Investor's Stuff

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Susan Edmunds - Stuff 2015 put together a very good article of which i want to use here.  Makes for great reading;

Some of New Zealand's top property investment experts say there are a number of common mistakes Kiwi landlords keep making.  Whether you're a new investor or have a few properties in your portfolio, avoiding these pitfalls will help you reach your goals more quickly.  Believing property investment will solve all your financial problems Property consultant Lisa Dudson, author of the New Zealand Property Guide, said many investors had too simplistic an outlook. "Just because you own property, it doesn't mean you will automatically be wealthy and be able to retire comfortably." She said it was important not to expect to be able to make a lot of money overnight by doing nothing. "People get caught up in how much money they can make and don't realise the amount of work you have to put in." Not doing the numbers Dudson has seen many people spend hundreds of thousands of dollars on a property without first doing any analysis of the deal. Ad Feedback "They don't think about what the cashflow will be, what the deal will do for their financial positions, whether it will be positive or negative, or what other costs will be included." David Whitburn, project manager at Fuzo Property, said many people did not know the difference between the gross yield of a property - a basic calculation of the rent coming in as a percentage of the purchase price - and the net yield - what they would earn after all the costs were taken into account. Costs could easily make the difference between a purchase being a good opportunity or a long-term drain on finances.  Property commentator Olly Newland said he often encountered people who were stuck in "empire building" mode. "They get carried away by the number of properties they own and think they are the emperor of a kingdom or something, but the properties are producing no income." Not understanding the risks People get tripped up by their belief that property prices only ever go up. Dudson said it was important for property investors to know there were risks. "Most can be minimized but you have to know what they are." She said one example was leverage, which boosts returns when used well. Property investors have access to much more leverage than investors in many other asset classes. Investors outside Auckland can buy a $500,000 property with just $100,000 deposit and benefit from the gains of the full $500,000 investment. If prices move up 5 per cent in a year, their $100,000 deposit becomes equity of $125,000, rather than just $105,000 if there was no leverage.  But leverage also intensifies risk. If prices dropped 10 per cent, the house would be worth $450,000 and half their initial deposit and equity would be gone. Not getting advice Property investors can avoid mistakes by learning from those who have already seen others make them. Dudson said all property investors should have an accountant with experience in property investment, a property mentor or a financial adviser to talk to.  

A warmer home is healthier for tenants.  It’s important to be aware of how a home will perform in the colder months.  Insulation is a good sign that a rental property will be warmer, drier and easier to heat.  

Insulation Statements

Insulation statements are now compulsory in all new tenancy agreements, so tenants know what to expect.  Next time you’re looking for a rental, make sure you ask the landlord to see the insulation statement before signing the Tenancy Agreement.

More on insulation statements

Ceiling and underfloor insulation must be installed, where it is reasonably practicable to install. It must comply with the regulations and be safely installed. Wall insulation is not compulsory.Any new, replacement or top-up insulation installed after 1 July 2016 in a rental home must meet the regulations that will apply to all rental homes from 1 July 2019.A landlord who fails to comply with the regulations is committing an unlawful act and may be liable for a penalty of up to $4,000.