Where the hell have we been?
Jul 12, 2021
Where the hell have we been?
... That's a good question.
We've actually had messages asking if we've given up thanks to the Government's tax changes and anti-investor sentiment, since we've been quiet online.
The truth is far from it. In fact, that is pretty funny, since the changes have only made trading property MORE attractive and lucrative than ever. We have never been as busy as we are at the moment and the calibre of the deals is significant.
Which means we've been a bit quiet on the social media front. Sorry.
We will aim to post more over the coming weeks, and we're pretty sure you will love to see what is happening out there!
So, here's a quick snapshot of what we're seeing;
Market Momentum: It's no secret that the market is still 'strong', anyone with one eye on things can see that. Prices continue to surprise us, and this has exacerbated the importance of being a market expert and staying 'on the ball'. Some of our team, who are turning over significant volumes, are literally changing the pricing of their stock by the day (no exaggeration) in some cases. If you take one week out of the market, you are being left behind. So if you can't be 'hands on' to that level yourself, make sure you are part of a highly-active community so you can leverage off their updates and observations. Our A.R.T. team use a private Whatsapp group to share updates up-to-the-minute as sales are made or properties are bought, which helps keep everyone on the cutting edge of what's going on.
Development Stock: Throughout the country, and particularly in Auckland thanks to the AUP, properties with a development angle are in HOT demand. Suddenly there are hundreds of new developers around. A more cynical soul than I might say it feels a bit like mania. But with the Government waving their stick around to encourage new-builds, it's obvious to see why this is happening. It will be interesting to see where this all leads, but right now there is opportunity all over the place with this and our team is maximising it to its fullest. If you want to know more about this, we will give some examples on the upcoming Property Traders Report.
New Builds: Obviously the government wants us to build more houses. That in and of itself is a good thing, we need more. It is interesting to watch many investors switch focus to new-builds solely on the basis of being able to deduct interest. New-builds have a place for many investors for sure, but in many cases we've seen people looking at a property which may give them an extra $6000pa from interest deductibility, while dismissing an equivalently-priced property with considerable equity upside and/or the ability to generate further cashflow. The lesson here is to look at the big picture and understand how all of the levers work to be able to make an informed decision either way.
Commercial Property: It is interesting, although not surprising, to see interest in commercial property going up considerably since the government's tax changes. Apparently deducting legitimate expenses isn't a 'loophole' if it's on commercial (or new builds). Graeme Fowler has set up a new page to focus on commercial real estate, the link is in the comments below.
Speculation is RIFE: We know you know this, but it seems there is some confusion out there; Speculation is not investment. Nor is it trading (at least not in the way we do it). When we trade a property, we CREATE VALUE. Right now we're predominantly doing that through cosmetic renovation, or identifying development stock and packaging it for developers. We don't buy and hope it goes up to create a margin, that is speculation. Right now speculation is rife and is working for many people while the market is rising, but one day...The music will stop. For our team, a rising market increases the margin for sure, but we don't rely on it to create the margin. Remember it's only when the tide goes out that we see who is swimming naked. So wear clothes (no judgement either way), and trade to a robust strategy.
This is only scratching the surface, but is a quick overview of what's happening. We can't overstate just how lucrative this current environment is if you are active in it. We're running one of our popular 'Property Traders Report' online events in a few weeks. It's only $5 (donation to charity) and is 90 minutes of commentary, case-studies and new updates and tips. It's well worth your time if you're looking to stay on the pulse. You can book for it here:
Right, if you have any questions or any subjects you would like us to chat about, please let us know and we will do our best to get more content up in the coming weeks. One thing we have a LOT of, is recent examples of very successful deals!