A comprehensive update on the investment property market! Have you paid attention to the essential aspects of renting, financing, taxes, and property rights?

On the evening of July 11th, Uno Property Management hosted an industry knowledge seminar that was met with great enthusiasm. Many attendees gained a comprehensive understanding of New Zealand’s property investment market and legal environment. Uno plans to continue hosting seminars regularly to discuss trends in the New Zealand investment property market with everyone.

During the event, David Liu, the manager of Uno’s property management team, provided valuable insights into investing in new builds for rental purposes. Additionally, we had the privilege of hearing from financial advisors from Apple Mortgage, senior accountant Eric Mao from Nexus Chartered Accountants, and partner Kathleen Morrison from Meredith Connell. They each offered expert analysis on key topics of interest to property investors.

Investing in New Builds from a Property Management Perspective

David Liu began by highlighting TradeMe data, which showed that the rental market in Auckland is cooling down, with various types of rent increases slowing to different extents.

As a result, new builds, which offer more stable conditions and higher rental yields, have become a preferred choice for many investors. In addition to the 100% tax deductibility of mortgage interest against rental income, new builds come with several other advantages that indirectly enhance the return on investment.

David noted, “In the rental market, new builds stand out with their modern designs and new facilities, which improve the tenant’s living experience, increase tenant satisfaction, and boost investment returns. Furthermore, new builds typically meet healthy home standards better, reducing related rental disputes. According to the New Zealand Tenancy Tribunal, rental disputes with new builds are significantly fewer than with other types of properties.”

So, what kind of new builds should investors choose for their investment?

David explained, “Based on Uno’s experience managing over 200 new builds in the past 18 months, tenants highly value the warm, dry, mold-free, and well-maintained living environments of new homes. Many working professionals also prefer rooms with private bathrooms to meet privacy needs and choose locations with convenient transportation for easier commuting. For example, one of the investment property projects managed by Uno consists of five townhouses, each three stories high, equipped with single-car garages and 3 to 4.5 bathrooms. Their excellent location and design cater to tenants’ high privacy demands. As a result, all units were rented out within ten days, with rents ranging from NZD 850 to 890. In contrast, other projects located in more remote areas without well-allocated private bathrooms took longer to find tenants.”

David emphasized that investors should choose their investment properties based on their financial situation and goals. New builds are great for those looking for short-term, stable returns. But if you’re aiming for long-term growth, older houses with large plots of land could be a good bet. Just make sure you understand any potential rental issues that might come up and consider consulting a property management team for advice if needed.

Latest News on Finance and Taxes

Next, Calvin Liu from Apple Mortgage broke down the latest changes in bank loan details, especially the new Debt-to-Income (DTI) rules. He explained, “While DTI restrictions will eventually be rolled out across the board to regulate the financial market, banks are at different stages right now. Some haven’t started enforcing DTI yet, and those that have been doing it in various ways.” So, investors currently have plenty of financing options. It’s really important to find a financing advisor who knows the ins and outs of different banks’ offerings to help you plan your financing structure effectively.

Next, Eric Mao, a senior accountant from Nexus, discussed the new tax rates that came into effect on April 1st, the impact of tax regulation changes on personal and trust-held investment properties, and common tax mistakes made by property investors. Eric reminded investors to stay updated on the latest tax laws to optimize their tax strategies. He also emphasized the importance of clearly understanding your financing and purchasing intentions and staying informed about how the tax office distinguishes between personal residences and investment properties.

How to Protect Property Investors’ Rights

Lastly, Kathleen Morrison, a partner at Meredith Connell, shared key legal insights on protecting the rights of property investors. She discussed potential legal issues that might arise during property investment, especially in complex situations such as “hidden shares” and “nominee purchases.” Kathleen explained how investors can protect their interests through contracts and by keeping thorough documentation. She reminded investors that when dealing with complicated equity distributions in investment projects, having a formal contract is crucial. This can significantly reduce the cost and hassle of defending your rights.

This seminar provided attendees with a multi-faceted understanding of the investment property market, financial strategies, tax planning, and New Zealand’s legal environment. It also sparked many thoughts about property investment and legal rights protection. Uno Property Management is committed to continuing to offer such valuable informational platforms, helping investors stay in tune with market trends and optimize their investment decisions. We look forward to seeing you at our future seminars as we explore more industry knowledge and market opportunities together!