Original STUFF article here

OPINION: I’ve been an investor for more than 30 years now and house prices are something I’ve never been interested in, or paid much attention to.

I’ve never thought “should I buy now?” because I just read a headline to say that prices in my area are soaring.

So many people ask me: “What do you think the market is going to do?”

My answer for the last 30 years has been fairly consistent: I don’t know. I don’t care. Hopefully prices will drop. Why does it concern you? If you did know what was going to happen, what would you do and why?

The idea that you can predict what house prices will do at any point in the “cycle” is one of the myths that catches property investors out.

Here are a few others.

Myth Number One.

Generally, investors think that the big cities such as Auckland, Wellington, Hamilton and Christchurch will be better to invest in because they falsely believe that...

Original article Here

In reaction to the speculation that the official cash rate and OCR may drop below zero in the months to come and the bid to win the business of Kiwi home buyers as the country recovers from COVID-19, we've seen the banks enter what looks like an interest rate war.

In fact, just last week ASB made the move to offer a record-breaking low two-year fixed rate of 2.69%, and Kiwi Bank responded to the forecast change by offering a one-year rate of 2.65%. These rates have literally never been seen before, even considering back in '08 after the GFC when interest rates plummeted by around 3% (from 8.6% to 5.9% fixed) the competitive and reactive environment we're witnessing now is utterly unprecedented.

So what's the reasoning behind the extremely low interest rates and New Zealand Bank wars? Well, ASB executive manager of retail banking, Craig Sims, stated;

"This has been a difficult time for a lot of our customers. While we have put in place a number of support...

Not having a Plan B and Not understanding the risks and downsides.

By James Upton

Disclaimer: Nothing is this article is meant to constitute financial advice of any kind, and is the opinion of the author only. Seek professional advice before making any financial decision.

 

 

When I tell people that I am a property investor their response is often;

“Oh really, you must be a bit of a gambler… Bet you are hoping the market rises again soon?!”

When I hear this response time and time again, I have a little chuckle to myself.

In my opinion I could not be less of a gambler if I tried and I have strategies no matter what the market is doing, not simply being a speculator and waiting for it to increase. In all reality, my risk tolerance is very low and I have a number of exit strategies or Plan B, C and D’s for every trade property or buy and hold property I purchase.

For example, I just completed a trade in South...

Not Knowing which expenses are deductible and how to maximise them

By Glynis Carter

Disclaimer: Nothing is this article is meant to constitute financial advice of any kind, and is the opinion of the author only. Seek professional advice before making any financial decision.

 

 

The tax rules around deductibility of expenses for rental investments can be quite gnarly and you do need to have a good knowledge of the tax legislation to make accurate assessments on these.

Making a mistake in this area can be costly and may cause you to upset your long-term holding strategy. Some expenditure can become “black hole expenditure” where it is neither deductible nor depreciable, which is definitely not the outcome that you want.

When you are calculating your rental investment profit/loss and cashflow needs, there are normal rental expenses that can be claimed such as described by Phil in his chapter on positive cashflow. However, some items affect...

Here's a big mistake property investors make: Not understanding Counter-Cyclical Investment and FOMO/FONGO

By Sally McCormack

 

 

When you are new to trading property, you and everyone around you is making good profits, you feel invincible!

This was how I felt leading into the biggest mistake I ever made in my property investing journey.

I started property investing in 2014 and in that first 12 months we were in a very hot Auckland market. Vendors were very realistic with selling their properties and first home buyers and investors loved to buy our renovated stock, which resulted in our sale prices increasing as well as our profits. It was like we couldn’t lose! A deal with $30,000 after GST profit would turn into $60,000 easily. It was no wonder that we didn’t see the signs of the market changing, we had dollar signs in front of our eyes.

In 2015 The Reserve Bank announced that in October of that year they would...

Here's a radical thought: An Investment should pay US, not us pay IT

Disclaimer: Nothing is this article is meant to constitute financial advice of any kind, and is the opinion of the author only. Seek professional advice before making any financial decision.

 

 

Stuff-It-Up Strategy

When you think about investing, do you get really excited at the thought that you can LOSE money every week?

Well, you are not alone. People have been doing this for years in New Zealand and thinking it’s a great idea.

They purchase a property and the rent does not cover the costs of owning it.

“Which costs?” you ask. Good question. Things like: Mortgage interest and principle repayments, Land rates, Water rates (in some cases), Body Corporate fees, Insurance, Property Management fees, and maintenance to name the most common ones.

An example of this type of property would be:

Purchase price: $700,000

Rent per annum: $30,000 ($600 per week x 50 weeks, allowing for two...

 

 

** (This video is an excerpt from AssetLab's Masterclass 'Positive Cashflow' taken from Module 1 ) **

 

Now go and create some passive cashflow!