cover basic ongoing expenses (e.g. rubbish collection, utilities for common areas, insurance etc.).  They may also levy one-off payments for extraordinary expenses (major repairs or renovations, or changes to rent if the premises are leasehold). 

How do I find a good tenant? Can I do this myself?

Selecting a suitable tenant for your commercial property is very important.  The best tenants will look after your investment and reliably pay rent throughout the terms of the commercial real estate lease. Long term tenants are preferable if you wish to receive regular uninterrupted rental income to service your commercial loan.

You should undertake a credit check on any prospective tenants. In New Zealand, you may only do this with the prospective tenant’s permission. Credit checks can be performed by several credit agencies directly online, or you can arrange these checks via your local real estate agent or property manager. Fees typically apply.

It's advisable to ask prospective tenants for references and to contact each reference given (or have your property manager do this), to check that the tenant is reliable and likely to keep up to date with rent payments.

First National agents maintain lists of prospective tenants waiting for particular types of commercial properties so we can help to speed up the leasing process for you.
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