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  1. #1
    Join Date
    Jun 2005
    Location
    Nelson NZ
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    Default Nelson PIA meeting announcement and newsletter

    NELSON PROPERTY INVESTORS ASSOCIATION
    AUGUST 2011 NEWSLETTER
    PO Box 198 Nelson
    Our next meeting is being held at the Nelson SuburbanClub, Tahunanui Driveon “Tuesday 9th August. The meeting proper commences at 7.30pm with the ever popular meal at 6pm when you will have the opportunity to chatto other investors. By popular demand we have BobHargreaves School of Economics and Finance, Massey University,returning to address us. He spoke to our meeting a few years ago and is one ofthe country’s top intellectuals on property and demographic trends. This is what he is brewing up for us. I have been doing a bit of work looking atusing hindsight to compare the actual returns on rental properties with somealternative options. I can run the figures for a Nelson average and make somecomments about future prospects. Don’t forget to book that meal in advance by emailingme.
    STINKING THINKING
    I have my normal writers block before urgency has forced me to the key board. The general idea about what to comment on is the above heading of a sermon Tony Barnett gave many years ago. Then I read the latest NZP magazine and discovered they have the same thoughts. Here we are in the middle of winter with snow unusually on the Grampians and more properties to let than I have had for ages. Some real estate sales people tell me that residential property investors are conspicuous by their absence in the market. The National government ministers are still chanting the mantra that they think too many people have been investing in property and think more people should be investing in productive industries.Goodness knows what particular industries they have in mind. Are they thinkingof the big F’s of fishing, farming or forestry? Those of us who dabble in the share market know it is not a bed of roses at the moment. Then just when it cannot get much colder and miserable, I poke my head out from under the blankets to discover we have a general election looming and the Labour party announce their policy of a capital gains tax on all investment property sales and capital gains on shares sales too. I did not even bother to read what the Labour hopefuls had in mind doing this. They obviously want to lower investment inboth housing and industry. Perhaps they want to encourage more spending in social housing and welfare. Has Labour not heard the saying when in a hole the first thing you do is stop digging? Not that I, nor lots of other Kiwis, think that Labour has much chance of getting into power but surprisingly the media has given their ideas lots of exposure and some of the ideas have stuck firmly in the minds of many people.All these stinking thoughts are influencing what good decent hard working people like you and me are doing. Here we are in a trough between housing price peaks. The number of new home starts is at an all time low, meaning the supply of competing rentals is down. Immigration surprisingly is still in our favour which means the demand should be tracking up. The Christchurch earth quake has taken out thousands of dwellings and a significant number of people have moved to Nelson with more to follow. Interest rates are at an all time low and have been down for a longer period than I can ever recall. A gradual tsunami of rent increases is swirling in a muddy stream out of Aucklandand. I guess this will spread out into the other growth areas of the country when the conditions are right. Goodness gracious the fundamentals all point to good times yet we are still stuck down here in the mire. What is going on? My theory is the bulk of residential investors do not buy when the numbers stack up.They buy when the feel good factors are there. They look for those little yellow fluffy ducks to see if they are all lined up. With a bit of luck lots of you have completed the annual ANZ NZPIF survey of property investors. This survey will no doubt repeat the findings of many earlier surveys. That is those investors owning one or two residential rental properties make up the vast majority of investors.Those owning more than five rapidly recede and those owning over ten are like white bait when I go fishing. I and other writers keep telling investors do your sums before buying but almost no one ever listens. People want to listen to good real estate sales persons telling them such and such a property will make a great investment. “There is always plenty of demand for family homes in Stoke. You will never lose money if you buy my hot listing right now. If you invest in local Bad Street where the returns are higher you will have all sorts of troubles. Only buy there at your peril.” Sure some beginners know better, buy their one or two in bad alley then quickly sell off when the experience is none to wonderful.Rarely does one hear in the media about lovely old investors helping out young families by housing them. Who cares if Glenn spends his weekends and every bit of time between Sundays fixing blocked drains, delivering old beds to the down and out, and picking up rubbish departing tenants have left behind. Such actions must surely be related to making more money and have nothing to do withhelping people. There is no widespread appreciation of what landlords do. Sure the socialists, when they get into power, think that civil servants are the best people to be landlords. Have you ever heard of a tenant saying their civil servant landlord is far more considerate and caring than their old private landlord? With the ongoing news releases from the current Minister of Housing continually patting himself on the back I am yet to read any good positive news about private landlords housing someone that others would not help. Well I can tell you just because politicians and economists do not place value on what we do many tenants have other thoughts. There are few investments in the world more worthy than residential homes. Children grow up in them, old people cherish their homes and young people make love in them. These things far outclass offices that are full of accountants and commodity traders. Who on earth lovingly cares for their industrial workshop?
    No folks, as usual the people in power in Wellington have stinking thinking.
    I am pulling my warm hat on and heading off into my own world where I can do somegood for others in spite of what others think.
    I will do my own thinking.
    I smell roses when others smell rubbish.
    WHY COME TO THE MEETING
    I wonder if you read Tony Alexander’s report a few weeks ago?“It pays to remember what we have been writing for over two years now. This is the most uncertain interest rate forecasting environment that we have ever seen. So don't be surprised if our forecasts and market expectations change substantially over the coming year. That in itself of course is an argument for having some portion of one's debt fixed just in case everything economic comesup smelling of roses and rates jump. We are in fact finding an increasingnumber of businesses undertaking their interest rate risk analysis and opting for a modicum of rate certainty rather than punting all their core debt onfloating rates this coming cycle. Good luck."

    Clearly the experts are confused and really have no idea what the future holds. We need to study the tea leaves carefully in times like this. People like Bob Hargreaves can help us do this. Do not miss a great opportunity to be one ahead of the rest of the pack. Things are happening in our market that has me wondering. An outsider’s perspective can often see things that us locals overlook.


    THE NZPIF CONFERENCE
    Just in case you missed it this year is off the edge location wise. They are holding it in Queenstown. It is bound to be great fun and full of inspiration. For booking head to http://www.nzpif.org.nz/events.
    MORE UNLIKELY STORIES FROM GLENN
    By popular demand here is another story. Iwas lining up an eviction last week. The tiny flat looked cold, lonely, and uninhabited. I stood outside hopping from foot to foot trying to keep warm and trying to make up my mind. Do I wait till Friday and get the bailiff or have the tenants already run off. Banging loudly on the front and back doors produced no response. The shivering neighbours said they had not seen the young couple for a few days. I unlocked the back door for a quick peek only to discover the young lovers in bed. Oh dear, that is not the way the DBH guide book says to do it. So come Friday it was off to the court house for an eviction and Order for Examination warrant.On Saturday night a loud knocking was heardat my door. I opened it to find a police officer who said the young couple had accused me of unlawfully entering their property. This is civil matter officer I said in my best authoritative voice. No necessarily so echoed the response.Wait out here in the cold officer whilst I fetch my letter from the courthouse. I showed him the official letter saying the warrants were being served and down loaded a long complex description of the court process for evictions.The officer took a couple of steps back took a deep breath and said. You will not be hearing again from us about this matter. We then chatted about the block of flats and how much work it created for both of us and that was that. On Monday the Eviction day the smooth talking lout almost convinced the bailiff they could stay for a few more days. When I recounted the police story to madam bailiff her resolve was rekindled. So it was off onto the street with them where they deserved to be.
    This newsletter is published with theSupport of SBS Bank. Remember to support our sponsors.

    Please note. NPIA is a voluntary support organisation by landlord for landlords. Any ideas advice or suggestions obtained at our meetings or from our newsletters is not intended to replaceprofessional legal, accounting, or valuation advice.
    Last edited by Glenn; 27-07-2011 at 10:50 PM.


 

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