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Owning an investment property not only offers the opportunity to build wealth but extends itself to the opportunity to save tax also.  These tax savings can go a long way towards assisting with your investment property cash flow requirements.

Owning investment property can have many benefits.  The tax savings derived through property investment can assist in paying off your investment property sooner.

Some deductions available to property investors:

• Advertising for tenants
• Bank charges
• Borrowing expenses
• Depreciation of chattels
• Insurance
• Body Corporate Fees
• Pest Control
• Related travel
• Water charges
• Rates
• Gardening and lawn mowing
• Interest expenses
• Legal expenses
• Agents fees and commissions
• Repairs and Maintenance
• Stationery
• Telephone expenses
• A few other items

Keeping accurate records from the outset is a golden rule to maximise your tax savings.  Always keep receipts and source documents and don’t let paperwork ‘pile up’, file it promptly and efficiently.

If you need any further information please contact Paul Lochore on 09 481 0639 who will give you sound and accurate advice.

Whether you are buying or selling, selecting the right agent with whom to do business can determine how smoothly your transaction proceeds.

These days agents are required to operate under very strenuous legislation and stepping outside of that legislation can see the agent imposed with extensive fines and/or loss of licence.

When Buying

Establish an open, honest relationship with your agent.  Let your agent know exactly what it is that you are looking for in your new home.  Discuss suitable settlement dates, finance arrangements and any other details that could affect your purchase.  With such knowledge your agent can help you avoid mistakes.

Keep in regular contact with agents, they are a wealth of information in terms of market conditions, new listings and changes in legislation.

When Selling

Select an agent with whom you can openly communicate.  Look for an agent who is prompt, behaves in a professional manner, offers attractive marketing plans and has a reputation for getting the job done.

Don’t select your agent just because they quote the lowest selling fee.  A selling fee is only paid once the property is sold, don’t fall for the trap of thinking you are saving money on the fee by selecting an agent who doesn’t promote your home to the market.  Proper promotion means increased competition which generally results in the best selling price.

The best agent won’t necessarily quote the highest price for your property.  Look at the comparables, the marketing plan and the services offered.

Communication is the key, be sure to let your agent know exactly what you expect in terms of regular communication.

A lack of new housing stock,  a dearth of new listings, returning expats and a shortage of rental properties are driving up house prices and rents.

People are reducing debt, but aren’t yet willing to take advantage of low interest rates to upgrade their properties or invest in a rental property.  The problems are being compounded by returning expats.  At Lochore’s Real Estate we are seeing up to 20 people a month moving back to the Shore, many reclaiming their old rental properties, putting added pressure on an already tight rental market.  Many would like to buy new homes, but there just aren’t enough listings to satisfy demand, with some people missing out on sales, three, four or even five times. 

Yes, it is a seller’s market, but it is also a transitional market.  As house prices rise, there will be more interest in building new homes and selling houses, but that’s still a year or so away.

Today my advice would be  – if you are a first time buyer or an investor it’s a good time to buy because prices are still down on historical highs, but are on the increase.  If you are a seller, I know things have been tough, but there are lots of willing buyers out there and not many properties for sale, so you won’t get lost in the listings.

Extensive marketing can be the key to securing a sale on your property for the best available price in today’s market.

In order to obtain top dollar in our current market a seller must consider all their marketing options.  Their marketing plan should be substantial without the need to go overboard on costs.

An aggressive campaign can tip the scales in the vendor’s favour by creating a sense of urgency and competition in the market place.

Tips on obtaining the best price for your home include:-

• Select an agent with whom you can work.  Someone knowledgeable with experience and a reputation for getting the job done.
• Tailor an extensive marketing campaign with your agent.  Remember, the more people who see your property the greater the competition you create.
• Be realistic with your price expectation. 
• Complete any unfinished DIY projects before placing your home on the market.

We all know that property can make a great investment.  The case to retire on property is easier said than done.  To do so one must be disciplined, exercise caution and develop and follow a well-considered strategy.

Property has proven to perform over the long-term, in fact it has proven to be the vehicle that has created many millionaires.  The secret is establishing a plan for retirement and being able to stick with the plan.

There are two distinct phases to building a property portfolio that can sustain your retirement.

The Acquisition Phase

The key to building a substantial portfolio is using borrowed funds.  One must get used to handling large sums of monies and holding high levels of debt.

Don’t let the levels of debt phase you.  Only borrow within your means and always ensure your asset value exceeds the debt levels.

Research the types of properties that make great investments, tenancy advice and taxation advice and obtain an understanding of how it all works.

Understanding that purchasing just one investment property will not enable a retirement lifestyle; rather you will need to understand that a portfolio can be five properties and more in order to achieve an early, wealthy retirement income.

Retire Debt

In order for you to retire and obtain an income from property you eventually need to own your property unencumbered or debt free.  This being the case a good strategy is to purchase (over time) a number of investment properties, sit on them as they grow in value and as retirement nears begin to sell some of your portfolio in order to repay all borrowings on those properties you wish to keep.

This will give you a smaller portfolio but a fully owned portfolio.  The rental income is yours to keep.

Obtaining the right property for your needs is important to your success.  Seek advice from those that have done it before and can show you how to build a retirement nest egg.

We have been predicting for the last two years that there will be a shortage of properties to sell, as the building industry has been decimated in recent years, and the demise of some finance companies has meant there has been no finance available for new stock.  Nor have the major banks been interested in financing new residential developments, despite being awash with money!

There comes a time when people start looking at the low returns from bank on deposits, and start considering investment properties as better security, also first home buyers are taking advantage of the lowest interest rates for 40 years!

So where is the market headed?  The huge shortage of rental accommodation has pushed rents up by 10 percent, and a continuing shortage is likely to push them up by another 10 percent in January-February 2012.

The other factor putting pressure on housing stocks is the Australian economy, which is predicted to shed 100,000 jobs between now and Christmas.  It stands to reason that Kiwi workers in Oz will be affected by the tough economic and employment climate, but how many?  It may be as high as 25,000 – and many of them will return home.

Our housing shortage will continue for the next two to three years and consequently house prices will rise substantially.

Economist, Tony Alexander, says that by the time dwelling consents in NZ get back to an issuance level comparable with our population growth, we’ll be 45,000 dwellings behind.  This will place extra upward pressure on prices, especially in Auckland which is showing the strongest price gains.

The most positive move for buyers, investors and sellers alike is that NZ is in a good position to survive the international crisis, and will be ‘first cab off the rank’ in terms of sustainable recovery.

The climate for investment has reached the point where public pressure has caused us to start-up our Investment Seminars again.

The demand is starting to grow.

Spring is often regarded as the ‘selling season.’

Gardens are brighter, the climate ideal and generally better prices are obtained.  If you are thinking of selling this Spring, now is the time for preparations.

It’s often wise to spruce up your property, finish any DIY projects and make sure your property is ready to attract the best possible price.

It is also advisable to begin the interview process so that you can select the agent that best suits your needs.

Another advantage of marketing your property in Spring is that buyers and sellers can be moved and established in their new premises, ready for Christmas.

If you are thinking of selling this Spring contact Lochores Real Estate Ltd to find out how you can obtain the best possible price.

Purchasing your first home is exciting as well as nerve wracking.  With this in mind it is important to keep the decision process simple yet still undertake your due diligence and research before your buy

Many first home buyers get caught up in the mix of nerves and excitement.  The entire process can overwhelm and as a result no decisions are made.

Tips for first home buyers -

• Undertake your research.  How much can you comfortably borrow?
• Identify what are essential features of your proposed new home and what can be negotiated.
• Your first home is a stepping stone.  Stay within your budget and remember that you can upgrade in years to come.
• Seek advice from family and experienced people.
• Be comfortable with your decision, there is no need to rush in.