23 Tips For Property Investors Who Want To Maximise Borrowing and Savings

23 Tips For Property Investors | iRefi

If you’re a property investor looking to maximise your property and mortgage savings this is information for you. Many property investors do not take advantage of cash back incentives from banks, they often miss out on the lowest interest rates available, and have NOT been told about their options with property ownership for tax efficiencies. Imagine if you could easily lock in lower rates now (rates are predicted to increase by NZ bank economists Nov’16 ) and secure more cashback for your current lending. You don’t always have to change banks to get a better deal.

If you’d like the peace of mind knowing that you’ve got the best rates and structures available, try the iRefi Mortgage Scorecard tool that in 90 seconds will tell you how much you can save, how much you can borrow, and show you the value of your portfolio. Property investors across New Zealand (especially in Auckland), have been refinancing and rebalancing their portfolios while their rates have been at their lowest ever, this is because they want to free up servicing and securities to prepare for the future.

Using your current property’s equity as a deposit is the most common way to build up a portfolio. Purchasing your next investment will usually require you to take on more lending (for the deposit) and you’ll want to make sure you avoid costly mistakes that slow down this process or cost you money. Most of our clients are ‘buy-&-hold’ investors who will get properties revalued after purchasing, renovating, or waiting, and recycle their deposits to keep buying. We’ll assume you’re an investor planning to hold properties.

How to maximise interest savings & cashback on your home loans

1. How to get the most cash back on new and existing lending

For every $100,000 of new lending (refinance, top up or new purchase) you can expect to get $300-$1,000 cashback. You will have to stay on as a client at that bank for 3-4yrs or risk giving the money back. Getting 1% cash back ( ie $5,000 for $500,000) is not common anymore, you have to bring a lot of bargaining power to demand that, and it often leaves you with slightly worse rates. Aiming for $600 per $100k of lending is a good target. Sometimes you can get cashback for refixing at your current bank… this is not advertised and you have to know how to ask.

2. How to get the lowest interest rates without too much effort

Advertised rates dropped as low as 3.99% in the last few months. The offers you get will depend on your Loan to Valuation Ratio (LVR), your servicing income, your portfolio type, and the person who negotiates the rates. Banks will not offer their best rates to everyone. Investment properties do not usually get the same low rates as owner occupied properties (more risk for the bank). How can you negotiate from a position of knowledge and power? It takes time to rate-shop and rates change daily.

Rate-shopping is often a time-consuming task… is it worth it if you can’t guarantee a good result? If you want the best rates sometimes you have to move your primary banking or owner-occupied property to a new bank. Mortgage brokers are negotiating deals for clients every day, they’re getting information not usually available to property investors. They know what banks have on offer. They know how to bargain for a deal. Using a broker is free and will save you a lot of time. Your leisure time is precious.

3. What are break fees and why do they matter?

If you break your fixed term agreement with the bank early, ie 8 months into a 2yr term, you will have to pay a break fee. Usually, the break fee is the loss the bank faces and you will have to repay the loan and the fee. Many property investors have been breaking their loans early as interest rates have dropped for 2 main reasons: the first is to lock in the lower rates for better servicing allowing them to borrow more. The second reason is the savings from lower rates combined with a cashback. If you have not received any cash incentives for your current lending in the last few years, it’s worth checking if you should refinance (or break and refix) to lower rates and get yourself some cash in the process.

Banks hate this… unless you’re refinancing your loan to them. Major banks have teams dedicated to helping customers switch. You’ll see banks competing all the time to win your business. This is refinancing. For loans over $400,000, this often makes sense (and for smaller loans where your motivation is to buy another property) with savings $3,000+.

4. How to minimise debt costs

You’d be amazed how many savvy property investors are looking for high returns on their investments but fail to see they’re wasting money on credit card debt. If you’re losing 18%+ on any debt that doesn’t earn rent or capital gains… you may consider putting this into your mortgage and getting back on top of it. Your best investment will be to pay down expensive debts.
This includes – Q card, Harmoney and Personal Loans, Car Loans, GEM Visa, Hire Purchases…This negatively affects your borrowing power.

5. How to structure your home loan using interest rate averaging

If you wanted the cheapest possible interest rate today, it’s likely you’d fix your whole mortgage for one year. However, this isn’t necessarily a good idea. If rates next year were significantly higher, you’d have to refix your home loan at a much higher rate and face a massive increase in your costs. Likewise, if you wanted the ultimate in long-term security you might choose to put your whole loan on a 5yr rate. This is great, as long as interest rates don’t fall. If they do, you’ll be stuck on a high-interest rate. Most mortgage advisers will suggest a combination of various fixed terms and a floating portion to minimize risk. This is called interest rate averaging and protects you from making mistakes.

It’s worth considering the best way to get the best of both worlds taking 3-4 portions, and fixing them for different terms (1 year, 2 years, and 3 years for example). Over time, you’ll get an averaged interest rate and have the opportunity to review a significant portion of your mortgage every year or two.

6. How to use interest only mortgages

From time to time we see clients who have received bad advice. The mistake is paying principal off their mortgage against the investment property while there is still a mortgage on their owner-occupied property.

The correct way is paying interest only on your investment property and to concentrate all your principal payments towards your owner occupied until it is fully paid off. This is because interest paid on your investment property is a tax deductible expense while the interest paid on your owner-occupied is not. If you have extra cash then put this into your owner occupied. You will pay off your mortgage faster this way.

Investment Property: The investment property will give you a % of rebate every year depending how much loss you are making and what tax bracket you are in. This means the more you owe the more you will get back (assuming you are making a loss). Once you have paid off enough principal on your investment, you will not receive the rebate because you are now making a profit. Instead, you will need to pay tax.
Owner-Occupied Property: There is no rebate. If you pay it off there is no payable tax. The aim is often to freehold this property asap to re-use the property as security for the next purchase.

7. Why you should offset your mortgage

Using an offset loan takes any savings you have from your transaction accounts (such as cheque, savings, rent or maintenance) and pays that much less off your mortgage. If you have a $500,000 mortgage and $50,000 in your accounts, you’ll only be charged interest on $450,000. This works with either principal-and-interest or interest-only terms. You could take years off your home loans, saving thousands of dollars in interest. This could also help you into another property investment sooner. Not all banks offer this revolving credit.

Revolving credit is a flexible loan that you pay off when you can and withdraw up to the limit if you need to. You can take out any of the money you’ve paid back. When used correctly, your revolving credit is your everyday fund. You have the flexibility to repay your mortgage at any time using your income.

You can take this money out of your account and use it to pay for credit cards, renovations or investment properties. Directing your income into this account will lowering the interest calculated on your mortgage at the end of the day. This will save years of interest payments on your mortgages. $10,000s of savings when used correctly.

Setting up tax efficient structures for your property investments

8. How to get tax efficient property ownership – LTC

What is a ‘Look Through Company’ (usually referred to as an LTC)? It is a limited liability company with the advantage that it allows you to be more tax efficient. If you have been making a loss in your investment(s) for several years (negative gearing), you can top up your mortgage under the LTC to pay back the shareholder(s) and, as a consequence, this new mortgage is a tax-deductible expense.
The second advantage is that you may attribute the loss to the higher income earner (for a couple investing together). If your family has a major breadwinner who earns far more income, and you own your investment properties jointly under your personal names, chances are you are losing money every year through inefficient tax structures. You will be able to save money every year with a revised structure.
As always you must seek good advice and you need to be careful. You do not fall into the ‘tax avoidance’ category with the IRD.

LTC ownership is common for NZ property investors.

Let’s take a look at this example. Jim is earning $100,000 as a sales manager and Sarah is a part-time caregiver earning $23,000. They own an investment property that is making a $15,000 loss a year. The ideal outcome would be to assign all the losses to the highest taxpayer in the family (with an LTC). Owning the property jointly (without the LTC) would mean the tax loss is split 50/50. By owning it in a company (LTC) you can split the shares and it would allow you to assign your tax loss to the higher income earner.
Let’s say they make $15,000 loss on their investment, their tax benefit owning it jointly would look like:

  • $7,500 x 17.5% = $1,312 tax back (Sarah’s income taxed at the lower bracket)
  • $7,500 x 33% = $2,475 tax back (Jim’s income taxed at the higher bracket) Total tax benefit = $3,787
  • If Sarah had another baby and decided to go on maternity leave, there would be no tax benefit for her.
  • $7500 x 33% = $2,475 tax back Total tax benefit = $2,475

However, if they own this investment property under an LTC; Jim can have 99% of the shares and Sarah has 1%. Even if Sarah went on maternity leave, the tax back would look like:

  • $15000 x 33% = $4,950 tax back Total tax benefit = $4,950
  • A $1,163 – $2,475 difference in cash in hand… every year.

We’d suggest you put this into your principal and interest payments for your owner occupied or towards extra insurance. Some people say that $2,000 savings isn’t worth their time. If you make $2,000 savings off the back of the work of others (your accountant and mortgage adviser) this equates to free pay you didn’t have to work for. If you make $2,000 a week and someone wants to give you a week’s salary for free… why not take it each and every year? This is the hassle-free that will get you to prosperity faster.

9. How to protect the wealth you’ve created – Trusts

Are you certain that your family assets are well protected? How should you protect your portfolio?
In New Zealand, a Trust can give your assets protection against a creditor’s claims – assuming it’s set up and administered properly (get good advice). You need to set up a trust while you are solvent and before a de-facto relationship is deemed to have commenced for the trust to be defendable from spouses or creditors. Another advantage of a trust is pre-planning now who will benefit from the trusts in the future. A good place to start is putting your family home in a family trust so it is separated from your business and property investment activities. This will also force you to think of the ‘what if’ scenarios so you can pre-plan for the best for the people around you.
Trusts are not a required entity for property investors, especially if you’re working on PAYE and only plan to have a few investments. If however, you are self-employed or plan to build up a portfolio of many investments, it’s worth getting advice from a Trusts Specialist that understands the property AND legal implications.

10. How to protect the wealth you’ve created – Insurance

Life Insurance, Income Protection, Medical Cover, House, and Contents, Disability Cover… most Property Investors see the benefits in future proofing and protecting their lifestyles and assets. New Zealand has world class insurance companies providing comprehensive cover at fair prices. You should be getting an insurance review every year or so. At least as often as you buy properties, change jobs, have children, basically even major life event. It’s crazy how many investors leave insurance policies unreviewed for 5yr+
Navigating the different policies requires insights into their pros and cons. Old policies are often out of date and you can get more cover for the same premiums (monthly payments stay the same and you get $500,000+ more cover). Insurance is a small cost when you consider it protects your family and your income if anything happens to you. Paying $10/week less might be costing you $100,000 later on.

11. Using a chattels valuation to save thousands

Instantly save $500 (minimum) through ‘chattels depreciation’. What is depreciation? A reduction in the value of an asset over time, due in particular to wear and tear. For your property investments, the chattels are assets that can be depreciated over time. For example, carpets, blinds, the stove, light shades, air conditioning units, handrails, fences etc. If you bought the property with chattels on the sales and purchase agreement or if you get a chattels valuation then there is an opportunity for you to save more tax.

Here is an example of how it works:

After getting a chattels valuation for $600, Steve was advised that his chattels are worth $20,000.

His accountant then helped him set up a depreciation schedule for 5 years. This becomes a $4,000 tax deductible expense. Since Steve is earning $70,000, he is in the maximum tax bracket. He will effectively save 33% x $4000, $1320 tax per year for the next 5 years with $600 initial outlay. This is $6,000 savings.

How to maximise leverage and use equity to keep buying

Recently Simon and Jane were pre-approved to make another purchase with their bank for $1.3mn, on the condition they sold one of their properties within 3 months of the next purchase. This was not acceptable to them. They wanted to buy without selling and get approved for more. After working with iRefi, Simon and Jane got a $1.5mn pre-approval at a new bank and were amazed to see the mistakes they’d made previously based on poor advice. It was great news to them that they did NOT have to sell one of their other properties to buy again. The end result was more leverage, better structures, and lower rates (and very happy clients).

12. How to maximise your borrowing power and avoid cross securitisation

Cross-securitization is defined as more than one entity guaranteeing for the same liability. You can have one big portfolio that the bank can use as security for all your investments OR you can split them up and use different banks for your properties. This is also known as separating securities. The more cross-guarantees the better it is for the bank because there is less risk for them. If you default on one of your investments, you might get a domino effect where the bank can take equity or sell your other properties to repay the debt. By separating your securities it minimises your risk.

The banks have regulations around their overall risk position and if there are regulation changes they can be less predictable. For example, the LVR policy change that took place in Oct 2015 where the deposit required on an investment property in Auckland increased from 20% to 30%. This forced the banks to withdraw the majority of their approvals on investment properties. Again in Aug 2016 this deposit amount increased from 30% to 40%, this is now applied across New Zealand.

When using multiple banks you minimise your exposure to the risks of losing everything and you can increase your borrowing power and total lending. Often this will mean the difference between getting another property now vs having to wait.

13. How to maximise your borrowing power and understanding servicing

Ever wonder why one bank may offer more borrowing than another? The difference is in the calculations by each bank.

Your mortgage repayments are calculated slightly differently at the 4 major banks. If we take your income minus expenses we get your money available for new financial commitment (uncommitted income). For new lending, all banks are similar and will calculate this with a premium. For example, if the interest on the market is around 4.5%, the bank will minimise their risk by using 7.5% (principal and interest) when they are calculating your borrowing capacity. For example: $500,000 on 7.5% principle and interest at 25 years = $3,695 per month.

This means you would need at least $3,695 uncommitted income by the end of the month to borrow $500,000.
The biggest difference comes from the calculation on existing lending/mortgage that will not be refinanced. At ANZ and Westpac, new lending will be calculated at the same rate. However, at BNZ and ASB they will take the existing interest rate that you are paying. This is why it’s important to lock in low rates when they’re available (for servicing).

For example: John has $700,000 at ASB and wants to borrow $700,000 from ANZ (for his next investment property)

  • Scenario 1: uncommitted income required would need to be: $1,400,000 x 7.5% P&I at 25 years = $10,345 per month
  • Scenario 2: If John is currently is paying 4.5% at ASB and took new borrowing of $700,000 to BNZ instead his
    uncommitted income required would need to be ($700,000 x 7.5% P&I at 25 years) + ($700,000 x 4.5% P&I at 25 years) = $5,173 + $3,890 or $9,063 per month.
  • That $1,282 difference ($10,345 – $9,063) per month is equivalent to $18,000 more gross income.

 

14. How to provide the best application to the bank(s) – Character

Understanding the 3 major elements of lending will give you an unfair advantage over other investors. A mortgage application is similar to a resume. You are presenting yourself on paper to get the best lending. People often have questions such as; ‘I have a lot of equity why won’t the bank lend me more?’, ‘I have lots of income, why won’t the bank give me better rates?’. There are 3 main constraints that will determine how much you can borrow and what rates you will get.

Number 1 – Character.

This is likely to be the most important. The bank wants to see that you know how to manage your money with consistency. The documents that tell this story are your loan application form & bank statements.

Savings history – You get brownie points with banks if you are consistently living below your means. Account conduct – are you paying your bills on time? do you make sure not to overdraw on credit card limits and overdraft facilities?

Stable employment – the main thing the bank wants to know is that your income is predictable and consistent. Are you changing jobs because of career progression? What is your income situation?

Number 2 – Security

In order for the bank to lend you money, they need to take a collateral. Here is the formula on how you calculate your maximum borrowing from an equity point of view.

  • Value of Owner Occupied x 0.8 = maximum borrowing available
  • Value of Investment Property x 0.6 = maximum borrowing available

How does the bank determine the value of your property? Most banks will take a ‘desktop valuation’ of your property. This is based on recent sales in your area of comparable houses. If there is not enough recent sales data, a registered valuation might be required (this is also needed for plaster homes).

Which bank will give you the highest valuation at no cost? Banks work out values differently.

  • ANZ – e-Val – desktop valuation from Property IQ.
  • Westpac – e-Val – desktop valuation from Property IQ.
  • BNZ – i-Val – desktop valuation from Valocity. In some cases, i-Val can be higher than e-Val
  • ASB – Govt. Valuation or Purchase Price – ASB has their own desktop valuation for some properties.

Do NOT pay for a valuation. You might not need one… saving you $700 & 2 weeks. Ask your adviser first.

Number 3 – Income

Income is looking at your ability to service the debt. You might have enough equity to borrow $1million but your income might limit you to $800,000. This is a simplified formula: net income (after tax) – living expenses – other financial commitments = uncommitted income.
For example, if you are left with $3,000 at the end of the month, then the bank will lend you $430,000. $430,000 x 7.5% principal and interest over 30 years = $3,006 per month.

Net income – one of the things that people often forget is that KiwiSaver and student loans are financial commitments. The best figure to take is the net income. Rental income can be used, it needs to be scaled down by 75%, and boarder income scaled down by 50%.

Having cash will also help you borrow more. Depending on what you are buying and where (buying an owner-occupied in Auckland is much different from an investment in Hamilton).

15. How to use boarder and rental income to maximise borrowing

All rental income received on investment properties are scaled down. This means they only take a % of the rental income to service your loan. With BNZ, it is the only bank that will take 80% income. This 5% can make a significant difference when a significant portion of your income comes from rent.

ANZASBBNZWestpac
Rental75%75%80%75%
Boarder100%75%80%50%

With boarder income, only BNZ and ANZ will use 100%. The maximum boarder income that can be used across all banks is $300 (or $150 per boarder). With BNZ, they will require a boarder agreement and evidence of regular deposits in bank statements, however, ANZ only requires a boarder agreement. With $300 per week of boarder income, it can increase your borrowing up to $200,000.

16. How To Factor For Child/Dependent Support Costs

Banks know that children can be expensive. Here is an estimate of the minimum ‘dependent expense’ at the 4 major banks (regardless of what your expenses say).

Child SupportANZASBBNZWestpac
Expense/Month$295$295$375 – $400$120

You might not think this is a huge difference, but when you have 3-5 children, things escalate pretty quickly.

Case Study:

We had a client with 5 children who needed another $150,000 for some major renovations. While ANZ provided great service throughout the lifetime of their loan, based on the ANZ servicing calculation, it just didn’t work out for them. iRefi.co.nz suggested the client refinance from ANZ to Westpac to make the deal work and help the client achieve their goals.

How to get a bargain and avoid being ripped off

17. How to find your property investments with help from real estate agents

Use Buyer’s Agents who has investments in the suburbs you are targeting. Buying the right sort of property as an Investment, especially in the early stages of creating a portfolio, can be reasonably difficult. As there are many non-negotiables in the property investment world, the majority of stock on offer may not fit your requirements. Buyers Agents (also known as Property Finders) are in the business of finding properties which will suit Property Investors’ needs. You can send them a list of your wants/requirements and ask them to find a property in their region for you. Build relationships and be patient. Show them you’re committed by having a pre-approval and a specific list of requirements. For example: ‘2 bedroom, big lounge/kitchen, lots of room for improvement, in suburbs close to hospitals, between $300-400k’

Buyer’s Agents generally offer to sell on the contract that they already hold with the Vendor. While we cannot speak for all of these properties, most of these will be pre-qualified in your shortlist for your purchase. You will still have to do your Due Diligence. As Buyers Agents rely on the on-sell of this property as commission, they are already less likely to hold stock of property that won’t sell. It’s generally a fairly safe bet that these properties are sufficient investments because if the property doesn’t sell, a buyer’s agent will occasionally settle on the property regardless and keep it as a rental investment themselves. It’s also worth considering paying these agents for their work if they deliver.

18. Using historical data and free information

Sites that will help you:

  • Homes.co.nz – A huge database consisting of sale price and estimated home value. This provides key insights into areas you may not be familiar with and opens up the door to seeing exactly what’s going on in the areas you are interested in.
  • TradeMe Property – recent sales and trends
  • Interest.co.nz – Understanding market trends will help inform you when you make your decision.
  • Auckland Council – Free information about the proposed Auckland Unitary Plan changes in zoning.
  • For Experts – (we have a paid login and can look properties up for you if you’d like)
  • Property Guru – Dive even deeper into gathering more information around prospective properties. CoreLogic hosts so much data and extra information around the property you might be looking at buying and really leaves few stones unturned for investors and developers around who owns exactly what.

19. Identify properties before they come onto the market. Pre-listing

The majority of houses are advertised on listing sites. However, there is a small portion of homes that are offered first to a group of investors or prospective investors, before they reach these sites. Most Real Estate Agents will have their own Investor Network they have built over the years to which they know there are qualified buyers waiting to buy anything that meets their needs. Real Estate Agents are bound to act in the best interest of their clients. As long as this is the case, they are happy to offer these properties to their networks in order to get a quick, favourable result for the Vendor. The key in this tip is – get into this investor network.

It is imperative that you are professional in dealing with the Agent for you to be treated the same. If you are “just looking” and “getting a feel for the market”, it’s very important that you express this to the Agent, so they know which stage you are at. If your situation changes at any point and you are no longer looking to buy – say something. Being open on your end keeps your credibility alive with the Agent and that is something they can respect. Tarnishing this early on can often rule you out of future deals and entering their investor circle. Similarly, as soon as you are in the position to buy, let them know you are now serious. This way they know they can approach you with a deal in confidence that, provided it fits what you have been looking for, you will be seriously considering purchasing.

20. Get your pre-approval early

Going to the effort of searching for a property online, talking with agents, putting time aside to visit a property, actually visit a property, and then pursue a property with due diligence can be a lengthy (and expensive) process. It’s inefficient and wastes a lot of time for you to embark on such a commitment, without even going through the process of finding out if it’s feasible first. Can you get your finance approved?

Talking with your Mortgage Advisor about pre-approval for the next purchase will allow you to look at different options. Does it make sense to use your current bank or bring in another bank? Will you need to use a non-bank lender? Has your portfolio had another expert set of eyes to point out holes and issues you might not have seen before which can limit your portfolio in the future? The last thing any investor wants to do is get stuck or have their options limited. This is something easily avoided provided you know what your options are around structuring your portfolio in a way that suits what you’re wanting to achieve in the future. Getting a pre-approval is a part of that process.

21. Consider apartments

Apartments are favoured for their higher yields. This isn’t to say that it doesn’t come with a price. With an apartment, you are bound by a body corp and their rules. It’s less likely that you will own any land. However, they generally cost less and the difference in rent is not likely to be proportionally less – which leads to the higher yield. Keep in mind that it’s harder to increase the value of an apartment through your own efforts other than buying underneath the market value.

Note: Make sure you are clear on the body corp fees and rules. Make sure the numbers stack up and if you’re confident, proceed. Talk with real estate agents who are not affected by the sale of the property you are looking at and work with a mortgage adviser to help with your due diligence.

22. Consider new builds

The construction of housing in New Zealand remains relatively untouched from the Reserve Bank of New Zealand’s recent LVR restrictions. Lending for Newly built or Completed Homes (Code of compliance issued within the last 6 months) can be conducted with a 10% – 20% deposit as either owner occupied or as an investment property. This is obviously to ensure that the construction of new property continues during the housing shortage we currently face.

Extra for Experts: Newly built property can have favourable tax benefits when claiming depreciation. This is going to vary on a case by case basis, but your property accountant can give you sound advice as to what you can and can’t claim for.

23. How to use due diligence to minimise risk

Due diligence spans further than just obtaining finance and your solicitor’s approval and starts well before there is a conditional agreement. The biggest question any investor faces is ‘Is this property the next step in the direction I want to head for the results I want to achieve?’.

Does this property fit into your investment criteria (do you have this written down or are you buying on a gut decision)? Are you breaking any of your non-negotiables? Can you foresee your next step? With your pre-approval already sorted, the remaining conditions in your agreement are easily sorted.

A Builder’s Report, Solicitor’s Approval, Toxicology Report and LIM are usually left until later and can be done in the decided time. We suggest 5-10 working days given your finance is already approved.

Extra for Experts: Making an offer without the ‘Finance Condition’ is going to look much more attractive to any Agent and Vendor. The condition is generally seen as a ‘bail-out’ clause and removing this can show how committed you are to the purchase as the majority of vendors and almost all Agents would agree that majority of contracts fall over due to financing. Consider adding a ‘Due Diligence’ clause instead.

Before committing to a conditional agreement there are a few things you may want to consider about the property before putting pen to paper:

  • Numbers: Compare the selling price to other places in the area and previous history. Is it being discounted and sold under the market value? How can you add value? Renovations/Extra bedroom/Subdivision potential? What is the projected yield? What’s your position afterwards?
  • Neighbours: What is the suburb like? Have you lived here/would you live here? What kind of tenants does this neighbourhood attract? Is this a big factor for you or not?
  • Land/Buildings: Is there any immediate remedial work that the property must undergo? Are there any concerns about the land?
  • Tenants: Are there current tenants? Do you need new tenants or would you like to keep the current?
  • Vendor: What are the reasons the seller does not want the property anymore? Could there be anything about the property that has caused them to want to sell?

Once you are confident on the above you can proceed to conduct due diligence to complete the transaction of the property:

  • Check the Title
  • Discuss Tax Planning with your accountant
  • Review Contract with Solicitor
  • Unitary Plan for Land Use
  • Inspect the Property in person
  • Confirm Finance Approval
  • Conduct Building Inspection
  • Request Toxicology Report
  • Obtain remedial quotes
  • Obtain LIM
  • Check for further costings for property to obtain Council Consent

Each of these steps requires an expert and can take days or weeks to complete, an organised buyer will have an advantage over people who ‘make it up as they go’, so make sure you’re prepared.

Conclusion

Property investing requires you to make good decisions when buying and selling. Avoiding costly and ongoing mistakes will help you create your desired income and lifestyle sooner. Your investment property values have probably increased over the last few years. How can you be sure you’re maximising your financial gains? Are you certain that your mortgage is structured the best possible way to maximise tax savings? Do you have questions or doubts about what to do next?

The results our clients get typically range from $3,000-$5,000 savings within the first year. Sometimes clients will save $50,000+ when we help investors make property purchase/selling/structure decisions. Using a free mortgage adviser might work for you.
Email us at support@irefi.co.nz to find out or call 0800 733 462 for more info