Archive for May, 2012

Mortgage Interest Rates @ only 5.25% Can Be Cheaper Than Renting!

Buy a $200,000 property with a 10% deposit ($20,000) and the payment for a standard 30 year $180,000 table mortgage at 5.25% is only $230 per week. If you only used a 5% deposit ($10,000) the payment would be $242 per week approximately. This is likely to be less than the cost of renting the same property.

Residential Property Investors are now competing with First Home Buyers, as they see the merit in buying property as a good long term investment. People are always going to need houses to live in, and it is likely that an increasing number of people will be renting into the future. Rents are rising.

Properties have doubled in value every 8 years on average over the last 40 years in Feilding. If the value doubles to $400,000 in the future, the equity will have increased from say $10,000 (5%) to $210,000 plus the repayment of principal in that time frame. Compare that to a fixed interest investment! Don’t hesitate to contact me for advice.

Kind regards

Michael

 

What Makes A Good Councillor?

Those of you in the Feilding ward have the opportunity to choose a new member of our Council.

Council decisions have significant effects on the Real Estate Market. We all want a positive Real Estate Market, as that is where most of us invest our savings and build our equity.

We want a Councillor who cares about people, and who is pro business and pro community. We want them talking about growth and attracting residents, businesses and visitors to our town and district. We want them to support the organisations that are making the place vibrant, economically viable and who are improving our quality of life.

We want them looking after core services obviously, but also looking to invest wisely in growth. A batten down the hatches Council will lead to a decline in population, dropping of property values, and with that comes increased rates as the burden is spread more narrowly. It is not the fixing of pot holes that attract residents, but the upgrade of the town centre certainly does.

We want a Council that supports the volunteers that provide free work for our community.

I wish all the Candidates well, and look forward to a new Positive Councillor contributing to making our town and district truly great.

Regards

Michael

 

Market Update

The April statistics showed a drop in volume of residential properties sold through all Real Estate Agencies in Feilding in April. The number dropped to 23 in April after 2 strong months at 35 in February and 32 in March. Palmerston North dropped from 141 in March to 79 in April.

Our residential median is holding up well at $251,500, which is still higher than expected, and closer than usual to Palmerston North’s at $264,500. Both are assessed over 3 months.

Levin’s median is well below ours at $169,000, and similarly Wanganui’s at $271,250.

Readers need to clearly differentiate provincial New Zealand’s residential real estate market from Auckland’s and Christchurch’s. There is a far more buoyant market in those 2 large cities, with value increases that are not happening here.

Regards, Michael

 

Conservatories, Sunrooms, Verandahs, Decks & Patios

None are necessary in a house property, however they add huge amenity value to a home.

As the cooler weather approaches, my Mum will be enjoying her north facing conservatory, where the winter sun pours in, and helps heat her home. It is the perfect spot to enjoy lunch or a well deserved cuppa.

Our Kiwi lifestyle often revolves around the bar-b-que on the deck, verandah or patio over the summer months (Autumn this year!). This is where we experience the “good times.”

These outdoor or semi outdoor areas are often the favourite place on the property.

When selling, it is important to present these “favourite rooms”, whether indoor or out, so that prospective new owners can imagine themselves enjoying everything good that the “room” has to offer. This might be the difference between a positive buying decision, or otherwise.

Even during the winter, keep the patio, deck or verandah spotless, and show how you use it with table and chairs etc when Prospective Buyers are viewing.

Make your conservatory or sunroom inviting. A good Agent or Salesperson might well get the Prospects to take a seat and soak up the sun and ambience.

Kind regards, Michael

 

Net rate Approach To House Valuation

I obtain details of the most recent and comparable sales of properties in the locality. I start with a long list and prioritise to the best 6 or so comparables. I analyse them by deducting values for chattels, land, out buildings and other site improvements, in order to arrive at a net sale price for the dwelling only. I then divide that by the floor area to arrive at a net rate per square metre for the dwelling that has sold. I do that for each sold property.

I then compare each sale property net rate with the property that I am appraising, adjusting for such things as location, views, section size and desirability, construction materials, quality, condition, layout, size, character, X factor appeal etc and from that analysis I derive a net rate to use for the subject property.

I multiply the floor area by the adopted net rate to produce a value for the house. I then add on values for the other site improvements, out buildings, land and chattels to arrive at a value for the tot I al property. I then “stand back” and check whether it lines up with my “gut feel” based on a capital value comparison approach. With this, I use my experience of 34 years in the property industry as a Licensed Real Estate Agent, Registered Valuer and Property Auctioneer. Give me a call for a free, no obligation market appraisal, presentation report and marketing recommendation.

Kind regards

Michael