Apr 2, 2022 | The facts, Updates
Here’s our top four strategies to combat the rise of interest rates and help to protect your assets:
- Stagger you lending – if you break your loans down into several smaller loans, this will help to spread your risk over time, and hopefully average out your interest rates in the long run.
No one can predict the future, however if you split your loan into several smaller loans and stagger them to shorter and longer term fixed loans you will have both the benefit of the usually lower interest rates for a shorter period and the benefit of security over a longer period. Your interest rate over the period of your loan will be the average of the longer and shorter rates over time. A very simple example is as follows: $1m loan split into five $200K smaller loans. If the rates were 1 year @ 2%, 2 years @ 3%, 3 years @4%, 4 years @5% and 5 years at 6%. For this example, we assume that over the 5 years interest rates remain consistent. This would mean that over the course of the years, your rate would average out to be 4% with the added security of having some funds locked in.
- Reduce your lending (duh!),
This probably doesn’t need much explanation. If you can put aside an extra $100 per week, this will be an extra $5k per year of the loan amount. Over a 30 year loan that’s $156k and a lot of saving on your interest.
- Diversify your portfolio with respect to the bright-line rule, interest deduction allowances, and of course your personal circumstances
You can sell off the elements of your portfolio that are not tax efficient and replace them by purchasing one that are for example if you have older properties that are heavily geared, in 2024 you will not be able to claim interest as a tax deductible allowance. If you are in this situation, you could look to sell this property and buy a new build where interest can be deducted before tax, This is one to discuss with you accountant or financial advisor, as there are a lot of rules that you must take into account when looking into this.
- Utilise revolving facilities and interest only loans.
Again one to be discussed with a financial advisor or mortgage broker. If you need to speak to one, please get in touch, as we work with excellent partners who will be able to help as this is about structuring your loan. For example if you currently have $1m loan on interest and principle because you want to pay off your loan, another way of achieving the same goal is to have (say) $900K on interest only and $100K on a revolving facility which you can pay into whenever you choose to. So you could aim to pay $20K of this off each year for 5 years. The benefit is that you can also draw on these funds when you need. Another benefit is that some banks don’t take revolving facilities into account when calculating servicing.
Disclaimer: The information above is not financial advise and should not be taken as such. For professional financial advice, you must speak to a qualified financial advisor. Please contact us if you would like us to put you in contact with one of our specialist partners.
Mar 30, 2022 | Awards
We mapped out all 27 of our regular business processes and one by one we are looking at how we can improve each one. Which technologies are available, when efficiencies can be made and where we can offer more sustainable/environmentally friendly solutions. The first one we looked at was our tenant finding process. How to give both property owners, existing tenants and prospective tenants “the greatest rental experience in NZ”. Here’s a brief look at the changes we made;
- Property Readiness – Work it, work it…
We work with the existing occupants (either owner/tenants) to ensure that the property is “ready”, decluttered and we also have a small amount of props (throws, plants, jugs, towels and fruit) to add some flair and colour.
- Adverts – Attract interest early
Our adverts give prospective tenants enough information about the property to be confident enough to apply in advance of the viewing (not mandatory of course).
- We stand-out – We use our own template frame with a logo in order to stand out from other adverts
- We only use professional photography
- We have embraced technology and have a 3D walkthrough on all listings (where permission is granted) in order to showcase the property.
- Viewing – Get close and personal
All attendees interested must book in for one of our twice weekly viewings and we keep in touch. They receives a links, texts and phone call reminder to attend and meet us! During the small viewing we CHAT. We establish who would like to proceed quickly. By using our 2 person team structure coupled with evening working it means the PM can be at the viewing and whilst their partner at the office will following-up and starting to process applications for the interested parties. All this can happen within 30 minutes of the viewing and it does!
- Instant Feedback – Faster approvals
Contact with the property owner enables faster approvals. After every viewing, from the viewing, the owner receives a video about how the viewing went and when to expect completed applications.
- Strategic Planning – As per the plan!
At the end of each week, we have a quick report that summarises the week of the campaign and identifies the pre-agreed strategy for the following week for the owner. We have a 4-week strategic plan for every listing (which aligns with a tenant’s notice period). The customised plan includes changes, tweaks and incentives to keep the campaign hot!
We’re so happy that this simple but effective idea has been recognised and as such we are proud to have been announced amongst the finalists in the 2022 Westpac Awards for Excellence in Innovation.
Mar 16, 2022 | Updates
How will this change what we do for you? It won’t actually change much at all, we were already self-regulating many of the things that are very likely to be be put in place industry-wide. Here’s are some insights as to what property management may look like post regulation…
- Gain a license to practice – Hurrah!
- Be trained and qualified (all our PM team are fully trained to NZQA level)
- Follow a professional code of conduct (we’re already registered with REINZ)
- Have insurance (we have always operated with insurance)
- Have a separate client trust account (yes, of course, we already have this)
- Have accounts independently audited (we already do this annually)
There will also be a formal, independent complaints process in place – Hurrah!
So in a nutshell, we whole-heartedly welcome the changes for the industry and really hope it means we will start to see fewer of those unscrupulous PMs on the scene. For TRB however, we’ll just continue doing what we have always done to give you the best rental experience. Rest assured – you are in good hands.
Nov 25, 2021 | What you need to know
We’re leading the way in Healthy Homes Compliance. We have 90% of our clients either fully compliant or awaiting jobs to be completed to be compliant. We are committed to achieve 92% compliance by March 31st
This means our tenant clients are feeling the full benefit of this legislation early. It also means our owners are not at risk of non-compliance. It means that our properties are of a higher standard and more desirable when in becomes time to re-tenant them. We think all of this hard work is paying off and it’s another WIN-WIN-WIN for us!
Oct 20, 2021 | Let's do this
Any new tenancies or renewed tenancies that commenced after 1st July 2021 have 90 days to become fully compliant for Healthy Homes. For properties that are brand new to the rental market, owners had to obtain a healthy homes assessment, obtain the quotes required to become compliant and then book the contractors in to do the work. In a 3 month timeline, this is already a challenge for some, however throwing a 5 week L4 lockdown into the mix made it almost an impossible tasks for property owners.
We hope that the Government listens to the wise words from Joanne Rae – Head of Property Management at REINZ and applies the same logic to our industry as to the car industry by extending Healthy Homes compliance just as they extended the WOF compliance.
The Article
