Blog - Cooper & Co

Investing in Property in 3 Simple Steps

Owning an investment property has long been a part of the Kiwi dream. For many first-home buyers, buying a smaller rental property in a cheaper area can be just what they need to get a foot onto the property ladder. For savvy investors, it’s an opportunity to generate wealth. But before you jump in head first into property investment, take a look at these 3 simple steps to get you started.


1. Check Your Finances
Before investing in property you’ll need to take stock of your current financial situation, paying careful attention to your assets, your income and your outgoings. Work out how much you can realistically afford to invest.

If you already own a property, you may be able to use the equity in that property to kick start your investment property portfolio. As a first-home buyer, you’ll need to have a deposit, the amount of which will vary between lenders. Your mortgage adviser will help you determine which lender best fits your situation, working from a panel of lenders, and can help you get pre-approval so you know how much you could borrow.

2. Determine Your Goals and Strategy
Decide on your goals for investing in property and the strategies to get you there. To help you get started, think about:

• Why you’re investing in property – to generate income, build wealth or to save for retirement.
• What your time frame is – how long until you retire, how long you plan to hold onto a property before selling.
• The type of investment property you could buy in order to reach your goals – a smaller rental in a cheaper area versus a modern apartment close to the CBD.

The investment strategy you choose will depend on factors like your age and how close to retirement you are. If you still have 20 years to go until retirement, you’ll likely be looking for capital gain to grow your investment substantially. If you’re close to retirement, you’ll probably choose a strategy that will provide a solid cash flow that you can comfortably live on during retirement.

3. Research the Property Market
Once you have a clearer idea of your goals and investment strategy, it’s time to research the market to find the right property to match. For each property you’re considering, take a look at:

• How long it’s been on the market.
• Any changes to the advertised price since it was listed.
• The sales history.
• Median sale price and historical capital growth rates for the area.
• What price comparable properties are selling and renting for.

Also consider the costs associated with maintaining and possibly renovating the investment property and the likely rental income you could achieve as these will all be determining factors in your property choice.

Investing in property needn’t be a complex process. At every step of the way, our mortgage advisers are available to guide you and assist you to ensure you understand the processes and requirements needed for you to reach your property investment goals.

If you’d like to talk to one our mortgage advisers about your property investment goals and how to achieve these, simply get in touch and we’ll have someone call you back.

Source: Mortgage Express. More here.

Capital Gains Tax Update from REINZ

REINZ questions whether CGT will improve housing affordability in the long term

Following  announcement on 21 February from the Tax Working Group that it recommends the Government introduce a Capital Gains Tax (CGT) from 1 April 2021 at an individual’s marginal tax rate, the Real Estate Institute of New Zealand (REINZ) is questioning whether implementing a CGT will improve long term housing affordability.

Bindi Norwell, Chief Executive at REINZ says: “In the short-term there may be some initial relief in house price affordability as investors look to sell their property to avoid paying CGT. This may create opportunities for first home buyers.

“However, in the long term it’s likely to push house prices up as people look to invest more money in the family home, as there will be less incentive to invest in rental properties or other forms of investment e.g. equities.

“This will also have a flow on effect for the rental market with fewer rental properties available for tenants, thereby further pushing up weekly rental prices when they are already at an all-time high.

“The report even recognises that any impact on housing affordability could be small, therefore, we question whether all of the administrative burden and cost to implement GCT is worth it? Especially as CGT coming at the end of a raft of legislative changes the housing market has faced recently including the foreign buyer ban, ban on letting fees, insulation, healthy homes and ring fencing.

“Interestingly, when we look at the impacts of CGT globally, the most recent country to introduce CGT in the OECD was South Africa. Whilst CGT wasn’t the only impact on South Africa’s housing market, house prices there increased by 139% in the first six years* following CGT implementation indicating that the tax did nothing to improve housing affordability. We believe introducing CGT in New Zealand may have little impact on improving affordability long term,” says Norwell.

“We’re also disappointed that the rate of CGT is an individual’s marginal tax rate and that there will be no reduction in the rate such as is seen Australia and the US. This means that New Zealanders will effectively be paying a much higher rate of capital gains tax than individuals in other OECD countries.

“However, it is positive to get confirmation that the Tax Working Group has recommended that the family home is excluded from CGT and that the calculations of gains are not to be retrospective. Additionally, it’s great that some relief in the form of rollover provisions for small farms and businesses has been proposed,” concludes Norwell.

* Data sourced from the First National Bank of South Africa Repeat Sales House Price Index

Does a swimming pool add value?

As the summer heatwave hits, the idea of a swimming pool in your backyard is an alluring one. And surely you can justify the cost by the value it will add to your home?

Not necessarily. In fact, the opposite may be true. In some cases swimming pools can put off prospective buyers who fear the ongoing maintenance costs and time, the dangers to small children or the amount of space pools can take up on the section.

Of course the decision to install a swimming pool isn’t usually all about your property re-sale value, it’s about the personal enjoyment of you and your family. But if you’re considering it there are some things to think about before proceeding.

Location, location, location.
It’s stating the obvious but do you live in a warm enough region that will see you use a pool more than a few days a year? Also consider how close you are to the beach or good local public swimming pools that may offset the need to take on the expense and ongoing maintenance of a pool yourself. This will also influence property buyers shopping in your area. Consider the average house prices in your area. Do you risk over-capitalising by spending on a pool? If you need to recover that cost when it comes time to sell you may put off buyers who find the property too expensive for the area you’re in, and fail to attract bigger spenders who aren’t interested in your area. Talk to your local real estate sales consultant. They can give you an idea of what people are spending in your surrounding area and what you can expect for your property before or after the addition of a pool.

Size matters.
Consider the size of your section. Will the addition of a pool take up the majority of your backyard? If so that may deter a number of buyers looking for a good size section. Large pools can make your section seem smaller and less usable, particularly to those who don’t prioritise the need for a swimming pool.

Shop around.
If you’re committed to getting a pool for your own family to enjoy but are mindful of the impact it may have when it comes time to sell your home, do your research on all the different styles and construction options of pools available. Try to find the “happy medium” of a pool that will meet your needs without taking over your budget or section. Too cheap and it may not age well, putting buyers off by appearing scruffy and high maintenance, too expensive and you run the risk of over-capitalising

Make it sparkle.
If you do have a pool, whether you’ve inherited it with your house or added it yourself, make sure it is in tip-top condition when you come to sell your property. Make sure it is scrupulously clean, fenced to meet the legal requirements and that all surroundings such as fences and decks are well maintained.

Indoor Plant Guide // 2017


Level of care – Easy

Peace lilies, also known as closet plants, are a popular choice for offices and homes. When it comes to indoor plants, peace lily plants are some of the easiest to care for.

Light/Water – Medium-to-low light and only watering when the top of the soil is dry will keep the lily standing tall.

Display – Display in a modern planter adjusting to your house or rooms theme.

Screen Shot 2017-01-19 at 10.13.42 am

Level of care – Easy

There are many varieties of Cacti available that are suitable for indoor planting, including Prickly Pear, Rose Pincushion, Euphorbia and Rebutia.

Light/Water – Require only modest amounts of water when soil is dry and prefer direct sunlight. Before watering your cactus, check to see if the soil is dry. Then water well, especially in the growing months which is April through to mid September. Placing Cacti in a bright sunny window is usually best.

Display – Display your Cacti in a planter.

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Level of care – Easy

Succulents or sometimes fat plants, are plants that have some parts that are more than normally thickened and fleshy, usually to retain water

Light/Water – Most varieties need at least half a day to a full day of sunlight. After planting, water in well and allow the soil to dry slightly between watering.

Display – Succulents can be used in vast ways – such as glass containers (see image), planters and containers.

Level of care – Easy

A great houseplant for beginning gardeners.  It is a very carefree type of plant that likes dry soil and air, which makes it perfect for many indoor environments. If you want to share the plant, it can be divided or started from a leaf cutting

Light/Water – Little water, only when the soil is dry ( 1/4 cup of water every few weeks). This plant also likes bright, indirect light.

Display – This plant used to be known as a background plant surrounded by lots of other smaller plants – now many people display them as a bold feature. Try having it in a pot plant in a nice corner of your home.

Level of care – Easy

Heartleaf philodendron is a popular house plant because it is extremely easy to grow. It’s also known as the Sweetheart Plant. Heart-shaped, glossy leaves emerge bronze, then quickly turn green. The leaves are typically 2-4 inches.

Light/Water – Moderate to bright light, but no direct sun. Will tolerate low light. Keep soil lightly moist and allow surface to dry out between watering in winter. TIP! Yellow leaves are caused by over watering.

Display – In a hanging pot for the leaves to flow down into a vine OR into a planter allowing the water to drain through.

Level of care – Moderate

This indoor tree type plant grows over 15 metres tall in it’s natural habitat and up to 3 metres indoors, although they can be topped to prevent them growing taller.

Light/water – A brightly lit spot is needed without direct sunlight and water when the top soil becomes slightly dry and reduce watering in the winter.

Display – They’re the type of plant that looks great near doorways, hallways, fireplaces and other featured parts of a room