Hi Olly,
My wife and I brought a two bedroom brick flat as our first place in Christchurch in 2007 with thoughts of paying it off to a level where we could turn it into a rental. However we now would like to return to Wellington and i would like to sell it, but we are worried we will have to stay twiddling our thumbs until the market starts to rise again to get our money back. Also having heard scary stories about tenants gives me concerns if we do keep it.
Help! Thanks for any advice you can give.
Regards Dean

Dear Dean
First things first. You don’t say what you paid for it so it is hard for me to give any advice I would get a real estate agent to appraise the property as to its current sale value and rental level and see if you are likely to lose on re sale, or get your money back. If the suggested price is too low you either give up the idea of going to Wellington or rent it out at best rates.

The scary stories your hear are only a tiny part of the truth. Most tenants are decent and if you rent it out through an agent they will do all the checks for you on the tenant before they step through the door.
Regards
Olly

Olly,
I’m wanting to know if you know a (trustworthy) lawyer that would be able to help me remove a caveat from my mum and dad’s property. Obviously there is a long story behind this but the basics are: The caveat was lodged @20years ago by my dad who used the house as collateral for 50k. My mum and dad divorced @two months after this loan was taken out and my dad left and now lives in oz. He made no payments after this time.

My mum (bless her soul) paid off the original ANZ mortgage (@15 years later) and when we went to remove their interest discovered that this caveat still existed — much to our surprise as we had forgotten about that loan.
I have tried to contact the place but found that they had resettled into new trust structures twice (as they were the Pacific Island Business Trust) currently operating as Pacific Business Trust. We have had no contact from this place for the last twenty years, no statements or letters or anything.

The lawyers representing them have been unable to find contract details or forms regarding this caveat. They simply left the loan to grow and [it] now sits at @100k.

My question I guess is, as they never pursued the loan and there seems to be no evidence ie, original contract in existence….is there a legal way i could just have it removed? The property (our homestead) has been stalemate for the last 20 or so years and rotting badly…. We (me and my mum) are wanting to remove my dad’s name, put my name in his place and raise a mortgage to renovate the house but…….this caveat is like a knife we can’t remove, so to speak haha….

Any advice, comments or help would be heartfeltingly appreciated…

Regards Hemi

Dear Hemi
I would have thought that any good lawyer could apply to the LTO and give your story and have the registrar remove the caveat after he has made all the necessary enquires.
Another way that used to be popular was to register a $5 mortgage on the property which meant the caveat would have to be lifted to do so. This method is frowned on but it has been used from time to time.
I invite other readers to submit suggestions to help Hemi and any one else in the same position as the situation is not uncommon.
Regards
Olly

Hi Olly
I’m a builder living in Dunedin and I am looking to get into the property market and my question is is it better to do up houses and sell them on or keep them and rent them out?

Phil

Dear Phil

As a builder you have a huge advantage to start with and yes, doing up houses for fun and profit is one of the best ways to go in the current market.
However you (and any one else) who wants to follow this road to wealth must approach the subject carefully and in a business like manner.
The biggest error made by “ doer uppers” is to spend too much money and time on any one project and end up going backwards.
I have found that one month to get in and to get out should be the target to aim for with the average house.
Regards

Olly

Hi Olly,
Thanks for giving me the opportunity to ask a question. I am interested in gaining a new perspective on my current situation. I own an Auckland city apartment which is cash flow positive. Earlier this year I purchased a four bedroom house in Otahuhu for $359K. I live there with a couple of friends. What is your opinion of Otahuhu? I chose Otahuhu because of its relative affordability, older style homes and large sections. Am I being overly optimistic or simply foolish about the area? The reason I ask is because I am interested in acquiring a third property for rental investment and am not sure which type of property I should select. I am wondering whether it is wise to purchase a 3 bedroom house in Otahuhu for around $300k or whether I should go for a unit in a better suburb. Much appreciate your time.
Cheers, Andrew.

Dear Andrew
Otahuhu has some very nice areas and is one of the more popular South Auckland suburbs. I owned several buildings in the main street over the years as well as flats (Hall Ave, Great South Rd, Walmesley Rd, Atkinson Ave etc) and found it all very profitable most of the time (there were some horror stories but that’s one of the hazards of the game).

Whether you buy in Otahuhu again or elsewhere all depends on the bargain you get.
Let the deal will drive where you invest next- not you forcing the matter. A unit in a better suburb all depends what you call “better”. A good 3brm house is always preferable over a unit but spread out and look and learn. The aim is surely to make money so that is must be your goal. Which suburb and what it is come second.

Some of my clients like buying up in one area because they get to know it well, while others spread around to get balance and reduce risk. So long as you buy well and keep away from bad areas and bad properties you will come to little harm.
Regards

Olly

Here’s a useful summary of the main changes to the Residential Tenancies Act passed on Tuesday night.

NZPIF Vice President Andrew King has kindly given me permission to distribute his analysis to my clients… Click this link to view/download a 140k PDF file.

If you have any questions or comments, please don’t hesitate to contact me.

Hi Olly

It’s great you have given us the chance to ask questions thank you. My apologies in advance if this is a stupid question. We bought our house 4 years ago in Titahi Bay and currently have a mortgage of 247k with rv of 315k. The part we are in is a reasonable part – quiet and owner occupied but other parts of the suburb are not so great. We are thinking of a move to a smaller city (W*) in a year or so (not definite) and also planning on kids and dropping to one income.

We are concerned about the amount of mortgage repayments rates and insurance (plus maintenance) on one income. We are tossing around the idea of selling now and renting or buying something smaller or buying something in W* to rent out till we moved there. We don’t have to desperately sell right now but don’t want to be stuck in year or so having to sell. What are your thoughts? Are we best to wait and try and sell in a year or so or try and sell now?

Vanessa

Dear Vanessa
If you are going to sell you may as well get on with it as it will likely take a few months anyway. But you have to be sure that you want to move to W* so don’t start until you have made your mind up. I would rent in W* for a start as it will be cheaper than owning, and you can see how well you cope on one salary and a little one to feed.
Best of luck
Olly

Olly Newland’s July 2010 column

In this column, I would like to cover a variety of topics, as the last few weeks have been crammed with ‘news’ and opinions about the property market — and much of it arrant, dangerous nonsense.

Some folk in the news media and posters on various websites have had a field day predicting the imminent collapse of the property market. They continue to be spectacularly wrong, it should be noted.

These deluded commentators seem to believe that if property prices fell by 20% to 30% (as some have predicted) then they, and their children would be able to buy a house more cheaply in the future and that would be a wonderful thing. They think a massive drop in the market would make housing ‘more affordable’.

What they cannot understand is if that really happened hundreds of thousands of Kiwis would be out of work, much of our economy and industry would come to a virtual halt, the banks would collapse and New Zealand would be reduced to a nation of ragged beggars left to shuffle through the two dollar shops and rifle garbage bins.

Jobless and with an economy in ruins it wouldn’t matter if houses were a third of their present price. They would still be unaffordable.

It will cause some consternation to these nay-sayers to learn this week, that house prices are still well up on this time last year despite the usual upside down view some in the media always make of these things.

link: http://nz.biz.yahoo.com/100711/3/k6u6.html

I always derive much amusement in the way the media portray good news through the wrong end of the telescope. The headline in this example says: “House prices fall further in June”.

It’s not until you read down further that in fact house prices are still 5.2% higher than at this time last year and the slippage (if  you can call it that) is a statistically insignificant  0.4%. Put another way, it is effectively a yearly increase on the current average price of $404,715 by a respectable $21,045 (or approximately twice the rate of inflation!)

Read the rest of this column

Mortgagee sales continue to soar

Olly Newland on TV3 News (click to watch video)

By Ingrid Hipkiss
TV3 News SUN, 04 JUL 2010
Watch video at TV3

When the credit crunch first hit the property market, it was developers and investors with multiple properties who bore the brunt.

Now, market analysts say the pain is more widespread.

“We’re seeing more and more mortgagee sales affecting the kind of individuals we term ‘Mum and Dad homeowners’,” says property market analyst Mike Donald.

Latest figures show an average of eight properties go under the mortgagee hammer every day, their owners unable to afford their mortgage payments.

That is down from highs of 11 per day in September 2009, but still about seven times what they were pre-recession.

“What people should be doing is going straight to the bank to make a deal,” says property market advisor Olly Newland. “The last thing a bank wants is to take your house back and have another house on its books. They’ll do anything, within reason, to make a deal.” (more…)