NELSON PROPERTY INVESTORS ASSOCIATION
OCTOBER 2011 NEWSLETTER
Our next meeting is being held at the Nelson Suburban Club, Tahunanui Drive on Tuesday1st November. The meeting proper commences at 7.30 pm with the ever popular meal at 6pm when you will have the opportunity to chat to other investors. This month we have two speakers. The first is Heather Jopson. She wegive us her take on lease to buy deals. (More about her below). Heather recently ran a very successful series of seminars on Women in Property. Also speaking is Thomas Bowater Branch Director Crombie Lockwood NZ Ltd. Insurance cover is in a state of flux. The Property Investor Associations have had aworking relationship with Crombie Lockwood for many years. When things are looking grim you need to know who your friends are. Find out from our local expert what is happening and how to get the best protection by working through a top rate insurance broker. OCTOBER 2011 NEWSLETTER
HEATHER JOPSON THE LANDLADY IN OUR OWN BACK YARD.
Heather Jopson is a Director of New Zealand Portfolio Services that supports its clients to achieve financial freedom through property investment,with services tailored to the client’s individual needs, goals, situation, and personal tolerance to risk. She first got involved in property investing in2003, when she was looking for a flexible way to make a great income, without sacrificing the needs of raising a young family. Her very first venture proved that she could make more money investing in property than she could by working, and with a much better lifestyle for her family - and thus her addiction beganand she hasn't looked back.Heather is an active property investor with extensive experience inrenovations and trades and is one of New Zealand’s most experienced and respected Lease Options (rent to buy) operators, having put together many, many millions of dollars worth of Lease Options agreements. Heather has a creative approach to all deals she puts together. She believes that lack of money is not a genuine obstacle to success in property - she firmly believes that with the right knowledge, creativity and determination anyone can build a robust and sustainable property portfolio. She is passionate about helping people take responsibility for their financial future. Her energy and enthusiasm combined with her extensive experience in creatively-structured deals helps all clients put together ‘out of the box’ solutions to achieve their financial goals.A TALE OFTWO LADIES
Being a property manager is always a challenge dealing with properties and people. The nature of properties is that things will malfunction from time to time. Sure some problems can be minimised by keeping up your maintenance like cleaning your gutters and inspecting drain gullies regularly. However things do still fail like burst water pipes and so forth. Landlords need to educate tenants about leaks and other issues so repairs can be attended to before property damage occurs. Well last week I was disturbed from a deepsleep by the telephone ringing. Knowing that some people like to listen to my answer phone or leave me loving messages I always wait till it rings for the second time. I tumbled out to politely answer as if it was normal to be taking calls at midnight. On the end of the phone was one normally lovely tenant who had become hysterical. “I have water coming out of my light bulbs shescreamed.” Knowing that is an impossible thing to happen I took a deep breath and extracted a bit more information. It is dangerous here she wailed. I have rung an electrician and he says I need toget a plumber up in my ceiling right now. So I told her “What you need to do is turn the water off at the mains. The toby is right beside your front door, lift the black lid and turn the knob clockwise” No she wailed the electrician said having water on the wires is dangerous. My son and I are going to be electrocuted. I need a plumber to crawl into my ceiling right now tonight to fix the problem. You are not an electrician he knows more than you. I had to say sorry lady but your understanding of such things is defective. I said if you will not turn off the water I will get dressed and drive across town toturn off the water for you. And that is what I did despite the ever increasing abuse continuing until I hung up. I probably could have fixed the plumbing problem myself but called the plumber in the morning. The strange thing is he could not find any sign of a water leak. I just wonder what the problem was?Two days go by and another lady tenant rings. We have an emergency. My husband was hosing down the house cleaning it before we left the tenancy and the water hit the mains lead in cable and lots of flames came out. You understand about houses. What should we do? I am worried that we might have a fire. I rushed down to the house, deduced that the pole fuse had blown, calmed the nerves of the great conscientious tenant, and arranged for the electrician to repair the cable. No big deal. These things happen.Isn’t it sad? Here we havetwo normal intelligent people, two problems, neither of which were of my makingand two outcomes. The first has destroyed a great relationship with a great tenant who has been in the house for the last three years. The second event has created good will and we have parted on the best of terms. I just wonder how someone else would have handled the problems. Could I have handled it some other way?In our business it is inevitable that there will be some damaged houses and damaged relationships. There is no way to avoid these problems. What landlords need to do is to not be the one that gets hurt doing the correct thing.THE MARKET
In case you had not noticed we have a general election coming up in a few weeks. Clearly 99.9 % of the population are more concerned about who will win the rugby than who will govern us for the next three years. Meanwhile we know that our market has been messed with by politicians, bankers, and international financiers. Normality is some way off. Just remember all the respected experts over the years have said to buy when everyone else is selling. Try to be counter cyclical is the message. The problem is what is the message? What on earth is happening? Where are we on the yoyo cycle? I am noticing a few clients are selling due to external factors like sickness, business disasters and relationships. No one is selling due to fear. Tenants are not yet paying over the top rents due to fear and belief that tomorrow rents andwages will be higher. The gap between rent income and outgoings is narrowing with a very small number of smart buyers finding cash positive investments. For those of you who can remember studying the mathematics of cycles you will know that the period when the greatest speed is occurring is half way down or halfway up. When we are at the top or bottom of a cycle the ball stops moving. Things are still happening then with potential stored energy at a peak. But you can not see anything happening. Out here in our market vacancies are heading down yet demand is not surging ahead.Numbers of properties for sale are low but buyers are not falling over each other to pick up bargains. Study the market but do not stay sitting on that mountain meditating for the rest of your life. Make your move before the mob gets stirred up by the media. Whilst I am achieving rent increases here andthere of $10 to $20 when we re let a property if we push anything too far the property just sits. Things are still very price sensitive. SIGNS OF LIFE IN VANGUARD STREET
At long last something seems be happening down in the old light industrial commercial zone of lower Vanguard Street. A number of landlords have had to cuttheir rents in order to either keep their tenants or attract a new one. Suddenly like a bolt of lightening new, out of town blood, is coming to the waste lands. Some tenants have relocated and new signs are going up. I wonder what this all means and why. I have been looking for a tenant for the last twoyears. I had tried Trade Me and almost every agent in town. My good friends in the various commercial agencies have tried ever so hard but it has been hardwork getting people to make the move. One real estate firm reduced theircommercial staff from, I think, five to one over this period. A number of prospects have been looking but no one seemed confident enough to sign acontract. Suddenly a whole bunch of properties have been leased. Hooray I shout we are on our way again. I ask you. Is this the beginning of something great about to happen in the fringe CBD. Fifteen years ago I used to think of it as the Golden Triangle what with the various developments like the Warehouse and Countdown and some good rent increases were achieved. But when noting happened for so long I then started wondering if it should be called the BermudaTriangle. The changes do not seem in any way related to the Canterbury situation. I would like to think it is the start of a new burst of economic confidence and activity. There is still a bit of space down there but suddenly things are looking better than they have been for a long time. If we all huff and puff a bit perhaps we will see the whole lot come to life again.