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 Welcome to our Frequently Asked Questions page. Below are links to the answers to some of the questions we have been asked on a regular basis. Please click on a link and it will take you to the answer.If you can't find the information you are looking for, please don't hesitate to contact us by clicking here and we will get back to you with an answer as quickly as we are able to. Property Investment Questions:Why is property a good investment? What type of property should I invest in? Which area should I invest in? Why should I invest in New Zealand property? When is the right time to buy? Iron BridgeWho is Iron Bridge?Where are the properties? What does Iron Bridge charge? Are there any hidden costs? Who owns the investment property? Can I talk to an investment consultant without obligation? What is the first step if I'm interested in purchasing an Iron Bridge Investment property? What guarantees are provided with regards to the quality of the buildings? Interest Rates, Tax and Capital GrowthWhat happens if interest rates continue to rise?Will Capital gains Tax be introduced to New Zealand? What if Capital growth slows, or even worse, if house prices fall? If/when I sell my property, will I have to pay back all the tax rebates? What factors affect the prices of houses (capital gains)? What is Capital Growth? The TenantWhat if I can't get a tenant?Is there any protection for a 'bad tenant'? Who manages the property and finds the tenant? Money MattersWill I have to put money into it each week myself?How much deposit would I need to have? How much debt is too much? How many properties can I buy? Do I need to own a property to be able to invest? What if I lost my job? Can I afford it? Can I lose my own home if things go wrong? What if I find myself in financial difficulty and have to quit the property? Property Management Questions:Do Iron Bridge have a dedicated specialist Property Management team? What is your property management fee - i.e. how much do you charge to manage my property? How do you select the tenants? What happens if you can't find a tenant? How do you work out the correct rent to charge? How often do you do inspections? If something needs fixing, who organises it? Is the cost of repairs included in the management fee? What costs will I have to meet? How much is the property rented for? How long does it take to source tenants on average? Back to Top Property Investment Answers:
Why is property a good investment?
Property represents a very secure and sound long-term form of wealth creation. As such, New Zealanders are increasingly turning to property investment to secure their future. A well managed investment can offer many advantages including income and capital growth. Many investors may also be able to use their investment to reduce tax payable on their assessable income. A well chosen property therefore should provide a good steady return on investment and, over time, increase both in rental potential and property value.What type of property should I invest in? We recommend investing in areas which deliver two key criteria; Good long-term Capital Growth (rising property values) and Good Rental Appeal (a large pool of tenants). As such, in New Zealand we focus on main centres such as Auckland, Wellington and Christchurch. Why should I invest in New Zealand property? Migration Pressures Net Migration has averaged 10,300 per annum over the past decade. The latest forecasts from Business and Economic Research Ltd (BERL), the Reserve Bank and Treasury suggest that net migration is likely to be fairly steady or have an upward trend. A strong rental demand: In 2006 33.1 per cent of households did not own the dwelling they lived in, up from just 26.2 per cent in 1991and by 2016 it is projected to increase to 38.1 per cent by 2016. Steady Capital Growth: Auckland property owners experienced an average increase of 10 per cent per annum for the past 20 years. The New Zealand property market is a secure long-term investment. When is the right time to buy? At Iron Bridge, we believe that it is spending 'time in the market' which will deliver results to you, not the 'timing of the market'. In other words, if you take our recommendation and hold onto your investment property for a number of years, then the best time to invest is now. Property cycles (peaks and lows) are an inevitable part of any property market but as long as you are in it for the long term, then you will gain the substantial benefits which property offers the long term investor. Back to Top Iron BridgeWho is Iron Bridge?
Where are the properties?
Our properties are located in main centres in New Zealand such as Auckland, Wellington and Christchurch. We engage in comprehensive research and have a detailed selection process using our "Capital Growth Criteria" to give you unbiased recommendations on the best location at any given time.What does Iron Bridge charge? Are there any hidden costs? Who owns the investment property? You do. The investment property is purchased in your own name or your chosen company name. Can I talk to an investment consultant without obligation? What is the first step if I am interested in purchasing an Iron Bridge Investment property? What guarantees are provided with regards to the quality of the buildings? Interest Rates, Tax and Capital GrowthWhat happens if interest rates continue to rise?New Zealand currently (August 2007) has the highest interest rate of all the OECD countries. Economists and banking specialists are currently speculating that our interest rates will begin to fall again in 2009 however it is important to note that whether this happens or not, it will not affect the viability of a successful property investment strategy. One effect of higher interest rates is that there is a larger pool of people needing to rent as it is much harder for first home buyers to afford to purchase their own property. If you can sustain an investment property at higher interest rates, when the rates do drop, the investment return should be greater. Will Capital Gains Tax be introduced into New Zealand? As Australia and most other countries have this tax, it is possible that it will be introduced in New Zealand at some point in time. If/when this will happen is a huge question mark. Also, capital gains tax is applied differently from one country to the next so if it was to be introduced into New Zealand, its exact form is unknown. What if Capital growth slows, or even worse, if house prices fall? Property moves in cycles which include rises and falls in house prices. Over a longer period of time however, house prices have continued to rise and predictably tend to double in value approximately every 10 years. A number of factors influence capital growth; Positive net Migration (the net gain the New Zealand population makes from overseas migration). This has averaged 10,300 per annum over the past decade. The latest forecasts from Business and Economic Research Ltd (BERL), the Reserve Bank and Treasury suggest that net migration is likely to be fairly steady or have an upward trend. Employment. New Zealand has the lowest official unemployment rate in the OECD sitting currently (August 2007) at 3.7%. Land scarcity. The artificial scarcity of land is one of the biggest contributors to prices rising as it is simple supply versus demand economics that pushes prices up. Secondly, the increased cost of subdividing land via building consents and resource management fees is pushing up the price of land tremendously. Building Costs. Continued rising building costs mean new houses are not getting cheaper, and thus their second-hand alternatives move in a similar vein. Thus, supply and demand together with the above factors indicates that the real estate market will continue to perform well. If/when I sell my property, will I have to pay back all the tax rebates? When you sell an investment property, if you have been claiming depreciation on the building, it is likely that you will be required under current legislation to pay tax on the depreciation claimed on the building known as 'depreciation recovered'. However each investors situation is different so we always recommend you seek professional advice from an accountant should you wish to sell an existing investment property. What factors affect the prices of houses (capital gains)? Please click here for an overview of these factors. What is Capital Growth? Capital growth (also referred to as 'Capital appreciation') is essentially the increase in value over time of the home/investment you purchase. For more information, click here now. Back to Top The TenantWhat if I can't get a tenant? The rent being asked, location, attributes of the property and community facilities are all aspects that prospective tenants will take into account when considering a property to be rented. Because Iron Bridge properties are carefully selected for their exceptional rental appeal, this question essentially becomes obsolete and changes from 'Will I get a tenant?' to 'How much rent can I charge?' Of the hundreds of properties we have under management currently, we have 99% occupancy at any given time. Is there any protection for a 'bad tenant'? Yes. Iron Bridge investors have access to a comprehensive House and Rental Insurance Policy which gives a very strong level of protection against 'problem tenants'. You are welcome to contact one of our specialist investment consultants to find out more. Who manages the property and finds the tenant? A cornerstone of the Iron Bridge Programme's success is having the investment property professionally managed by our 'In-House' company, Iron Bridge Property Management. This ensures that our investment recommendation is unbiased as we are also responsible for finding the tenant at, or above, the illustrated rent. This is not a mandatory part of having an Iron Bridge property investment however most of our investors choose to have us manage their properties as the benefits for doing so are substantial. Back to Top Money MattersWill I have to put money into it each week myself? This is dependant on the specific property chosen and each investors individual financial circumstances and goals. Many clients choose to 'top up' their investments by a certain amount each week in order to achieve their particular investment plans. As interest rates, rents and property cycles change, this also influences this aspect of the investment strategy. How much deposit would I need to have? The answer to this is dependant on your individual circumstances. Some investors are able to borrow 100% against the equity in their own home or assets. Other investors choose to put in a deposit when purchasing their investment property for a variety of reasons. Your Iron Bridge Investment consultant will assist you in determining the best option for your specific needs and goals. We may also recommend that you discuss your own specific circumstances with one of our recommended (but entirely independant) mortgage brokers. Click here to enquire now. How much debt is too much? Your current income, age, personal comfort level and goals and plans will all influence the answer to this question. At a first consultation with an Iron Bridge Investment consultant, this question will be addressed and answered specific to your individual circumstances. Alternatively, you are welcome to click here and fill out the form after which one of our consultants can contact you to discuss this further. How many properties can I buy? This depends on three key factors; your income, your assets (particularly property) and time. Each of these factors is in turn influenced by your specific plans and goals. It is important to establish a long-term investment strategy. The purchase of multiple properties can be part of this plan if it enables you to achieve your goals. Do I need to own a property to be able to invest? No. If you already own your own home or other property, it is easy to step into the investment arena. If however you don't already own property, there are options available and Iron Bridge has successfully assisted many investors who were not current property owners. What if I lost my job? If you didn't own an investment property, your own home could be at risk whereas, having 'two eggs in your basket' in fact gives you more choices and options until you find a new job. If you were were no longer able to financially sustain the investment property, you always have the option of selling it and realising any capital gain you have made. Can I afford it? Many of our previous clients were unsure of their ability to buy an investment property prior to meeting with us and were surprised to find out how easy and accessible property investment actually was. To find out whether you can take control of your future and step onto the property investment ladder, contact one of our consultants today for a free no-obligation consultation. Knowing your choices and options is the first step to creating financial security and wealth. Can I lose my own home if things go wrong? With our carefully planned and managed program, it is highly unlikely that things would 'go wrong' however if you found yourself in financial difficulties for any reason, you always have the choice of selling your investment property. This would enable you to manage the debt servicing issues related to the investment property and therefore minimise the impact of this on your own home. In summary, it is unlikely that you would lose your own home as a result of owning an investment property and this has not happened to any investors who have worked with us over the last 10 years. What if I find myself in financial difficulty and have to quit the property? You are able to sell your property at any time. You own the property and the decision to sell it or keep it is entirely at your discretion. Back to Top
Property Management Questions:
Do Iron Bridge have a dedicated specialist Property Management team? Yes. Our specialist team in Auckland and Christchurch sources quality tenants for your property together with arranging lawn care maintenance and a regular comprehensive inspection programme. This includes;
What is your property management fee - i.e. how much do you charge to manage my property? We have a structured management fee designed to suit each investors own requirements starting from 8% plus G.S.T. How do you select the tenants? We have a strict tenant selection criteria. Selecting a suitable tenant for your property is extremely important. The person chosen needs to be someone who will look after your investment and be in a good position to pay the rent. Our property managers have an excellent knowledge of the rental market and professional property management systems in place. All tenants are required to be screened thoroughly via credit and reference checks. What happens if you can't find a tenant? The rent being asked, location, attributes of the property and community facilities are all aspects that prospective tenants will take into account when considering a property to be rented. Because Iron Bridge properties are carefully selected for their exceptional rental appeal, this question essentially becomes obselete and changes from 'Will I get a tenant?' to 'How much rent can I charge?' Of the hundreds of properties we have under management currently, we have 99% occupancy at any given time. How do you work out the correct rent to charge? Our property management team are continuously engaging in market research and analysis with the view to keeping the rents at current market values. How often do you do inspections? We inspect the properties we manage up to four times per year at no extra charge and have a lawn maintenance programme also which provides for ongoing upkeep and regular contact with tenants should they require it. If something needs fixing, who organises it? Your property manager does. You can have peace of mind in the knowledge that repairs and maintenance will be carried out by qualified skilled tradesmen. Is the cost of repairs included in the management fee? No. Authority will be requested from you for repairs to be carried out and subsequent to the maintenance being completed, you will be invoiced for the cost of such repairs. Iron Bridge Property Management do not charge you extra for this service. How long does it take to source tenants? Most properties are let within a very short time frame as the demand for executive level properties is very high. We always seek fixed term tenancies for our landlords. This ensures longer overall length of leases and much less vacancy than periodic tenancies. The tenants also prefer the certainty that comes with long-term tenancies. Back to Top We welcome your enquiries. If you haven't found the answer to your question above, please click here to contact one of our consultants and they will endevour to come back to you with a reply within 24 hours. |