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From the editor THE CANTERBURY PROPERTY INVESTOR Contact CPIA Editorial vanessa cpia nz Advertising vanessa cpia nz Accounts office cpia nz Office 22 Buchan Street Sydenham PO Box 7382 Christchurch 8240 Phone 03 379 5251 visit www cpia nz Office hours are Monday Friday 10am 2pm CPIA is a member of the New Zealand Property Investors Federation Inc CPIA committee members 2016 2017 President Stephen East W e get a pretty good idea of what the current climate is like for investors by sitting at the CPIA office every day It s not unusual to hear tales of still ongoing EQC and insurance battles utter frustration at the building and resource consent process at Christchurch City Council banks holding back cash from property sales because of the LVR restrictions on investment and maintenance disasters Let s not even get started on the market saturation of rental properties in Christchurch now This is the other side of property investing that is unfortunately not portrayed in the media Now I m not going to call our media fake news because I m a journalist by trade and I know how rigorously facts are checked in the newsroom It s more about the chosen angle the narrative and story selection full stop But it would be nice for the public to see the other side of the coin from time to time The property investors that I have met during my first year at CPIA have all been down to earth practical people who have put an investment strategy in place to safeguard their future Some are wealthy and some are very wealthy Others are just getting by and really making sacrifices to get on and stay on the property ladder All of them work very hard sometimes doing jobs nobody wants to do So if nobody is going to blow our trumpet for us let s do it for ourselves property investors you do a stellar job You provide an essential service in difficult times and now more than ever it s important to stick together CPIA is working hard to bring you the best speakers with timely topics at our forums and I encourage you to come along early and spend some time getting to know other members We all know that it s not what you know it s who you know Networking is such an important part of our business We ve got an exciting year ahead with plenty of new ideas on how to support you our members and make sure that you re always informed up to date and prepared for whatever the market may bring Stay tuned Happy investing VANESSA O BRIEN EDITOR In this issue Vice president Michelle Fenton Lee 19 FIVE MINUTES WITH New property investor and CPIA member Michael Hawke Treasurer Vivien Cowey Secretary Jessica Kontze Special feature 17 MARKET PLACE Check out fellow CPIA members businesses Committee Pleayo Tovaranonte Helen Blanchard Graeme Smith Disclaimer and copyright The Canterbury Property Investors Association does not endorse any claims made in this publication and suggests readers obtain independent advice before acting on information or suggestions contained herein All original material in this magazine remains the property of the editor and cannot be reproduced in any way without permission from the editor As a magazine we accept advertising in good faith We trust the advertisements are not misleading and expect advertisers to provide good service We appreciate their advertising revenue and thank them for their support but we stress the Canterbury Property Investor does not endorse or guarantee the products or services of its advertisers From our sponsors 12 A1 PROPERTY MANAGERS 7 Tips for finding a good property manager 14 4 PRESIDENT S COMMENT CPIA president Stephen East writes about knowing your investment purpose 4 YOUNG KIWIS IN PROPERTY ACTIVE INVESTORS Pleayo Tovaranonte updates us on recent forums 5 TRAIL BLAZER CPIA member Sue McLaughlin aces car racing and property investment 6 OVERCOMING OBSTACLES IN BUSINESS Entrepreneur Danny de Hek shares his personal story 7 STICKING TO THE RULES Three strategies for property investment success 8 RENTAL PRICES The latest statistics on Christchurch house rental prices 11 SNAPPED Latest pics from our events 13 ARE YOU INSURED WELL ENOUGH We investigate house insurance pitfalls in Christchurch 14 EXPERT S CORNER Is short term accommodation an option for your rental property 18 UPCOMING EVENTS Forum times dates and details 18 BOOK REVIEW HAMMER THAT MORTGAGE How to pay off your mortgage faster 15 TONY MOUNCE MORTGAGES INSURANCE Welcome to CPIA s new principal sponsor 16 DUNS ACCOUNTANTS BUSINESS ADVICE Tax proof your short term rental accommodation LETTERS TO THE EDITOR We welcome your thoughts at Link If you have comment to make you are welcome to write to vanessa cpia nz Letters should be no more than 150 words and may be edited for spelling grammar and legal reasons Please supply your full name telephone number for our office s reference only and email address THE CANTERBURY PROPERTY INVESTOR LINK AUTUMN 2017 3

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Opinion President s comment T wo big issues face investors at present first is getting a change to the Osaki ruling so that landlords will again be able to take tenants to a tribunal and get a ruling in their favour with regards to damages caused by a tenant The second is new standards around meth testing the ability for landlords to self test and for it to be recognised by a tribunal Hopefully by the time you read this article both or at least one of these issues has been resolved With these and other government issues especially around the LVR life as an investor can be challenging Hence the need to know exactly why you as an individual are involved in property investing Without a good why it could be only too easy to look at other forms of investing Each person s reason to invest in property is different ranging from a hobby interest through to the creation of passive income But this reason or purpose needs to be strong in order for you to do what is required searching the papers and TradeMe for properties attending countless auctions dealing with tenants doing or arranging maintenance on properties all while your friends and family might be at the beach or relaxing at home Often this reason is not just about making money but about creating choices in your life and being able to make a difference to the people and areas of your life that are important to you Of course none of the above is a new revelation but we all need reminding about it on a regular basis Just as we eat every day through necessity we all need to remind ourselves and refocus on our why our reason purpose goal call it what you want And as has been repeated throughout the ages a written reason is more powerful than just an idea in your head Many years ago I had written down some things I wanted to achieve and buy in the future I was surprised when I came across that list more than 10 years after writing it and read that quite a few things on the list had in fact been achieved So don t underestimate the power of a written goal With your why in place you can than work back to establish just what type of property investing best suits your own skill set and the process by which you will go about achieving that As I have said in the past I believe property investors STEPHEN EAST are a resilient group PRESIDENT of people We all as individuals and as an organisation will be able to continue investing and circumnavigating any obstacles and road blocks that are placed in front of us with a good why in place Without a good why it could be only too easy to look at other forms of investing Young Kiwis in Property Active Investors A lot of people seemed to experience some apocalyptic events in the year 2016 but I am determined to believe that 2017 will be better for a lot of us There are many favourable factors to help us invest including the record low interest rates positive net migration a boost in the tourism market the council s new policy around urbanisation of the central city and anti immigration policies elsewhere around the globe As for us Young Kiwis in Property and Active Investors has had a great start this year We welcomed the first forum in February with our guest speaker Nicola Valentine co founder and CEO of PropertyPlot With her strong family background in property she has taken it to the next level by developing dashboard software and an analytic tool tailored to property investors searching for deals She described ways to source finance in the current economic climate imposed by new rules and restrictions She weighed pros and cons of second tier lenders Moreover she shared her personal investment journey and her most recent purchase a student accommodation in Riccarton which added to her solid and balanced portfolio 4 In April we will be fortunate to have Auckland Property Investors Association president Andrew Bruce as our guest speaker In March I invited the As Is Where Is dynamic duo Anthony Patrickson and Paul Szybiak to speak Both were featured in the December 2016 issue of the NZ Property Investor Magazine Ant has always been an opportunist The English literature graduate has been a shark fisherman an author and a freelance writer on his travels but Christchurch provided him with an amazing opportunity the As Is Where Is market With a personal focus on branding and marketing he launched a syndicate of 5 friends including Paul Szybiak with his background in the building industry in England and Australia The syndicate met once a week in a cafe and established Arete Property for repair THE CANTERBURY PROPERTY INVESTOR LINK AUTUMN 2017 PLEAYO TOVARANONTE renovation works transforming houses from earthquake damaged to liveable rentable and very saleable Ant and Paul now project manage and apply the lessons from their experiences Investing in real estate was the natural progression for them both and it was great to have the opportunity to hear their stories In April we will be fortunate to have Auckland Property Investors Association president Andrew Bruce as our guest speaker He will give us a presentation for the main forum as well as YKIP Active Investors where he will tell his stories about how he started out in the Auckland market and how his strategy changed as his portfolio developed He will give us an insight into how to move from residential to commercial investing why he decided to look at commercial as an investment option and the process he went through to develop a new motel See you at YKIP sometime soon

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Feature Navigating property investment and motorsport S ue McLaughlin had a brief moment of panic when she drove home from New Zealand Customs in Christchurch three years ago Her factory built 450hp Porsche 2012 GT3 cup car in a daring shade of yellow sat with customs inspectors while she sat alone with second thoughts about her big leap into motorsport Oh my god what have I done she laughed recalling the moment But I went home that night and I thought if I m going to do this I have to be committed That s the same for anything If you are going to go into business or buy a property you have to be committed to make it through Otherwise walk away from the beginning Sue is a CPIA member long term property investor motorsport driver and performance athlete who brings the same philosophy to every challenge she undertakes I guess I like to be creative and different I struggle with doing the same thing I always like to look at something and see if it s got a twist to it how it can be done differently and how it can be done better I never really accept the norm That s what got her into motorsport at 54 years old and into property investing more than two decades ago The more she races cars the more she sees cross overs in the lessons she has learned from them both Racing has taught me a lot about business and the importance of having a good team around you It is a tough sport and it teaches you mental toughness and resilience In a way it s like property investment you start off with one house then you go to another As you progress there s a new challenge you have to overcome Sue was introduced to property investment by her former partner They started out with residential rentals and lifestyle blocks then sold a few properties in their portfolio to focus on the emerging market of storage facilities They bought a 17 5 acre plot in Cashmere that was worse for wear through years of neglect and Sue sparked a vision to renovate the old house on the property and get 400 week rent for it People laughed That was a lot of money at the time But three months and a renovation later it rented within the first week and they were able to leverage further through the increased value They converted the old barns into storage rented out another flat on the property and farmed the remaining land Their property empire grew from there with plenty of lessons learned along the way From times of growth to times of loss chequered flags and pit stops it s been an endurance rally that s rattled her nerves at times but never conquered her determination Learning to overcome fear was important she said whether it was a business deal or putting her pedal to the metal and hitting the first corner at Ruapuna at 240kmph But that didn t mean things always went to plan Any business whether it s property investment or business you kind of think you ve done your due diligence and you ve got a pretty good idea but then a ball comes and side swipes you and it s like okay how do I deal with this And you just have to go through believe in yourself and believe that you re making the right decision Sue said a key to success in motorsport and property investment was to learn not to focus on your failures When you first start racing you may have a goal for the first corner and if you don t get it right it is easy to beat yourself up around the rest of the track Another driver once said to me If you keep looking in the rear vision mirror at your mistake you will not be focused on the corners coming up and miss those too It was the same in business she said You can t spend a moment focusing on stuff ups you ve made Look at things positively if they don t work out the way you planned Learn the lesson she said because it will save you from repeating it down the track The Christchurch earthquakes hit Sue hard and it s just now that she s finally been able to cash up some of her assets She s divested her portfolio down to one lifestyle block and a new house build in Waitakiri while she strategizes her next move She plans to reinvest in residential property but fancies putting her prime focus into commercial which will be a new challenge Still she s not planning on giving up the Porsche anytime soon She plans to tackle both professions with the same attitude that s gotten her through life so far feel the fear and do it anyway CPIA would like to thank our sponsors Principal sponsor Major sponsors Strategic sponsor If you are interested in sponsorship opportunities please contact office cpia nz or phone 03 379 5251 THE CANTERBURY PROPERTY INVESTOR LINK AUTUMN 2017 5

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Feature CPIA s February forum Danny de Hek I t would be fair to say that I wasn t born with a silver spoon in my mouth Frankly my parents may not have even have had a full set of cutlery That s how entrepreneur and founder of Elite6 Business Networking Danny de Hek kicked off his speaking session at CPIA s first forum of the year on 21 February What followed was a life story in overcoming obstacles and not letting difficulties stop you from achieving your dreams lessons that serve property investors well in the current industry climate Danny left school at 14 years old and never looked back He had struggled with dyslexia all his life and to this day he can t order the months of the year spell all the days of the week and recite the alphabet He has no idea what a noun or a verb is It even affects his pronunciation But for some reason Danny always had a burning desire to be a public speaker Today he is a self made business professional communicator networker and serial blog writer By having determination a will to succeed and a plan you can achieve anything you want he told CPIA members It s not a success story that came easy or without obstacles Without the basic three Rs under his belt reading writing and arithmetic Danny had to hone other skills He did some training in how to talk to people shake hands and look somebody in the eye with confidence Then he added plenty of chutzpah and set out to make his fortune It all started with a humble lawn mowing business He d knock on doors and offer to mow lawns for a good price Then he d ask to borrow their lawn mower By having determination a will to succeed and a plan you can achieve anything you want He became a demolition worker and a forklift driver which all went swimmingly well thanks to his work ethic But that all unravelled when they promoted him into an office job and he had to write down names and take orders over the phone He quit before he was fired His stepfather got him into the painting and decorating business which he stayed in for 7 years And one day he was given a digital diary and that changed his life He got hooked on technology and set out to learn all he could about it Then when he was painting at a nightclub on Worcester Boulevard 6 THE CANTERBURY PROPERTY INVESTOR LINK AUTUMN 2017 one day he found an un used side room and had a brilliant idea why not set up Christchurch s first internet caf That launched Danny into the emerging world of technology with digital cameras laptops websites and the world wide web Danny s way of telling his story gave the impression that he rode the new digital wave of technology like a grommet not quite knowing what he was doing and hanging on for dear life with moments of sheer glory He became the go to guy for internet set up and web development He snagged big names like Richard Hadley and Jason Gunn as his clients hired an assistant travelled the world for his work and turned over more than 500 000 in 2004 The guy that teachers had said was useless and would never amount to anything owned a big country house and fancy cars All because he put himself out there gave it a go and found ways to navigate the obstacles That s not the end of Danny s story He went through a messy divorce and ended up in a one bedroom flat by the railway in Rangiora going through a health crisis at the same time But he managed to hold onto his business and pull himself up again bit by bit He built a website for people going through separation launched get together groups for other separated people joined toast masters and went to book writing seminars And he started to network like never before His top tip If you want to do well in life get around people who are doing well Danny now describes himself as in the full time business of building relationships and connecting the right people with the right people Whatever business you are in property investment included his advice is to be proactive and not wait for opportunities to come to you Get involved Go out and do something Everyone has value to add give them some of your value 2016 2017 CPIA membership statistics February 529 December January 539 November 545 October 544 September 540 August 528 July 518 June 527

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Feature Sticking to the rules Strategies for success By Paul Dykes P roperty investment author and public speaker Hadar Orkibi has built an impressive property portfolio in 13 years and is still looking for investments He outlined his three main strategies to the Waikato Property Investors Association recently Buy and hold trade for cash flow and to reduce debt and joint venture for both Having started investing in Christchurch he is now firmly focused on the Auckland property market although he still lives in Alexandra His buy and hold rules are simple you make your money when you buy The property must have at least 15 equity upside at purchase with an added value opportunity He is interested in properties in the main areas only with good capital growth prospects and strong tenant demand Furthermore the yield must be a minimum 7 depending on locations preferably with more than one income stream from each property Hadar gave examples of various purchases he had made and explained how he went about increasing the equity in each of them In some cases he re concreted the driveway and he often spends up to 16 000 to re coat tile roofing One block of four flats he purchased sight unseen for 870 000 through an Auckland agent he had used before was subsequently separated into four unit titles All up he spent 120 000 on this and a general upgrade to lift the value of the site to 1 340 000 He eventually sold the site later for 1 891 000 a profit of 900 000 in three years His next major project was a block of shops in Alexandra purchased partly to provide a caf site for his wife s Mediterranean cooking He renegotiated the rents based on five to seven year leases adding in a two year rent review and gained resource consent for a billboard that now brings in additional income He likes the idea that there is scope to build a second storey at some stage and increase the rent over time to increase the value Further projects in Christchurch and Auckland repeated the formula improvements or total redevelopment increased the equity quickly In one example he removed a house to build six townhouses He says he learned lessons along the way First be aware of the property cycle It is important to get the timing right He offloads under performing assets and sticks to high growth areas Hadar s property trading rules are also set in stone He says he trades for cash flow and to reduce debt I always do property staging when I m selling It makes the property more appealing and costs between 1 500 and 3 000 a time His third strategy joint ventures JVs was developed in response to a funding log jam He had been funding his trades through a line of credit but became leverage locked I got stuck I enjoy finding the deals it gives me a buzz but the money wasn t there He believes property investors who team up in JVs put themselves in a stronger position Use one person s strength to offset the other s weakness This enables all parties to pursue their financial and or real estate goals He carries out due diligence on the deal and the partner and makes sure there is an exit strategy Professional legal advice should be obtained before entering an agreement and setting up the ownership structure JVs or new builds are great for novices who have low or no equity says Hadar Get your ducks in a row Hadar Orkibi says the way he finds great deals is by preparing thoroughly He determines how much he can afford to pay and obtains a pre approval from a lender He tries to become an area expert monitoring sales and listings on TradeMe and gets to know the values in the area He establishes good relationships with real estate agents I always do what I say I m going to do don t waste their time He also uses private advertising and his website www webuyproperty co nz and employs someone to door knock at suitable houses in the area This brings in 10 15 leads a week says Hadar and those he cannot handle he passes on to a JV partner at Property Ventures He also spends about 4000 a month advertising online Source UP the Ultimate Property magazine His buy and hold rules are simple you make your money when you buy My buying rules are that the property must have at least 15 equity upside at purchase with an added value opportunity for non structural work that can be completed within four months The locations must have good demand from home buyers school zone employment first home buyers etc The structural or subdivisions projects must have at least 15 20 rate of return He targets projects that can deliver this rate of return within 6 12 or 18 months THE CANTERBURY PROPERTY INVESTOR LINK AUTUMN 2017 7

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Market watch Rental prices The following market rents table is derived solely from information gathered from bonds lodged through the Ministry of Business Innovation and Employment It has been adapted from its website www tenancy govt nz The figures supplied are based on houses not flats or apartments They cover the 6 month period from 1 July 2016 31 December 2016 Suburb Redcliffs Sumner Addington Aranui Bromley Bexley Avon Loop East Christchurch Avonhead Yaldhurst Bedrooms Rental price range 2 360 429 3 400 500 Suburb Bedrooms Rental price range Merivale St Albans West 2 345 400 3 420 532 2 330 395 North Beach New Brighton 2 305 350 3 390 450 South Shore 3 350 420 2 300 330 Redcliffs Sumner 2 360 429 3 349 395 3 400 500 2 350 400 2 340 386 3 390 480 3 380 475 2 315 365 3 370 415 2 330 380 3 370 425 2 333 376 Riccarton 2 340 375 3 405 462 2 350 398 3 390 442 Burnside Harewood 2 353 391 Sawyers Arms Northcote 3 400 450 Belfast 3 385 440 Burwood Dallington Avondale 2 303 350 Sockburn Upper Riccarton 2 350 380 3 365 410 3 385 450 Christchurch Central Hagley 2 333 438 Spreydon Somerfield 2 326 387 3 440 527 3 380 448 Fendalton Strowan Bryndwr 2 377 435 St Albans East Edgeware 2 330 385 3 400 500 3 400 490 Halswell Wigrim 2 352 417 St Albans North Mairehau 2 350 453 3 435 485 3 380 470 Hillmorton Hoon Hay 2 330 390 St Martins Beckenham 2 350 382 3 395 450 Huntsbury 3 400 467 2 337 382 Styx Parklands 2 318 350 3 395 430 3 378 450 Bishopdale Papanui Hornby Islington Hei Hei Ilam Westburn Linwood Phillipstown Marshland Redwood 2 339 395 3 400 450 Richmond Avonside Richmond Shirley Sydenham Waltham 2 340 395 3 382 450 2 283 361 Westmoreland Cashmere 2 370 400 3 367 425 Barrington 3 390 485 2 310 365 Woolston Opawa 2 300 349 3 385 450 3 360 420 CALL NOW 0800 367 868 Email info totalfloorcare co nz totalfloorcare co nz Like us on Facebook Cleaning Services Maintenance Tile Grout Carpet Upholstery Hard Floors Driveways Patios Decks We specialise in end of tenancy cleaning Rentals rebuilds renovations Professional owner operator industry trained and certified technician fully insured police checked 100 money back guarantee

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Facts figures Breaking down the meth numbers 75 1 5 0 5 The percentage of landlords not aware of the draft national standard for testing and decontamination of properties polluted by methamphetamine The research was conducted for Crockers property company The suggested level of micrograms per 100 square centimetres for living spaces under option A of the new draft standards The suggested level of micrograms per 100 square centimetres where contamination is caused by lab activity under option B 46 The percentage of the same investors who said that meth was becoming more of a problem in rental properties 1 5 The suggested level of micrograms per 100 square centimetres for carpeted properties under option B 3 4 The suggested level of micrograms per 100 square centimetres for roof and crawl spaces under option A 2 0 The suggested level of micrograms per 100 square centimetres for noncarpeted properties under option B P use and manufacture is a reality in Canterbury More than 30 of properties we sample show meth present I magine unpacking your boxes in your new home only to have the neighbours pop around and ask you if you were aware of the Police raid that took place a year or so ago Then imagine how you would feel having to move out gut the house and demolish the minor dwelling you paid top dollar for because a lab test showed it was full of meth Imagine paying top dollar for your new home only to find that the instant answer test kits the real estate agents commissioned that were reported as negative had missed high levels of meth that leave you with a 30K clean up bill Imagine being the real estate agent that sold this property Imagine going to sell your rental that has been professionally managed for years only to be told that it is full of meth and it is now worth tens of thousands less than you were expecting seriously compromising your hopes and dreams At MethSolutions we don t need to imagine these scenarios We have helped people through them all Too many decent people get caught out by meth because either they or the people they choose to work with don t understand the risk and or poor quality approaches to testing As New Zealand s only proactive MethRisk Management business we work with home owners buyers and real estate professionals to help people understand and manage the problems P can cause Part of that means using lab based testing When decent people work together the harm meth causes is reduced Know what you are buying and protect what you own See our latest Meth Map to find how many positive tests we found in your region Visit www methsolutions co nz meth in new zealand Imagine getting an instant answer kit off the internet using it yourself to save money and getting a negative only to have your new tenant get a lab based test and find your rental is full of meth How much meth contamination are you happy to buy Avoid problems by using the highest quality not the most expensive meth testing available in New Zealand www methsolutions co nz 0800 638 4522 THE CANTERBURY PROPERTY INVESTOR LINK AUTUMN 2017 9

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CPIA team Snapped CPIA February forum CPIA s February forum was a glimpse into the world of successful networking through the eyes of entrepreneur and networking master Danny de Hek It was an informative and insightful evening with touches of humour Read all about it on page 6 Snapped at CPIA s February forum were CLOCKWISE from TOP LEFT Teresa Crequer Alison Clark Val Williams Andrew Frost Graeme Cook Donald Arthur David Clarkson Sarah Webb Leon Wallwark Danny Chhour Kelly Peung Tosh Prodanov David Calder Quote me on that We ve got enough leases signed we ve got bank funding in place and it s all go CHRISTCHURCH DEVELOPER ANTONY GOUGH ON THE TERRACE HIS 140 MILLION CENTRAL CITY HOSPITALITY AND OFFICE PRECINCT SET TO OPEN IN OCTOBER AFTER YEARS OF STOPS AND STARTS OVER FUNDING AND LEASING TROUBLES Common sense has prevailed MANAWATU LANDLORD DAVID RUSS ON WINNING A COURT CASE AGAINST THE TENANCY TRIBUNAL WHICH SAID HIS TENANT WAS NOT LIABLE FOR DAMAGE CAUSED BY HER DOGS URINATING THROUGHOUT THE FOXTON HOUSE SHE RENTED HE WAS AWARDED 3790 BY THE PALMERSTON NORTH DISTRICT COURT I wouldn t call it a crisis We have strong demand we have an uplift in prices these are good problems to have actually PRIME MINISTER BILL ENGLISH ARGUED THAT DEMAND FOR EMERGENCY GRANTS WAS NOT A SIGN OF A HOUSING CRISIS We think most tenants are great but there are people who damage houses and don t pay rent TINZ CO DIRECTOR IAN BAKER ON WHY A PROPOSED BAD TENANT DATABASE WAS A GOOD IDEA We won t be able to sell it for what we owe on it so we ve lost all the equity in the house and at this point of time we re facing bankruptcy A BLENHEIM COUPLE WHO WISHED TO REMAIN ANONYMOUS ON THE DAMAGE A TENANT S METH USE CAUSED THEIR PROPERTY Recent CoreLogic data shows that flipping or rapid on selling of houses is not as common as people may believe NZ PROPERTY INVESTORS FEDERATION EXECUTIVE OFFICER ANDREW KING ARGUES THAT THE BRIGHTLINE TEST IS SUCCESSFULLY CULLING SPECULATION I ve got some properties sitting for a month but the owner is still adamant they don t want the rent to drop The properties are also in areas where there might be 100 similar properties RAY WHITE SHELLEYS PROPERTY MANAGEMENT DIRECTOR SHELLEY SCOTT ON WHY CHRISTCHURCH LANDLORDS NEED TO BE REALISTIC IN A TENANTS MARKET THE CANTERBURY PROPERTY INVESTOR LINK AUTUMN 2017 11

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Advertorial 7 Tips to find a good property manager F inding someone to manage your investment is a big decision so you need to do your research before choosing one Look for someone who is organised honest and has actual experience Here are seven tips to help you find the best fit for your property 1 Get referrals from different sources Talk to friends family colleagues and other property owners in your area You may be able to find some great tried and trusted options Find out what they were happy with and not happy with Referrals can be biased this is why it is important to get them from different sources 2 Do an online search for property managers Check out their website and any online reviews blogs and social media pages You may come across some of the same companies you found through referrals 3 Check out their current work Look at some of their current rental ads Are they professional and compelling Do they 12 advertise in a variety of places Are the properties clean and well cared for You can get some great information from talking to the tenants they currently manage because property management is about keeping you and your tenants happy Ask to see an example of the monthly report you would receive 4 Interview several property managers Compare them to find the one you are most comfortable trusting your property with You will be able to tell those with real knowledge and a proven plan from those without Ask questions about their education and experience services provided fees charged and if they have an understanding of the Residential Tenancies Act 5 Check that they belong to a supporting organisation in the industry This means an independent Property Managers Association that encourages and promotes ethical conduct by its members deals with complaints and promotes and lobbies for law reform when necessary THE CANTERBURY PROPERTY INVESTOR LINK AUTUMN 2017 CLAIRE WILSON A1 PROPERTY MANAGERS 6 Examine their management agreement This should clearly define the responsibility of the property manager and that of the property owner Carefully check the sections on services provided extra fees charged responsibilities of the owner and reasons for cancellation 7 Invest in property themselves It is important that your property manager understands the reasons why and how to invest in property if they are to manage your property as if it were their own They can often support your investment growth with their knowledge and experience in the market

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Page tag xxxxx Insurance cracks the potential gaps in your house policy The Christchurch earthquakes have left us with tricky insurance issues CPIA talked with Bob McClymont from Vision Insurance about how to avoid potential policy cracks when insuring your Christchurch properties COMPARE POLICIES It s tempting to stick with the company you have always insured with and sometimes there is no option to change but it pays to compare policies across companies and not just in terms of cost A lot of policies are similar in the cover they provide Bob said But there are some technical differences Those differences often came down to what insurance companies covered in the event that extensive repairs or a rebuild was necessary demolition and the removal of debris professional services like architects and engineers building consents and inflation costs over the period of the build Some companies include those costs in the total sum insured and others cover it separately Really the client has to read the policy wording if they re concerned That s the main thing to do said Bob The other important feature for landlords to check and compare was meth damage coverage DON T UNDERINSURE It was normal before the Christchurch earthquakes for policies to cover the whole cost to rebuild your house Now you must nominate a sum insured and you re going to be seriously out of pocket if you are underinsured and need to claim Bob recommended obtaining a registered valuation but said some insurers would also accept a builder or quantity surveyor s report Many insurance companies also have a sum insured calculator on their websites but they can only calculate based on an average house in an average suburb Bob recommended adding 25 onto that figure It s wise for property investors to regularly check that their sum insured figures were upto date DUE DILIGENCE It s tempting to snap up that bargain Christchurch property but buyer beware The days of insuring a house over the telephone are over Bob said You have to fill out a proposal form then if it s pre 1935 built you must complete another form stating the standard of wiring plumbing and if the walls have been relined Then there s the earthquake damage form where you must declare any damage the property sustained whether it was structural how it has been repaired and proof that it s to code It was possible to obtain indemnity insurance for houses with incomplete repairs but it didn t come cheaply sometimes four times the cost of normal premiums and the onus was on the client to prove any damage sustained after purchase was not pre existing Any house purchase required thorough investigation to assess any insurance risks REPUTABLE INSURER Check the Standard Poors rating for the insurers you are considering and use a broker to get independent advice A broker will also represent your case to your insurer in the case of a claim THE CANTERBURY PROPERTY INVESTOR LINK AUTUMN 2017 13

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Expert s corner Should I use my rental home as short stay housing There s nothing like the appeal of a quick buck to turn the public s mind to a new idea A fter the earthquakes in Christchurch many homeowners decided money was to be made by renting their homes out to those needing temporary housing while getting earthquake repairs Great sums were bandied about as it seemed the insurance companies and EQC would pay any amount for accommodation Like all good urban myths there was a tiny nugget of truth and a lot of exaggeration So six years on is there any market for short stay housing I ve heard plenty of opinions but usually not from anyone working in the field so here is a market view from my experience 1 Short stay housing and residential rental housing don t follow the same market rules and often when one is down the other can be up As has been well reported the tenancy rental market over the past 12 months or so has been flat or declining While Christchurch is experiencing job growth and plenty of activity in the building sectors the number of homes available has remained static for quite a while pushing real rental prices down However there is no data on the number of homes and units available for short stay accommodation apart from anecdotally or a quick scan through TradeMe Motel and hotel rooms will factor in demand and there are certainly some new motels opening that are now picking up the one and two night tourist market and the market needs of smaller conferences 2 How do you know if short stay housing is still required in Christchurch The first matter to consider is what is happening with immigration Over the past few years New Zealand has seen a turnaround from a deficit to now very strong net migration of more than 70 000 to the end of October 2016 While we know this is impacting on housing shortages elsewhere in the country 14 tourism growth is such that Christchurch Airport is building a new Novotel at present to cover the very short stay between flights market particularly Auckland the immediate need in Christchurch is to provide homes for those workers and families who see Christchurch as a great employment opportunity These are the people who don t want or can t get accepted for a 12 month tenancy as they don t have any local rental or credit history Some of these workers are here for a fixed period so also prefer furnished accommodation that feels like a home rather than a motel or fully stocking a house for only three months or so The second influence is the tourism market Christchurch certainly suffered from being bypassed by tourists for the first two years too many empty sites too much disruption not enough to do That is now changing and THE CANTERBURY PROPERTY INVESTOR LINK AUTUMN 2017 tourists are better catered for within the central city Backpacker hostels are more heavily booked and tourism growth is such that Christchurch Airport is building a new Novotel at present to cover the very short stay between flights market To balance that there has been a nationwide increase in the number of selfdrive tourists leaving aside the concerns around that This cohort was previously taken on tour buses with motel bookings However the desire to be independent extends to where they stay longer bookings with more demand for self catering homes The third influence is still the earthquake repair market Some people are now on their third or fourth repair and although the numbers aren t large the time required for stays can be three or four months for the re do of a repair Where a repair has now become a rebuild it can be a year before these customers can move back home In the meantime their accommodation is paid for While offering short stay housing doesn t suit everyone s tastes if you have the right home in the right area knowledge of the market and the ability to assess legitimate customers there is still a need to be met By Kim Willem

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Advertorial Introducing Tony Mounce and his team trusted advisers in finance and insurance I t s a pleasure to be involved with the Canterbury Property Investors Association again this time as principal sponsor Many of you will have seen my previous articles and it s great to be given this opportunity again I set up Tony Mounce Mortgages Insurance in 2009 out of a desire to continue helping people set financial goals and build protection against unforeseen circumstances after 34 years in personal and business banking with BNZ We now have a highly skilled team of 21 advisers and support staff with vast experience in banking housing investment commercial and farming The Tony Mounce team in addition to guiding first home buyers and general home buyers specialise in advising property investors and assisting with futureproofing for risk via provision of sensible affordable insurance products To elaborate on that point our business is approximately 50 per cent investor and we provide our service to clients throughout CANTERBURY PROPERTY INVESTORS SPECIALS New Zealand and internationally Many of our clients recognise that in order to prepare their lifetime financial security one of the longer term methods to achieve steady creation of wealth is property investment Tony Mounce Mortgages Insurance is one of the largest broker firms in the South Island Accordingly we have access to a wide range of products in order to offer our clients the best finance and insurance solutions We are proud of the fact that we have arrangements with every major retail bank and commercial lender in the country Our business is built around values that guide and educate our clients in finance techniques and investment strategies In short we pride ourselves as being trusted advisers owing to the collective experience of our team members The past 5 years have thrown up many hurdles following the earthquakes and then in the past 9 months changes to the LVR arrangements have further clouded the mix especially as the new rules are still TONY MOUNCE TONY MOUNCE MORTGAGES INSURANCE moving goalposts Our business specialises in problem solving in this environment and our relationships with banks allow us to develop strategies and solutions I am constantly reminded of the quality of people in our organisation as I hear the bubbling enthusiasm when our team are able to find a way through obstacles One of our advisers just this week commented that in her approach to clients she remembers having been a property manager and investor and how much she didn t know when she was breaking into property investment Her solution is through patience and careful explanation of the options available to the investor for their specific circumstances as well as the outcomes of our current regulatory and economic climate That s the Tony Mounce way GET THE BEST PRICE ON CARPET AND VINYL At Harrisons Carpet you ll always get the best advice from your locally owned and operated Harrisons expert Christina Gardner Why Harrisons It s easy Christina is mobile so she ll come to you Quick turnaround from measure to installation Huge range of the latest carpets and vinyls to suit all decors and budgets Free designer colour and style advice Finance options available Q Card GEM Visa See website for details Conditions apply BEST PRICE PROMISE Christina Gardner Owner Harrisons Carpet Christchurch Central FOR A FREE IN HOME CONSULTATION 027 375 9927 chchcentral hah co nz See you at your place TM THE CANTERBURY PROPERTY INVESTOR LINK AUTUMN 2017 15

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Advertorial Are you a short term accommodation provider and know your tax implications N ew Zealand s tax laws require that income earned in a business that is carried on for profit is subject to tax Income earned by providing short term accommodation through a peer to peer service is no exception Further to this you also need to be aware short term rentals may require you to register for GST Most common issues include GST registration is mandatory when GST supplies exceed or are expected to exceed 60 000 GST must be returned on gross rents and claimed on commission paid You may be entitled to make a second hand goods claim for costs incurred to date The biggest GST impact is when you sell This could see you paying 15 GST on the capital gain made on the property Warning Inland Revenue and local government bodies are paying attention In recent years Inland Revenue has been focusing on taxing New Zealand s black economy which is made up in part by taxpayers providing short term accommodation Using an online platform to arrange short term accommodation generates readily accessible electronic records Providing short term accommodation potentially exposes you as an investor to a variety of different taxes As a property investor Duns can work with you through the relevant tax legislation that applies to you so you are fully aware of the tax implications before committing yourself As a major sponsor of the CPIA Duns are here to support members To find out how we can help you contact Aaron Cassidy aaronc duns co nz AARON CASSIDY DUNS ACCOUNTANTS Facts figures Six years on from the 21 February 2011 Christchurch earthquake The Crown bought more than 8000 properties on severely damaged land The core costs to the Crown of the Canterbury recovery are more than 9 2 billion If you include EQC that figure tops 17 billion EQC has completed almost 70 000 repairs The 2 7 billion programme to repair Christchurch s underground pipes and roads is almost complete The Government has invested 6 million on seismic strengthening of state integrated schools in greater Christchurch Aaron loves to talk property A n o r a A ssidy Ca or DireCt That s why we are proud to appoint him as a Director at Duns Aaron s service to clients is exceptional and reflects the way we do things at Duns The Property industry is one area that Aaron excels in That s because Be it your first or an he cares To him it s personal With addition to your relevant innovative solutions Aaron investment portfolio helps his clients realise their goals Duns can provide goes that extra mile to know your business dedicated to helping you get the best possible outcome Anna and Vance Danholt Danholt Properties Ltd For a no obligation chat and to find out how Aaron and Duns means business contact him at aaronc duns co nz or phone 027 514 9358 bespoke portfolio structures to meet and future proof your investment goals understanding which gives you the confidence that your property investment makes financial sense an effective partnership in the planning of your property portfolio Setting goals that will move you forward maximising opportunities as they arise solutions to simplify all your tax matters attention to any tax planning and restructuring to minimise the tax you pay each year www duns co nz DUN0135 A ent m t n i o pp

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What s on Calendar of events Upcoming forums CPIA forums are free for CPIA members There is a 25 door charge for non members All welcome April Date 18 April 7pm doors open 7 30pm start Speaker s Auckland Property Investors Association president Andrew Bruce Topic Personal property journey Location Helen Kitson Function Centre Rangi Ruru 59 Hewitts Road Merivale Christchurch May Date 16 May 7pm doors open 7 30pm start Speaker s Tenancy Tribunal principal adjudicator Melissa Poole Topic Liability cases of Tenant vs Landlord New members Topic Central city revitalisation and investment opportunities Location The Atrium 455 Hagley Avenue The Netball Centre Hagley Park Christchurch APIA president Andrew Bruce Location The Atrium 455 Hagley Avenue The Netball Centre Hagley Park Christchurch June Date 20 June 7pm doors open 7 30pm start Speaker s Rebuild Christchurch founder and city councillor Deon Swiggs Young kiwis in Property Active Investors Bookings are required for these events due to number limitations Please email office cpia nz to reserve your place These forums are free for CPIA members and there is a 15 door charge for non members April Date 19 April 7pm doors open 7 30pm start Speaker s APIA president Andrew Bruce experienced residential and commercial property investor Topic Moving from residential to commercial investing Location CPIA 22 Buchan Street Sydenham Christchurch May Date 24 May 7pm doors open 7 30pm start Speaker s Steve Brooks property investor and founder of My Refund My Body My Will etc Topic Steve will talk about his personal business story Location CPIA 22 Buchan Street Sydenham Christchurch June Date 28 June 7pm doors open 7 30pm start Speaker s TBC Topic TBC Location CPIA 22 Buchan Street Sydenham Christchurch Please note event speakers or topics change occasionally Visit www cpia nz to check for up tothe minute information Welcome to our new CPIA members who have joined over the last quarter Mike Coom Courtney Wilson Mike Gregan Kelly Carl Robinson John Milne Hayden Teresa Baird Derek Tanya Drake John Miles Makesh de Silva Darryn Hopkins Emma Cunliffe Peter Leone Ross Carina Zheng Beth Hamilton Grant Muir Michael Kate Hawke Ian Porteous Book review HAMMER THAT MORTGAGE How to knock hundreds of thousands of dollars off your mortgage and in Hammer That Mortgage David explains in simple language how anyone can repay a mortgage much faster than the typical 30 year term This latest edition of the popular book first released in 2012 has been updated to reflect current interest rates and includes three new chapters Saving a deposit KiwiSaver Welcome Home Loan and HomeStart grant and Financial behaviour Repaying your mortgage faster has just got a whole lot easier Hammer That Mortgage is packed full of tips and tricks for repaying your mortgage quickly It s easy to read with short punchy chapters that will leave you asking why didn t someone tell me this years ago Owning your own home is the quintessential kiwi dream but it s a dream that comes with the burden of hundreds of thousands of dollars in interest taking decades for most people to repay Hammer That Mortgage by David Tillman David explains in simple language how anyone can repay a mortgage much faster than the typical 30 year term 18 reveals the secrets that helped him repay his mortgage in just five years and is a wealth of simple yet effective ideas that can save a small fortune for kiwi home owners David started his working life in the banking industry and says that even though I worked in a bank I didn t really know that much about making money and paying mortgages off faster Those lessons came later when I decided I wanted more out of life than working in a bank could offer To repay his mortgage in just five years was a hugely audacious goal but he pulled it off THE CANTERBURY PROPERTY INVESTOR LINK AUTUMN 2017 Hammer that Mortgage will be released on 27 February by Mortgage Freedom NZ Ltd RRP 29 99 About the author David Tillman lives in Christchurch and works as a business coach and mentor drawing on his many years as a business owner David writes engages in public speaking and is a keen investor He s written many articles for CPIA in the past Giveaway We ve got a copy of Hammer that Mortgage to giveaway To enter email Hammer that Mortgage to vanessa cpia nz before 28 April

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New member profile Five minutes with Michael Hawke T hirty five year old Michael Hawke is a new CPIA member and a new property investor who focuses on the Ashburton market He spent 8 years working in mines in Africa Australia and Kazakhstan and returned to New Zealand in 2015 He s a sparky by trade and works part time while he focuses on growing his property portfolio Q How did you get into property investment A After returning from overseas I was looking to invest in property for cashflow following some research I felt I needed to diversify instead of having too much tied up in shares Q Recent acquisitions A I bought a big section in Ashburton subdivided and relocated a house onto it the house came from the Christchurch Red Zone I own one property in a joint venture a big old house on a 1626sqm section in an excellent location which will be demolished in the not too distant future to make way for four new townhouses giving us two each to keep for long term buy hold Matthew Gilligan Kieran Trass Get a good overview of different investment strategies Q Why did you Q Next acquisition A I probably would have join CPIA A I needed to bought something last week had my accountant not been on holiday My next purchase will be within the next 3 6 months All my investments are in Ashburton network and get ideas I do bounce ideas off my mates but we have not got a lot of history between us I need to network with people who have several property cycles behind them Q What s the biggest challenge A The new LVR limits I am a conservative Q Best experience as a landlord A I take pride in the properties I present I investor My LVR is 40 per cent and I want to keep it there am fussy and don t expect tenants to live in a house I wouldn t I use weed mat I stain fences and plants shrubs to make things tidy and low maintenance Q Advice for newbies A Read more books Graham Fowler Informaton Support Insights Become a member Informaton Support Insights First name Last name First name Last name Home phone Mobile phone Mailing address Paid by cheque Conferences and expos Newsletters and updates Quarterly Link magazine subscription Email Post code Monthly seminars Monthly Property Investor subscription Resources Exclusive trade discounts Industry representation Recommended by Or internet banking Internet banking to account 02 0828 0101338 083 Subscription 250pa application fee 25 total 275 Please send completed form and cheque to CPIA PO Box 7382 Sydenham Christchurch 8240 or email to office cpia nz Visa and Mastercard payments are accepted online only visit our membership page www cpia nz Informaton Support

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