The renovation strategy involves adding value to a property in order to onsell it at a higher price. Renovations may be as simple as cosmetic improvements (e.g. painting, floorings, etc), or as major as extending or altering the property in some way.
Someone else’s back is a buy and hold property strategy. It is based around Cash flow Positive properties. The aim of this strategy is to input as little as possible of the owners resources into their properties. Basically the tenants end up financing the property until it is entirely paid off. This will often be over a 25 year period although this will be reduced if the property is considerably cashflow positive since it’s excess income can be used to pay it off faster. Obviously this really only suits Cash flow Positive or Cash flow Neutral properties.
The Snowball is a buy and hold property strategy. The idea of the snow ball is very simple: purchase enough properties to make the investor financially free once they are all paid off. These properties can be Cash flow Positive, Cash flow Neutral or even Cash flow Negative, as long as the investor has a decent amount available above living costs and any additional costs imposed by these properties. It does work best with positively geared properties.
A table mortgage is a loan where you spread your repayments evenly over the term of the loan, commonly up to 25 ir 30 years. This means that at the beginning of the mortgage you are paying back mostly interest and only a small amount of principal.
Many investors have a set of rules which helps them focus effort when searching for property to buy. The rules will immediately create a shortlist of properties to investigate, by eliminating all those that do not meet the criteria.
It is widely recognised that property (along with other forms of investment) follows a predictable cycle. The New Zealand property cycle has three recognised stages of boom, slump, and recovery.
Are there a lot of relatively new, highly indebted investors who’ve never weathered a market cooling? That being a possible drop in house prices/values and an interest rates rise? What’s going to happen to them?
The golden component of property investment is a concept called ‘passive income.’ For most people on wages or a salary, work is all there is. I.e. except for paid holidays, no work = no pay.
Property investment is a business and must be treated like one. Whether residential or commercial, a new property investor is now ‘in business.’ Not everyone is able to do this, because it’s not in their nature to cope well with such things. Dealing with tenants requires many personal attributes such as communication skills, patience, a working knowledge of the law, sometimes a very firm style of personal approach, and so on.
Advice – Where Does One Get It? And How Good Will It Be? Property Investment education is gleaned from many sources. The Property Talk Forum
Are you tired of the problems associated with residential investment properties, such as tenants trashing your property, not paying rent and the ongoing cost of maintenance. Then commercial property may be of interest to you. However investing in commercial property is very different to investing in residential.
A large number of trusts established in recent times have been for ownership of property, whether the family home or investment property. In most cases these properties have loans secured by a mortgage. There are plenty of options when it comes to loans, mortgages and trusts and it is important you understand the implications of how yours is structured.
Here is a great post authored by a Property Tutors who I consider one of the very few ethical, professional and results drive mentors in New Zealand.