What is a Tenancy Bond? When you move into a rental property, most landlords will ask for an amount equivalent to a few weeks of rent (usuall...
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I’m thinking of investing in property, where should I start?

Property remains New Zealand’s most popular form of investment. Property investment is generally easy to understand, and has traditionally offered solid investment returns. Before you invest, you should have a clear long-term real estate strategy. For example, you'll need to decide whether you're looking for high rental returns in the short term, or if you’re more interested in longer term capital growth.

Your First National Real Estate agent can help you to work out your best investment strategy and find you the properties to invest in.  If this is your first time investing in property, you should also seek professional investment and taxation advice. 

We already own a property. Should we sell it before moving to a new home?

Finding a buyer for your current family home before purchasing a new one is usually recommended, for a number of reasons:
  • If you buy a new property first, you may find yourself in the position of having to make mortgage repayments on two houses at the same time (if your house does not sell in a timely fashion, or for the price you expect).  This might put you under unnecessary financial strain.
  • With your current property sold, you’ll know exactly how much money you’ll have available for your next property.  Being a cash buyer may give you better leverage on the pricing and terms of your new property.
Some financial advisors recommend that you never sell a property, but keep the first property as a rental, and use the income to help finance your next home.  This is only realistic to achieve if you have the sufficient financial means to do so.  Speak to a financial advisor or First National Real Estate agent for advice.

What should we consider when deciding whether or not to buy a larger home?

While moving to a bigger house can be an attractive prospect, it is also a significant commitment. When making your decision, consider the following:
  • If your current home is not big enough for the size of your family, then moving to a larger home will probably be more urgent.  This could result in you paying a higher price for your new home.  If your need is less urgent, you'll have more time to evaluate housing options, and to find a great deal.
  • While a larger home will have a number of attractions for you, it will also likely be more expensive to maintain on an ongoing basis.
  • Speak with a financial advisor to assess your current situation and see if you are able to comfortably service a bigger home loan. Consider what might happen in the event of a personal financial shock or increased interest rates.
  • Review any other debt you have (e.g. credit card, car loan, hire purchases etc.) as these debts or facilities can negatively affect your ability to borrow. Make sure debts are either paid up-to-date, or paid off entirely before investigating or applying for a new mortgage. Lenders often ask to see the last 3 or 6 months of any debt related financial statements.
  • Tools such as a home loan calculator can help you assess your options and budget for a new home. Most New Zealand bank websites make this functionality available for you to use.
If you’ve decided that moving to a larger property is right for you, talk to a First National Real Estate agent about selling your current property and finding your dream home. First National Real Estate has over 400 offices across Australia and New Zealand, with property coverage in all major towns and cities.

What are the benefits of investing in property?

The main benefits of investing in residential or commercial property include:
  • Capital gains – An increase in the value of your property over time thanks to a rising property market, or improvements you’ve made to the property.
  • Rental yield – The annual rental income you receive, less maintenance and mortgage servicing costs.
  • Tax advantage – In some cases, savvy investors can gain tax advantages through negative gearing, whereby they can deduct the costs associated with owning an investment property from their overall tax bill.  Please consult a taxation specialist for advice on your own situation.

Once I’ve found a property I want to rent, how do I apply?

Application processes will differ between real estate agents and landlords, but the process typically requires that you fill out a Pre-Tenancy Application form.  This form asks you for a variety of personal information that will help a landlord assess your suitability for renting their property. The information you provide on the form may be used to undertake a Credit Check, so ensure you answer the questions honestly.
Typically, the following information is requested on the form:
  • Proof of your previous addresses, with your rental property history included
  • Proof of your current and previous employment history (and income)
  • The names and number of people intending to rent the property with you
  • The name of the person who will be the contracting party (or lead tenant)
  • The date you wish to move into the rental property
  • Proof of identity (Photo identification, such as a drivers licence or passport)
Your completed form should be given to the letting agent or landlord for processing.

I want to rent a bach for the school holidays. Should I rent through a real estate agent?

Some holiday home owners rent their holiday homes out themselves.  Others rent their holiday homes out via agents.  As a renter, your interests and personal details are better protected when you rent your holiday home through a licensed real estate agent.  You also benefit from more choice of homes, because the real estate agents have exclusive listings that are not available through any other channel.

Whether you rent a bach or holiday home directly from the property owner or through a licensed agent, it's advisable to search for online reviews of the property. Make sure that the photos shown are legitimate and represent the current property conditions. If you are able to, you should physically inspect the property and ask as many questions as possible before signing any holiday home Rental Agreement.

All details concerning the holiday home rental should be put in writing.

How should I go about deciding where to live?

Moving to a smaller house after years of family living is a big step. It’s important to do your research. Make a list of all the things you want in your new home and see how this balances with your financial situation. Some things to consider are:
  • Location of family and friends – Do you want to stay close to your family or friends, or are you happy to move to a more remote location?
  • Interests and hobbies – Can your interests and hobbies still be achieved at your new location?  Are there particular amenities you want to be close to?
  • Transport – Will you be relying on public transport, or will you get around by private vehicle?  Public transport is not available in all rural areas.
  • Shops – Will your new location have the shops and supermarkets you want?
  • Services – What other services do you think you’ll need in your new location?  Make sure your new property is close to libraries, medical facilities, sports clubs, RSAs or other facilities you need.
Use the internet to search for suitable home locations. Once you know the sort of lifestyle you want, narrow down the available options to achieve it:
  • City living - Townhouses or apartments closer to the Central Business District (CBD) will be smaller, but you’ll also be able to enjoy the energy of the inner city. Moving from the suburbs to the city can provide you with access to museums, restaurants, shopping centres and theatres, right outside your door.
  • Rural living - With your children now living away from home, you may decide to take the opportunity to move out of the city completely. A small home in the countryside can offer a slower pace of life.  New Zealand’s compact size means you don’t have to venture far from major urban centres to get the benefits of rural living.
  • Gated-community - While generally popular overseas in high-crime areas, gated communities are becoming more common in New Zealand.  This is largely due to the private facilities they offer to residents. With amenities like swimming pools, fitness centres, sports clubs, golf courses, marina and beach access, and water sports, living in your new home can feel like a holiday.
Talk to First National Real Estate for help with selling your existing home, and buying your new downsized accommodation. 

What should I look for when buying a holiday home for investment?

Location is the most important consideration for holiday home investments. The property must be in the right area to attract regular rental opportunities, and to provide the potential for strong capital growth. Things to consider include: 
  • Surrounding infrastructure and amenities in your chosen location.
  • Future plans of local municipalities and / or developers for the area.
  • Tourist appeal, from kiwis and from overseas visitors. Will the property attract interest all year round, or only during peak seasons?
  • Accessibility of your property to major towns and / or airports.
  • How attractive is the property itself, and the street it’s sitting on?
  • Does the property enjoy good natural light, a quiet environment, and a good amount of accommodation space?
  • Will the property appeal to a broad range of tenants such as couples, singles and families?  Is the property near to restaurants and tourist attractions?
  • How is the property likely to hold its value? In a financial downturn, free-standing property tends to drop less in price than units or apartments. 
It's often wise to buy in an area that you personally enjoy taking holidays in.  That way, if rental income is difficult to get for any reason, of there is a downturn, you still have holiday accommodation that you can use personally and enjoy.

How much will it cost me to live in a retirement village or a retirement home?

There are many different grades of retirement villages and retirement homes.  The higher the quality of the retirement home, the more you'll generally need to pay. 

Retirement homes can be purchased outright (but note that the land the home is on is often leasehold), or in some cases can be rented.  Before you commit to any financial obligation, seek the advice of a solicitor, lawyer or financial advisor and make sure you completely understand the costs of entry, residency and exit.
  • There is usually a fee charged to move into the property, along with recurring service charges each week you live there.  Some retirement villages also request a departure fee when you leave the village
  • Where they exist, departure fee structures can vary a lot.  Make sure that the fee structure you are considering is properly explained
  • When evaluating a retirement village or retirement home, ask the sales representative for a comprehensive rundown of their fees and charges.  Have this information reviewed professionally and by a family member

I want to buy a Lifestyle Block or rural property. What are the things I need to start thinking about?

  • Make sure you have realistic expectations when considering the move to a rural area. Consider the surrounding rural infrastructure like communications, roads, agricultural supplies, and general support services and how these available services will support your day-to-day living
  • Be realistic about your own abilities. Will you be able to manage the land you’re purchasing or will you require help?
  • Maintain good lines of communication with your real estate agent. You might be searching for your lifestyle block in an unfamiliar area. First National real estate agents have good knowledge of local rural areas and will help you to find the right lifestyle property match for your needs.
  • There are legal obligations and Council by-laws for you to consider when running a small food growing or farm business.  These obligations cover animal care (identification, tracking / tagging systems), weed and pest controls, and effluent disposal methods.  There are also Council planning restrictions and building codes to consider.  Ensure that you seek legal advice if you are unsure of any of your obligations.
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