What about tomorrow?

It’s easy in theory but there is nothing easy about thinking about what you need to do to protect your future lifestyle. Firstly, you have to actually think ‘I need to think about it’. Then get over your trained put off thoughts ‘I’ll worry about it tomorrow when I’ve got a mo.’

Sad news – tomorrow does come and it can arrive a lot quicker than you had hoped and buying a Lotto ticket game plan just doesn’t work.

Our young couple, Timbeldon and Audie, in their early 30’s are at the point in their lives where they are starting to wonder what to do; put some money away into a retirement fund or invest in some sort of asset.

There are lots of options to choose from and they will seek advice from experts in the various fields.

Let’s listen in on their journey investing in property, there might be a tip or two there.

Timbeldon: “You know Geoff at work – he was talking today about investing his money in something so he’s got money when he’s older. Got me thinking … “

Audie: “Sounds like a great idea but I wouldn’t have a clue where to start “

Timbeldon: “He was talking about rental property, what do you think about buying a rental?”

Audie: “The ad on TV said it’s a good time, it’s a buyer’s market”

Timbeldon: “What’s that mean?”

With any investing, timing is important and the price you pay can be affected by the relationship between the number of properties available for sale and the number of buyers looking to buy. Just like fruit and vegs. When the property market has an abundance of properties for sale but less buyers around, then the demand for properties can be low which drives the prices down – called a buyers’ market.

If there are less properties available to buy than the number of people wanting to buy then prices tend to be higher – A sellers’ market.

Talk to your local real estate agents. They will know your market plus always research. Read current articles in the national newspapers as well as property investment groups and associations offer very helpful advice and support.

Timbeldon: “What do you think about this apartment on Trade me?”

Audie: “It looks cheap enough, ad says something about rental or it being good for Airbnb?”

Timbeldon: “Isn’t an Airbnb a place by the beach, like what we stayed in at Xmas. How does that work if we get an apartment in town?”

Audie: “You know anyone at work with a rental? They might be able to give us some tips? “

Timbeldon: “Bobbie said something last week about having a Rental and an Airbnb.”

There are effectively two types of accommodation a property owner can offer.

One is a Rental where you have Tenant/s living in the property. The Tenant is usually there on-going (long term) and the property is a shell with the tenant bringing in their own furniture etc. The Tenant pays for utilities being water, power & internet.

Tenancies can also be for specific fixed term periods (eg. 3 to 12 months). In these instances, the property may be furnished and fully kitted out enabling someone to live there.

Tenancies pay into your bank account, the same amount each week.

The Tenancy Act comes into play and it is important to understand the various parts and your obligations including the need for contracts. Healthy Homes requirements must be met and there are limitations on the ability to change terms of the contract esp. rental amount and how you can terminate the tenancy.

Length of stay is relevant as some fixed term arrangements are less affected by the Acts requirements.

The other type of accommodation is Short Stay, also called Airbnb and short term. It is all about offering guests a place to stay similar to a hotel. Unlike a typical hotel the property is fully furnished and kitted out so the Guest can cater fully for themselves; cook and do laundry. Cleaning is usually offered only at the end of the stay. The owner provides power & internet and bed and personal linens.

The amount paid by any Guest’s booking changes daily as it moves with market demand. Demand changes with the seasons and if there are any local events happening. During the summer seasons nightly rates charged to guests are higher than during the low or winter months. There aren’t any legal restraints.

Audie: “It’s a lot to take in but I think I get it; what’ll you say we just go and have a look at some”

Timbeldon: ‘Good idea”