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7 Questions to Ask Before You Buy an Investment Property. · The Curve

• 0:00
  Today we have Peter West in studio again.
• 0:02
  God, we just can't keep him out.
• 0:03
  He just keeps forcing
• 0:04
  his way in.
• 0:05
  It's really annoying.
• 0:07
  No, Pete's amazing.
• 0:08
  I've worked with him personally with
• 0:09
  two of my investment properties and we get a lot of questions about how to invest in property
• 0:15
  specifically.
• 0:16
  There's a lot of green and red flags when it comes to picking the right property to
• 0:20
  invest in to make sure that you actually make money in investing.
• 0:22
  And so in this conversation,
• 0:24
  we go through in quite granular detail everything from like what are the deal breakers in terms of
• 0:30
  location what should a house look like what sorts of things should you avoid to make sure that you're
• 0:36
  actually making a really decent return when it comes to investing in property so there's lots
• 0:41
  of pearls of wisdom in here Pete's invested in property for over 10 years so hopefully you get
• 0:46
  a lot out of it and of course if you've got any questions after listening please let us know and
• 0:50
  we'll make sure we answer them in another episode.
• 0:54
  Buying property can feel like this giant,
• 0:58
  daunting, what the F am I supposed to be doing journey.
• 1:02
  And that felt like that.
• 1:04
  Oh, it was
• 1:05
  you're up shit's creek without a pedal.
• 1:07
  Anyway, this is why we're so excited to be partnering
• 1:12
  with BNZ to bring you this property podcast.
• 1:14
  Yes.
• 1:15
  It's honestly, one of the things that I'm
• 1:18
  most excited about for this year is to add on the conversations about growing wealth with investing,
• 1:25
  actually being able to talk about property regularly because it's such an important
• 1:28
  asset class and such a brilliant way to grow your wealth.
• 1:32
  And there is so much to learn in
• 1:33
  so many different ways that you can invest in property, which is why we're stoked to be
• 1:38
  partnering with BNZ because they know that there's no two journeys to buying property that are the
• 1:42
  same, which means that you kind of have to work together.
• 1:45
  You know, you're a little team.
• 1:46
  So whether it's your first flat with your partner, whether it's your dream home, whether
• 1:52
  it's your next investment move, BNZ Home Loan experts are ready to guide you from the moment
• 1:57
  you start searching till the day you sign.
• 2:00
  Thank you so much to BNZ for empowering this podcast.
• 2:03
  Let's get into it.
• 2:04
  So Pete, for anyone that doesn't know, would you claim a property investing expert?
• 2:11
  I'll claim it, yeah.
• 2:12
  I think we should.
• 2:12
  If I'm not going to claim it, who is?
• 2:14
  Exactly.
• 2:14
  So Pete has worked in property investing for a really long time and he worked specifically with me.
• 2:19
  I was one of your first clients, right?
• 2:22
  So Pete slid into the DMs, not creepy, is married, baby on the way, and just had heard me talking on the podcast quite a lot about wanting to buy property.
• 2:31
  And he was basically like, look, I've heard that you are interested in property.
• 2:36
  You wanted to buy a house.
• 2:38
  I do a specific type of property investing, which is called blah, blah, blah, blah.
• 2:41
  And there was this big long message and I remember thinking this could be totally disastrous.
• 2:45
  This guy could be really weird and full of shit.
• 2:47
  Or this could actually be really brilliant.
• 2:49
  And I definitely had a feeling it would be brilliant.
• 2:52
  And I think I've said this before.
• 2:53
  I think it was because it was a very well-written message, you know.
• 2:56
  Sometimes when someone's sending a weird DM and they have no idea what they're talking about, they're spelling this, you know, you thought about it.
• 3:01
  Full stops are important.
• 3:03
  Yeah, yeah.
• 3:03
  There'd been some proofreading for sure.
• 3:06
  So basically we jumped on a call, spoke it through.
• 3:09
  And then I just decided, you know, I'm just going to give this a go.
• 3:11
  Probably slightly risky because it was early days in terms of, you know, you now have worked with so many clients and have had some amazing success stories, mine included.
• 3:20
  But at the time, it was a bit of a, you know, why not?
• 3:23
  Let's just give this a whack.
• 3:24
  But it was a total sidestep to what I knew or had ever thought about when it comes to investing in property.
• 3:30
  And I think that it's important before we get into this episode to just set the scene that property investing for a lot of people, they think property investing means buying my first home.
• 3:41
  That is the total opposite of what we're talking about today.
• 3:44
  It is not a lifestyle decision.
• 3:46
  It's purely a numbers game.
• 3:49
  We're investing to make money through the asset of property.
• 3:53
  Yeah, I think it's just important to say that from the outset.
• 3:56
  You may own your own home.
• 3:58
  you may have never thought about investing in property or if you have thought about investing
• 4:02
  in property it had nothing to do with what we're about to talk about but I just think keeping an
• 4:06
  open mind about different ways that you can make money through investing is really important and
• 4:10
  this specific approach for me was was really new but I've made over 200 grand in this approach to
• 4:15
  property so speaking from experience but also still don't feel like an expert you know I think
• 4:22
  the best thing about working with you through these two properties that we did together was
• 4:26
  actually just the idea that I had someone that I could trust and ask questions to and knew that
• 4:30
  there was someone guiding the process.
• 4:32
  Property's scary.
• 4:33
  First home, fifth home.
• 4:34
  It is a lot of
• 4:35
  research, Dede.
• 4:36
  You've got to know what you're doing and I didn't.
• 4:38
  So having you to kind of work
• 4:39
  with was so important for me.
• 4:41
  I loved that.
• 4:42
  But for anyone that may just be dipping their toes
• 4:44
  in or wanting to learn more, I actually wanted to start right at the top in terms of what do you
• 4:51
  look for when you're looking at a specific property, when you're trying to keep in mind
• 4:55
  investing and do you know what in this whole episode let's focus on different types of
• 5:00
  investing so I think anything that is not investing in your forever home that's what
• 5:05
  we're talking about what are some of the key things that you look for think about
• 5:09
  signals that are important that are kind of going through your brain when you first look at a
• 5:15
  property yeah so let's I'll split it down into sort of where we where you invest and then obviously
• 5:21
  then there's the specific asset, which is the type of house.
• 5:24
  So in terms of where you invest, first and foremost, is there diversified employment?
• 5:28
  What I mean by that is you want to stay away from towns and pretty much towns where there's
• 5:33
  only maybe one or two major employers, because if that employer goes bust, then people aren't
• 5:39
  going to have jobs.
• 5:39
  If people don't have jobs, they're not going to move to that specific area.
• 5:42
  And therefore, there's going to be no one to buy that asset off you.
• 5:46
  It's not going to appreciate over time.
• 5:47
  And so that's really, really important.
• 5:49
  So when considering a town or an area to buy, you need to understand who are the major employers, what sort of industries are they in, you know, is that area reliant on one particular industry, that could also be a risk.
• 6:02
  Because if there is, then if that industry, if there's a change, maybe it's oil and gas or something like that, then that's also highly risky as well.
• 6:09
  So you need to sort of understand that component of who the employers are in that particular area and hopefully they're diverse because if it's not diverse, stay away.
• 6:19
  And I think a lot of people worry when they buy a property that's not in a main center, like a big city, what is the rentability and how are you going to find tenants?
• 6:28
  And really what that comes down to is why are people living there and do they have employment and therefore are they looking for a house to live in?
• 6:36
  And so your point of saying, you know, making sure that it's an area that is going to have people living there, wanting to rent, earning money, is just thinking about is there diversified employment to make sure there's a big pool of different people that would live there.
• 6:52
  If everyone in a small town is employed by an oil company and the oil company closes down, really problematic for your investment.
• 6:58
  Yeah, correct.
• 6:59
  So you want something that's got a little bit of, maybe a bit of tourism, maybe a bit of agriculture, maybe a manufacturing hub.
• 7:06
  that sort of diversification is going to mean it's a less risky investment for you over the long term.
• 7:10
  Yeah, diversified employment just by itself isn't sufficient.
• 7:14
  You also need population growth going into the future.
• 7:17
  So a really good predictor of future population growth is historical population growth.
• 7:22
  So has that town or centre grown over time?
• 7:25
  And is there still new housing going in there?
• 7:27
  That is a really good indicator that there's going to be future growth.
• 7:30
  Do people want to move there and live there?
• 7:32
  And is that still occurring?
• 7:34
  So if you're seeing new subdivisions, new housing going in, that's a really good indicator.
• 7:39
  On top of that, what you can also look out for is an investment in a particular area.
• 7:44
  For example, new roads, maybe new trains or something that's going to have a positive
• 7:49
  impact on that area.
• 7:50
  And you can get in front of the curve in terms of investing before maybe that positive impact
• 7:55
  happens.
• 7:55
  For example, in a UK context, maybe, you know, with the high speed rail, I don't know if
• 8:01
  it's still going ahead, but that was sort of going to connect London up to the Midlands, right?
• 8:04
  And
• 8:04
  so you're going to see sort of, I would expect, an improvement in house values and people wanting
• 8:08
  to live in those sort of the Midlands because it's going to be better connected to London.
• 8:12
  And therefore, you're going to see an improvement, ideally, in people wanting to live there.
• 8:16
  And
• 8:16
  therefore, that's going to flow through to property.
• 8:18
  In a New Zealand context, we see
• 8:20
  highways improve and make places more accessible to major centres.
• 8:26
  And therefore, you see more
• 8:27
  people living in those areas.
• 8:28
  And therefore, you're going to get decent population growth.
• 8:31
  Okay, that's really interesting.
• 8:32
  So population growth is a big one.
• 8:34
  It also sounds like transport and connections to other parts of a country is quite important.
• 8:39
  So if you were buying in a really remote part of a country that was really disconnected from everywhere else, is it going to be growing as a sort of secondary hub or a smaller place?
• 8:49
  Maybe not.
• 8:50
  So, yeah, whether it's motorways or public transport or more schools, I think all those types of things is such a good hint.
• 8:58
  But how would you actually go about finding that information?
• 9:01
  Because it's not exactly like, I mean, other than talking to Colleen from down the road and being like, what's going on around the town?
• 9:09
  Like, how do you know that stuff?
• 9:10
  You keep an eye on what's happening.
• 9:12
  You know, new roads going in.
• 9:13
  You see the politicians love to get on the news and sell what they're doing.
• 9:17
  So you can sort of see that sort of stuff that's going on in terms of infrastructure.
• 9:21
  That's really relatively easy to see.
• 9:23
  And then you can do the research in terms of looking at population growth.
• 9:27
  What has, insert town name here, grown over the last 10 years and what's it?
• 9:31
  Each council do also do predictions on what their population growth is going to be because
• 9:36
  they need to plan for the services they provide.
• 9:38
  And so you can get some really good information now on what areas are growing at what rates.
• 9:42
  Can we talk about red flags?
• 9:44
  When it comes to looking for a place to invest in property, let's say you've looked and there is infrastructure going in and there is population growth and you do think there's diversified employment.
• 9:55
  Are there any red flags outside of that that would be like, OK, maybe that's a bad idea?
• 9:59
  Yeah, correct.
• 10:00
  Because each, depending on the size of the town and location, there's going to be more desirable areas and there's going to be less desirable areas.
• 10:08
  That's pretty common across the world.
• 10:10
  And so even within a town, there may be streets or suburbs that you just may want to avoid.
• 10:18
  For me, the red flag is, you know, what sort of tenant am I going to be able to get into this
• 10:24
  property?
• 10:24
  Ultimately, you're buying this property for the long term and you want them to look after
• 10:27
  the property.
• 10:27
  You don't want to get a tenant in there and then have to refurbish the place
• 10:30
  because they've trashed it.
• 10:31
  And so if you're not able to get an acceptable quality of tenant,
• 10:36
  then it's a no from me.
• 10:38
  Not only that, you also do need to have one eye on when you're going to
• 10:41
  sell this property because you are going to sell this property one day.
• 10:43
  And if you've got a gang,
• 10:45
  a street over or your neighbours, it's going to be relatively hard to sell that property because
• 10:50
  most people don't want to live next to a gang.
• 10:53
  And so those are sorts of the things which I look at
• 10:56
  in terms of what are the tenants that I'm going to be able to attract and am I going to be able
• 11:00
  to sell this property for a decent profit or an acceptable level down the line without too
• 11:05
  much challenge.
• 11:06
  Again, how would you sense check that?
• 11:09
  Yeah, speaking to locals is ultimately the
• 11:12
  best way to understand what's going on in that specific street, in that specific suburb,
• 11:16
  and identifying if there's anything that you should be concerned about.
• 11:19
  I do that through
• 11:20
  speaking to the real estate agent.
• 11:22
  Is there anything you know about the street that I
• 11:24
  should be aware of?
• 11:25
  And asking those sorts of questions.
• 11:27
  You only can identify this,
• 11:29
  especially when you're investing remotely through local knowledge.
• 11:33
  And so it's having
• 11:34
  lots of conversations and bringing those sorts of things up to the surface before you end up buying.
• 11:39
  Okay.
• 11:40
  I feel like that's really helpful and probably something that a lot of people don't
• 11:44
  think about when it comes to buying property because it is really different to buying property
• 11:47
  you're going to live in versus invest.
• 11:49
  So just keep that in mind throughout this whole conversation
• 11:51
  we're specifically talking about investment properties.
• 11:55
  And this I think is really universal.
• 11:57
  Wherever you are in the world, if you're wanting to buy an investment property, all these things
• 12:01
  still stand, whether it's in the UK, in Australia, you want to buy an area that has ideally long-term
• 12:08
  value but let's just say someone's really confident with the town or the city and then it comes down
• 12:13
  to like narrowing it into the suburb i guess how important is the actual street and what are some
• 12:18
  ways that you can ensure that the place that you're buying you're kind of doing as much research as
• 12:23
  you can to make sure you're not brought on the like the dodgiest street in the nicest area yeah
• 12:28
  yeah broad statement is you want the best possible suburb within your budget that's you know it
• 12:34
  It doesn't have to be absolutely the nicest suburb in a particular area,
• 12:38
  but the best possible suburb you can get is generally the goal.
• 12:41
  Why is that?
• 12:42
  Each suburb or area has a max ceiling in terms of what a really nice three-bed property is going to be worth, right?
• 12:50
  Like a three-bed property in Mayfair is going to max out, I don't know, 20 million pounds.
• 12:54
  A three-bed property here in Hackney, I don't know, what's it going to max out?
• 12:57
  A million pounds or something like that.
• 12:59
  And so if you can get a better area, it enables more potential upside in terms of when you renovate that property so you don't hit that ceiling.
• 13:08
  So is that like if, for example, you bought in an area that is traditionally not super valuable?
• 13:13
  It doesn't matter how nice the house is, you may actually just not be able to sell it for more than that simply because of the area you're in.
• 13:18
  Correct.
• 13:19
  If you picked up a really nice property in a really nice area and plonked it in a less desirable area, it's not going to be worth the same.
• 13:26
  It's going to max out at a far lower end value.
• 13:29
  And so that's why we want to go for the best possible area because those top end values are going to be higher.
• 13:34
  So it just provides you more headroom in terms of when you're renovating to get the best possible outcome in terms of a net equity gain.
• 13:39
  So that's why the best suburb possible is what we really want to target.
• 13:44
  We've also got avoiding the highly stigmatized areas, whether that's because there's gangs on the street or whatever.
• 13:50
  We obviously want to avoid those.
• 13:51
  Then you've got to think about school zones.
• 13:53
  That can be really important in terms of where, if someone is living here, where can they go to schools?
• 13:59
  And I think the reason that, just to mention, when it comes to types of houses that we've done with this investing approach, you're not buying a one bedroom.
• 14:07
  Ideally, it's a house that a young family can live in.
• 14:10
  And so when you think about the types of people that are going to rent the house, if they have young kids, they're going to want to look at school zones and where they can send their kids.
• 14:18
  So the proximity to good schools is a really big piece for increasing the pool of people that might want to rent the property.
• 14:25
  Also then you've got proximity to things like jobs and employment, how close is it to get into town and things like that, parks, things for people to enjoy, access to motorways and things like that.
• 14:37
  And then you've got the things which you also want to avoid, the main roads, train tracks, power lines and things like that, that are going to make that place less enjoyable to live and enjoy for your tenants.
• 14:49
  Okay, so let's say we like the area.
• 14:51
  Yep.
• 14:52
  we're standing outside the property we think okay we're on to a winner here i think we're
• 14:56
  on to a winner what is going through your head to actually make you think yes this is a winner
• 15:01
  yeah so we're happy with the location we're outside on the driveway first and foremost
• 15:06
  does the house look like weird or just does it look like a normal house which may sound
• 15:10
  really crude and basic but ultimately when you're looking at a house what does your gut tell you if
• 15:16
  your immediate reaction is, oh, that's a bit of a funny looking house.
• 15:19
  Typically, I avoid that house.
• 15:22
  You may be able to make money on it, but you're ultimately going to sell this house down the
• 15:25
  line to someone and they're also probably going to have that same reaction.
• 15:29
  So just looking for a house which just looks kind of normal and it has nice what we call
• 15:34
  street appeal, which is does it just look nice or is it a weird shape flat roof?
• 15:38
  That's first and foremost is what's your initial reaction of the house.
• 15:42
  Now, don't get me wrong.
• 15:43
  We're not going for an architectural masterpiece here, but does it look like a normal house that you would want to maybe live in yourself?
• 15:50
  And I think actually if we were to just zoom out on investing in general, if the idea here is to sell the property down the line, which ideally it is with property investing, if you're choosing a house that I don't know looks a tiny bit weird and you have a visceral reaction to like, that's a really hideous chimney or whatever, you're narrowing the pool of potential buyers.
• 16:12
  So in all of these decisions, whether it's location, whether it's is it near a school, has it got good employment, it's trying to keep the pool of people that can rent it but also buy it as broad as possible, right?
• 16:23
  Yeah, correct.
• 16:24
  You do have to have one eye on the future because you're going to have to sell this property down the line maybe 20, 30 years.
• 16:29
  But if you've got something that's a little bit weird and it's going to put people off, then yeah, you just reduce your buyer pool, which less demand, it's going to be less people who want to buy this house off you.
• 16:38
  So that's the first thing.
• 16:40
  You then look around the property.
• 16:43
  So the section's important in terms of is there area to enjoy this property?
• 16:48
  You know, as we mentioned before, a family's going to live in this property,
• 16:50
  so is there somewhere where the kids can run around?
• 16:53
  Is there somewhere to park the cars off the street?
• 16:56
  Off-street parking's really important.
• 16:58
  Are there any hazards, immediate hazards?
• 17:01
  What I mean by that is maybe banks that could fall on the property, for example.
• 17:05
  Oh, my God, I thought a bank, like a bank bank.
• 17:08
  A steep slope.
• 17:09
  A steep slope, trees, are there any large trees that are going to become an issue that could fall on your property or are going to be expensive for you to get rid of?
• 17:20
  Are there any undesirable things, power lines, train tracks nearby?
• 17:24
  All of these things which are going to reduce the ability for your tenants to enjoy the property because ultimately you want your tenants to be in there for a long time and enjoy it.
• 17:31
  And then obviously you're going to put people off down the line.
• 17:34
  We're then looking also, is there any deferred maintenance?
• 17:37
  What I mean by that is, is there anything which hasn't been looked after and maintained
• 17:41
  that when you own this property, you're going to have to come in and do?
• 17:43
  For example, maybe the roof needs replacing or the deck is rotten.
• 17:48
  Is there anything like that that you're going to have, is going to become your problem as
• 17:52
  soon as you own the property?
• 17:53
  We're also looking at the materials.
• 17:54
  What is the property made of?
• 17:56
  Because if you're owning this property for 20, 30 years, what the property is made of
• 18:01
  is going to have a large impact on what it costs you to maintain and look after this
• 18:04
  property.
• 18:05
  For example, brick, fibre cement cladding in a New Zealand context is really good.
• 18:11
  Low maintenance, it doesn't rot, you don't have to look after it.
• 18:14
  Versus timber weatherboard, you have to paint it and maintain that.
• 18:18
  And so it's not that we wouldn't buy a timber weatherboard house,
• 18:21
  but you just want to be considerate and think of what's it going to cost to look after this property
• 18:26
  once you own it because it becomes your problem once you own it.
• 18:29
  Is house design layout important or would you say it's lesser?
• 18:35
  So it's less important than if you're going to live in it yourself, because that will be really important, maybe important to you, but it still needs to be functional and enjoyable.
• 18:45
  Because as I mentioned, you're going to want your tenants to stay around.
• 18:49
  And so the property needs to be functional and acceptable in that sense.
• 18:54
  You know, we don't really want a small, tiny kitchen way at the back of the house and then the living area completely at the other end of the house.
• 19:01
  That's not how we like to live in 2026.
• 19:05
  We typically like sort of open plan living, living, kitchen, dining, all relatively close
• 19:09
  together.
• 19:09
  So yes, it is important in terms of when we go in the house, what are we looking for?
• 19:13
  Yeah, the layout is important in terms of what I've just mentioned.
• 19:17
  And also, is there any dead space that we can add a bedroom potentially?
• 19:20
  That's what we're ideally looking to do.
• 19:22
  Helps with getting more rent because you convert a three to a four, you can get more rent for
• 19:28
  that property.
• 19:28
  And so that's important as well.
• 19:30
  We're also then looking for warning signs.
• 19:32
  What I mean by that is, are there any signs of leaking on the ceilings, for example?
• 19:37
  Is there any asbestos in the property?
• 19:39
  We're sort of looking out for those things as well.
• 19:42
  Are those sorts of things like asbestos or contamination, is that stuff you can tell by just looking around?
• 19:47
  Or is it more you need to get an inspection for stuff like that?
• 19:50
  Not with 100% accuracy, but you can 95% accuracy.
• 19:56
  For example, with asbestos, there's a type of ceiling that's called popcorn ceiling.
• 20:01
  Oh, I know the one you mean.
• 20:02
  Yeah, if you see that.
• 20:03
  It looks like weird, bubbly concrete kind of, right?
• 20:06
  Yeah, and if that's got sparkles in it, more than likely that's going to be asbestos.
• 20:10
  You can look for it, but then also you need to get it tested to make sure.
• 20:14
  I feel like, because do you remember I sent you that link?
• 20:16
  There was a property I was looking at in London, and it had some weird Japanese plant growing all in it.
• 20:22
  Japanese knotweed.
• 20:23
  That was obviously given in the description, and that's why I think it was selling for quite a long amount.
• 20:28
  It was going to be like £50,000 to sort out or something crazy, wasn't it?
• 20:31
  Yeah, it was really expensive.
• 20:32
  But point is, do you legally have to say stuff like that?
• 20:37
  Or is it kind of up to the buyer to figure out?
• 20:40
  Because they obviously were really overt, but are some people not?
• 20:44
  I can't speak to a UK context, but in New Zealand, the vendors and the selling agent have to disclose what they know about anything material about that property.
• 20:52
  So if there's asbestos, they will typically disclose it.
• 20:55
  If there's been a leak or if the property's flooded, they'll have to disclose that for you.
• 21:00
  Now, you know, agents being agents, maybe they won't disclose everything.
• 21:04
  And so you do need to do your own due diligence and make sure you're comfortable with the
• 21:08
  property and don't just rely on what the real estate agents told you.
• 21:11
  Are there any more subtle, yeah, structural or design features that maybe beginner property
• 21:18
  investors may not be aware of?
• 21:20
  Yeah, firstly, well, if I see a major addition, that always makes me a little bit nervous.
• 21:25
  Do you mean like a big side house that's been added on top of it or something?
• 21:29
  Maybe not on top, but they've added two bedrooms onto the side of the house.
• 21:33
  So they've gone from a 100-square-metre house to a 120-square-metre house.
• 21:36
  They've added a significant portion to that house.
• 21:40
  And you'll typically see that in a change of materials, maybe.
• 21:43
  Maybe they've gone from the original house.
• 21:45
  You'll see it's like timber weatherboard, and then they change to a different material.
• 21:48
  That's the first thing that you notice to see or spot that there has been some pretty significant work.
• 21:55
  And why that makes me nervous is it just introduces risk to the property in terms of where that
• 22:00
  addition joins that house.
• 22:02
  Typically, that's treated as a high risk join.
• 22:05
  Water can get in there depending on how it's been built and depending on when it was built
• 22:09
  as well.
• 22:10
  If that addition was done back in the 1970s, the standards were a little bit more loose
• 22:14
  back in the 70s, so it may not have been done to the best possible standard as if it was
• 22:18
  done today.
• 22:19
  And so it just introduces risk because water can get in there, rot the framing and have
• 22:24
  a pretty negative impact on that property.
• 22:27
  And so that's a high risk item for me.
• 22:29
  Also,
• 22:30
  areas below ground level, so basements and things like that are high risk because waterproofing was
• 22:37
  maybe not the best back in the day.
• 22:39
  And so you get water ingress through the wall.
• 22:41
  And so that
• 22:42
  can be really hard to fix.
• 22:44
  There may not be a solution as well.
• 22:45
  So anything below ground level,
• 22:47
  also a bit of a red flag for me.
• 22:49
  And so do you mean like, for example,
• 22:50
  if there's like sort of a basement that's a bit dingy and dark it probably needs a lot of work
• 22:55
  for it to be livable or comfortable for people yeah there's a light component to it which there's
• 22:59
  requirements in and around that but it's more just if there's soil right up against the side of the
• 23:03
  house that can the water can then seep through that wall into the house and make a very damp
• 23:09
  area very hard which then can get moldy and very hard to to keep as a warm dry space it's so
• 23:15
  annoying so much of the stuff that it's like it's really specific to building and renovating and i
• 23:21
  do think that it's you know the more that you work in that space to be honest any space you start to
• 23:28
  see patterns of things that become red flags and then you think okay that's that's dangerous that's
• 23:32
  not ideal if you don't have experience with this i just i feel like the sort of thing that you would
• 23:37
  walk in and see and be like oh no no no it's so different the perspective someone has if they've
• 23:42
  not worked in this area for a long time.
• 23:44
  Yeah, well, the number of building inspection reports
• 23:47
  I've seen now, you just know what to look out for.
• 23:49
  You know what's going to get flagged from
• 23:50
  the building inspector.
• 23:52
  And so you can look out for those things before you necessarily have to
• 23:55
  go into DD because you're like, oh, that's going to get flagged, that's going to get flagged.
• 23:58
  So
• 23:58
  you can sort of check those things out.
• 24:00
  So, okay, let's talk about consents.
• 24:02
  This is something that
• 24:03
  I think a lot of investors get caught out on.
• 24:05
  Why do you need consent?
• 24:07
  Who are you getting
• 24:08
  consent from and and I guess what do you think would be some top line really important things
• 24:14
  for people to know if they're wanting to invest in property and feel a little bit disconnected
• 24:19
  or confused with consent in general yeah so consents in general to do certain things with
• 24:25
  with your own property you need consents from from the local council in a New Zealand context
• 24:29
  I think it's the same here in in the UK and so there's certain things you can do without consent
• 24:34
  but there's certain things that do need consent.
• 24:36
  And so understanding what you can do without
• 24:39
  consent and understanding what needs consent is really, really important because obviously that's
• 24:43
  going to enable you to identify if a property has got the appropriate consents or not.
• 24:49
  So that's the
• 24:49
  sort of high level stuff.
• 24:51
  In terms of how you go about identifying what has got consent and what
• 24:55
  doesn't have consent, yeah, typically you'll get the information from the council, which has all
• 25:01
  the building files and the information about that property and you match up what is the property
• 25:06
  you're purchasing, what's currently there versus what's on the consents and make sure they align.
• 25:11
  If something doesn't align, that's when you've got a problem and that's where you have to figure
• 25:14
  out what is the solution to that problem.
• 25:17
  So would an example be you go and visit a property,
• 25:19
  it's got a garage or an outhouse and then you're looking at what you got from the council and it
• 25:24
  doesn't have any record of there being an outhouse that was built without consent and therefore you
• 25:28
  might have an issue.
• 25:29
  Bang on.
• 25:30
  Yeah.
• 25:30
  And garages are a good example.
• 25:32
  Very often they don't have
• 25:34
  consent.
• 25:34
  People just used to put them up.
• 25:35
  They're not that big a building, so people just throw them
• 25:38
  up.
• 25:38
  But you do need consent.
• 25:40
  And therefore, in the eyes of the council, in the eyes of your insurer,
• 25:43
  it's unconsented works, which can then become problematic.
• 25:46
  And so you either have to tear that
• 25:48
  down or you could just leave it.
• 25:51
  That can become an issue for your insurer.
• 25:53
  Or you have to get
• 25:54
  retrospective approval, which you can do in a New Zealand context.
• 25:58
  Right.
• 25:58
  So ideally, if you're looking at a property, the consents match.
• 26:03
  Ideally, 100%.
• 26:04
  And if you are buying something with unconsented works, you really need to know
• 26:09
  what you're doing.
• 26:10
  You can rectify it, but some things you can't rectify.
• 26:14
  So it does carry a lot
• 26:16
  of risk.
• 26:17
  Purchasing a property with unconsented works can be done.
• 26:20
  It is risky, and therefore,
• 26:21
  you will get a discount on that purchase price when you buy a property with unconsented works
• 26:25
  because it's going to become your problem and your liability once you buy that property.
• 26:29
  Can you be as humble of what that would mean?
• 26:31
  So let's say I bought a property and I thought,
• 26:33
  brilliant, great.
• 26:34
  But then, and let's say I knew, I knew that there was an outhouse that
• 26:38
  had been built without consent.
• 26:40
  When you say it's your responsibility or liability,
• 26:43
  what is like a worst case scenario for that?
• 26:45
  Or like, what does that actually mean?
• 26:47
  A garage probably isn't the best example because not too much is going to go wrong.
• 26:52
  Well, touch wood.
• 26:53
  But I'll use an example of an internal renovation maybe.
• 26:58
  So let's say you purchased a property and it has a downstairs bedroom and it just looks like a bedroom.
• 27:04
  But actually the plans show it as a garage.
• 27:06
  And so that bedroom can't legally be marketed and used as a bedroom.
• 27:11
  And so when you go to sell that house, let's say, including that downstairs bedroom, it's four beds, but the property is legally only three beds.
• 27:19
  You're legally only going to be able to sell that house as a three-bed property to someone.
• 27:23
  And so it's going to have a financial impact on you.
• 27:27
  Not only that, depending on what they've done and how they've done it may make that property uninsurable in the eyes of the insurer.
• 27:33
  Oh, God.
• 27:33
  And just for anyone that doesn't know, being uninsured is like the worst thing ever.
• 27:37
  Yeah.
• 27:38
  Like so, so dangerous.
• 27:39
  you would never want to, I'm pretty sure you can't even get a mortgage if you don't have insurance, right?
• 27:43
  You can't get a mortgage.
• 27:45
  And so if something then happened, and then let's say something happened to that property
• 27:48
  and they found out that you had done these works or maybe the previous owner had done them,
• 27:53
  but because you own the property, it's your problem, then they may not give you insurance.
• 27:57
  So that's where it can become problematic.
• 28:00
  And the garage, it's not too bad.
• 28:02
  Hopefully nothing's going to go wrong with an external garage, but it's still unconsented.
• 28:06
  And so you'll still need to let your insurer know that it's unconsented.
• 28:09
  And that may create some challenges.
• 28:11
  One of the things that you talk about a lot is the idea of finding a property to buy as an investment that is the right amount of shitty.
• 28:19
  And I think this is such a great kind of fun, easy thing to remember, especially if you're new to this type of property investing.
• 28:28
  Can you talk about how shitty is too shitty?
• 28:32
  And what are the types of things that, you know, you might say, okay, actually, like, this is just too shitty.
• 28:38
  Let's avoid.
• 28:38
  Yeah.
• 28:39
  Should I trademark that quote?
• 28:41
  Yeah, I think so.
• 28:42
  I think it might need to be the right amount of shitty for Peter West.
• 28:46
  I don't know about your upbringing, but when I think about the perfect property, I think about my grandparents' house.
• 28:52
  Cute.
• 28:53
  Like they had maybe some funky wallpaper or they had some real old retro carpet, and that's what we want.
• 28:59
  We want something that's been well looked after.
• 29:02
  You know, grandma and grandma, they got the house washed every year and they looked after the gutters.
• 29:05
  The house washed, buddy.
• 29:07
  But they don't need a new bathroom.
• 29:08
  Well, they didn't need a new kitchen.
• 29:10
  Do you know what I mean?
• 29:10
  So when we find that type of property, that is absolutely nirvana
• 29:14
  because we can come in there and just do cosmetic renovations.
• 29:16
  What I mean by cosmetics, paint the place, put in a new kitchen,
• 29:18
  put in a new bathroom, carpet, et cetera, et cetera, new lights.
• 29:23
  What we don't want to do is do things which people just expect.
• 29:28
  People just expect there to be a roof and it works.
• 29:31
  Do you know what I mean?
• 29:31
  No one goes, oh, nice roof.
• 29:33
  Love this roof.
• 29:34
  Do you know what I mean?
• 29:35
  People just expect the foundations to be okay.
• 29:38
  If you go and replace the piles, people are going to go, oh, cool story.
• 29:42
  Foundations.
• 29:43
  Should we say foundations?
• 29:43
  Is it the sticks that hold the house up?
• 29:45
  Yeah.
• 29:45
  Okay.
• 29:46
  Foundations.
• 29:48
  So those things that are just like, it's just baseline, you know?
• 29:51
  And it's, I guess, because we looked at a property that had quite a shitty roof and
• 29:55
  you did flag that.
• 29:56
  You were like, this is not an ideal thing to have to replace because people assume your
• 29:59
  roof should be good and working and fine.
• 30:01
  It's that kind of thing, right?
• 30:03
  That kind of thing.
• 30:03
  Or cladding, really expensive.
• 30:06
  If you have to redo cladding, if the whole house of the cladding is really buggered, that's expensive.
• 30:10
  Joinery is expensive.
• 30:11
  Which is what again?
• 30:12
  Windows.
• 30:12
  If you have to replace windows, pretty expensive.
• 30:15
  So those types of things that are relatively expensive, but people don't, it's not a wow factor.
• 30:20
  You don't walk in the house and go, versus a kitchen.
• 30:24
  You know what I mean?
• 30:24
  If you've got a really nice kitchen, people go, oh, wow, this house is nice.
• 30:27
  But a window is a window.
• 30:29
  And so those are the types of things where we typically try and avoid them.
• 30:34
  Now, everything can work for the right price.
• 30:37
  Do you know what I mean?
• 30:38
  But it's not ideal, if that makes sense.
• 30:41
  Ideal is just cosmetic.
• 30:42
  Grandpa and grandma's house, you come in and you renovate it.
• 30:45
  Cosmetic renovation.
• 30:47
  But there's no rot you have to deal with.
• 30:49
  There's no failing roof.
• 30:51
  The house is nice and flat and you don't have to do anything with the foundations.
• 30:54
  When we find that, we're happy campers.
• 30:56
  Okay.
• 30:57
  Love it.
• 30:58
  If someone was on their way to look at a property,
• 31:01
  Like let's say this weekend they've booked in, off they go, very exciting.
• 31:06
  What would you say are some of the mental checklists that should run through their head?
• 31:10
  Or even honestly take a notepad and make sure you've gone tick, tick, tick.
• 31:14
  These are all the things that I should look out for, think about.
• 31:16
  Again, this is not for your dream home.
• 31:18
  This is for your investment property.
• 31:20
  What should be on their checklist?
• 31:22
  First and foremost, you're outside the house.
• 31:23
  Does the house look okay?
• 31:24
  Is it ugly?
• 31:25
  Do you get a bit of an ick in your stomach?
• 31:27
  Sense check.
• 31:28
  Whoever you go with, what do you think?
• 31:30
  Does this look fine?
• 31:31
  Are there any skid marks on the road?
• 31:32
  Oh, my God, you didn't go there.
• 31:35
  Oh, my God, because this shows boy races.
• 31:38
  Boy races, yeah.
• 31:38
  Oh, my God, no skiddies.
• 31:40
  Get your head out of the gutter.
• 31:41
  Love it.
• 31:43
  And you don't even have to go to the property to do that.
• 31:45
  Google Maps these days.
• 31:47
  That's my first thing I do.
• 31:49
  Just look at the street.
• 31:50
  Are there people doing burnouts on the street?
• 31:52
  If so, probably not the spot.
• 31:55
  Then you're looking around.
• 31:56
  Is anything going to fall on the property?
• 31:57
  Trees, a hill or a slope?
• 32:00
  did we call it before?
• 32:02
  What are the neighbours like?
• 32:04
  Are there cars out front?
• 32:05
  Are there dogs
• 32:06
  barking?
• 32:07
  Just what is the general vibe of the place?
• 32:09
  Then in terms of your checklist, what is
• 32:11
  the condition of the outside of the property?
• 32:14
  Are we going to have to spend any money on the outside
• 32:17
  of the property?
• 32:18
  Typically, we want to try and avoid anything on the outside.
• 32:22
  So just noting
• 32:23
  that.
• 32:23
  You're then into the inside of the property.
• 32:26
  Is this property going to be enjoyable?
• 32:29
  Could I
• 32:29
  live here?
• 32:30
  In theory, if I put my hat on in terms of the layout, and is it, are my kids going to be
• 32:34
  able to enjoy running around?
• 32:35
  And am I going to be able to cook and look after them?
• 32:38
  Just pretend
• 32:39
  to be the tenant for a minute.
• 32:41
  And then we do still want to add a bedroom.
• 32:43
  So can we add a
• 32:44
  bedroom?
• 32:45
  We don't always have to do it.
• 32:47
  But it is, if we're being a bit picky, it definitely is
• 32:50
  ideal.
• 32:51
  And then red flags, question mark, is there any stains on the roof?
• 32:55
  Is wallpaper coming off?
• 32:58
  Does it look like there's any water issues in terms of leaks and things like that?
• 33:02
  Just anything you're like, oh, that's a bit of a red flag for me.
• 33:06
  And then that also includes the asbestos.
• 33:07
  Checking for vinyl asbestos, obviously you need to look.
• 33:10
  If you don't know what you're looking for, Google can be your friend here.
• 33:13
  And then popcorn sealing is a biggie as well.
• 33:17
  In terms of, yeah, just the condition of the property, is it insufficient?
• 33:22
  Because obviously I'm referring to we're doing a renovation-based approach here.
• 33:25
  is it sufficiently tired that we can renovate it there's no point going to a house if it's already
• 33:30
  new do you know what i mean because we're not going to be able to renovate it because the the
• 33:34
  buyer the owners are going to want to be paid for the property in its nice condition so we need it
• 33:39
  to be sufficiently tired that we're going to be able to come in and it makes sense to put in a
• 33:42
  new kitchen a new bathroom shitty but not too shitty shitty but not too shitty those are probably
• 33:47
  the the really important things as well as are there any high-risk design items have there been
• 33:52
  any additions or does it look like something's changed about this property from its original
• 33:58
  footprint of how it's created?
• 34:00
  It's probably the first things which I would go through and then
• 34:03
  obviously you get into more detail after that but if the immediate checklist that's what I'll be
• 34:07
  going through.
• 34:08
  Pete you've worked with me now on two houses and people obviously can work with you
• 34:12
  to do this if they don't feel confident with the checklist and doing it themselves but you've also
• 34:17
  worked with a couple of people from the Curve audience and I just wondered if we could use,
• 34:21
  Is there any examples of people you've worked with, maybe could be like almost a real life example of these were all the things that you looked at and what ended up happening with the house or like how much money they managed to make?
• 34:33
  Yeah, absolutely.
• 34:34
  Lara and Joe.
• 34:35
  Okay.
• 34:36
  Shout out Lara and Joe.
• 34:37
  Hello.
• 34:37
  Oh my God, Lara and Joe, hi.
• 34:38
  Don't mind me talking about your property.
• 34:40
  I won't give specifics, but we found them a property ham east.
• 34:44
  So firstly, ticks the boxes in terms of location, pretty desirable.
• 34:48
  No skid marks.
• 34:48
  You know, it's a really nice family.
• 34:51
  location in terms of that.
• 34:53
  So, and then in terms of the property itself, lovely bungalow, single
• 34:57
  timber weatherboard property.
• 34:59
  It just looks nice from the road.
• 35:02
  So that first tick, tick.
• 35:04
  Downside about the property, if we're being a little bit picky, timber weatherboard house,
• 35:08
  paint was a little bit old on the outside, but not the worst.
• 35:11
  Like we didn't have to repaint
• 35:12
  the outside of the property, but they're aware that they're going to have to paint that property
• 35:17
  in maybe three to five years or something like that.
• 35:20
  Also, the roof condition,
• 35:22
  that was something we picked up towards the end of its life.
• 35:25
  Probably going to get maybe three, five years out of it,
• 35:28
  hopefully, if we can extend it.
• 35:30
  So those were some of the things
• 35:31
  which were sort of the downsides of that property.
• 35:34
  But on the inside of the property, why did we like it?
• 35:38
  Condition was pretty good.
• 35:40
  We didn't have to reline any walls.
• 35:43
  It was pretty tidy.
• 35:44
  there was no rotten flooring or anything like that there were no big red flags that we could see in
• 35:50
  terms of too many roof leaks or anything like that so just a nice tired property on the inside
• 35:57
  sufficient size as well like it was able to be enjoyed decent little kitchen nice little lounge
• 36:02
  three beds just a house that you could see hey I could live here quite easily so and then flat
• 36:08
  section as well sorry to jump back outside flat section easy to maintain not too much garden so
• 36:14
  It just ticked all the boxes.
• 36:16
  So yeah, we managed to get it under contract for them.
• 36:18
  Bit of haggling back and forward in terms of the roof
• 36:20
  and how much we could get off from the vendor.
• 36:23
  But we got to a point where we were happy that,
• 36:27
  yes, we know that this may come,
• 36:29
  but we've allowed for it in our budget.
• 36:30
  So we got it under contract for 525 in the end,
• 36:34
  which for Ham East is pretty good going.
• 36:36
  Where's Ham East?
• 36:37
  Hamilton East.
• 36:37
  Oh, got it.
• 36:38
  So yeah, one of the more desirable spots in Hamilton.
• 36:42
  And so for anyone that's not in New Zealand,
• 36:43
  This is a suburb that's kind of outside of one of the big main centres.
• 36:47
  It would kind of be like maybe Bristol or something.
• 36:49
  Manchester.
• 36:50
  Yeah, it's still a pretty popular, growing, big hub.
• 36:55
  You're not in the middle of nowhere, for sure.
• 36:57
  Yeah, so we got under contract 525, straightforward cosmetic reno with this one, which is what we love.
• 37:03
  We didn't have to do anything outside of the cosmetics in terms of, you know, we painted the place,
• 37:09
  new kitchen, new bathroom, new flooring, upgraded the lighting,
• 37:13
  upgraded all the faceplates and things like that.
• 37:15
  70,000.
• 37:16
  Did you add a bedroom?
• 37:17
  Didn't add a bedroom on this one.
• 37:19
  And you don't always have to add a bedroom in terms of to achieve
• 37:22
  significant equity gains.
• 37:24
  The size of the house is more important than the number of the bedrooms.
• 37:28
  So, you know, the larger the house, the better.
• 37:31
  So 110 square metre house is better than a 90 square metre house.
• 37:34
  So this one was around 95, so an acceptable level.
• 37:37
  I don't typically go anything below 90 because it starts to restrict how much equity gain you can achieve.
• 37:43
  So yeah, cosmetic reno, 70 or 71k I think we spent on the reno there or thereabouts.
• 37:48
  So we got it for 525, spent 70, 71 on the reno I think.
• 37:53
  And then it revalued at 715 after a six-week cosmetic reno.
• 37:57
  So I think their net gain, what's that, 115, 125?
• 38:01
  That's pretty good.
• 38:02
  Someone do the numbers.
• 38:03
  Sorry, I should have done it before I came in.
• 38:04
  That's pretty good.
• 38:05
  But yeah, right up there, really happy, easy to tenant as well.
• 38:10
  So they got a tenant, I think, and they were in there within a week of it being finished.
• 38:14
  Wow, amazing.
• 38:14
  So pretty good result.
• 38:15
  So yeah, that was an awesome result for one of your Curve listeners.
• 38:20
  Amazing.
• 38:20
  Not the only one.
• 38:21
  So we've got some really good results, which is awesome.
• 38:24
  So awesome.
• 38:25
  I'm so, so excited to hear that.
• 38:27
  For anyone that is interested in this type of property, they can get in touch with you directly
• 38:32
  and just let Pete know that you're a curve listener
• 38:35
  and he will look after you.
• 38:37
  Maybe if you've listened to this, you might be like,
• 38:38
  oh my God, I'm not going to remember all these things.
• 38:41
  I think that there's obviously, you can do it by yourself for sure
• 38:44
  and hopefully this episode has given you enough
• 38:47
  to feel that you sort of know what you need to look for, think about,
• 38:50
  but also the beauty of this type of investment,
• 38:53
  especially because it's an investment.
• 38:55
  If you have someone that's targeting a specific outcome as profit,
• 38:59
  it that's the whole reason that your service exists and why I worked with you too um is because
• 39:06
  that's you get to work with someone that's a professional that knows what they're doing but
• 39:09
  then also you have like an obvious target that you're trying to achieve together which I think
• 39:14
  yeah for me that was like just so such a relief like I I don't think I would have wanted to do
• 39:19
  particularly my first or second one without help um but yeah thank you so much Pete no doubt we'll
• 39:24
  get you back on again and if anyone does um reach out to Pete please let us know it's so cool hearing
• 39:29
  stories like Lara and Joe where someone listened, thought maybe I'll try this and then actually
• 39:34
  made a hundred grand.
• 39:35
  Like that's so cool.
• 39:36
  Yeah.
• 39:36
  It's one of the best parts about the job is helping people achieve their financial goals.
• 39:40
  Gotcha.
• 39:41
  Yes.
• 39:41
  Really rewarding.
• 39:42
  It's so cool.
• 39:42
  And I work with a real broad range of people, which is pretty amazing too, right from people
• 39:46
  like buying their first home through to experienced investors.
• 39:50
  And so being able to just be a part of people's financial wellbeing and futures really, it's
• 39:56
  a privilege really.
• 39:57
  Yeah.
• 39:58
  Amazing.
• 39:58
  yeah for anyone that has questions on property investing anything that we've talked about
• 40:03
  you can either comment where you're listening like publicly i'm sure there's probably lots
• 40:06
  of people that have the same questions or get in touch with us directly if it's something
• 40:09
  personal that you don't want to share um but thanks pete talk to you soon till next time
• 40:15
  did you love this episode yes have you got property front and center in your mind
• 40:22
  Yes.
• 40:23
  Sounds like you're a five-year-old.
• 40:24
  I know.
• 40:25
  Now could be the time to take the first step towards what it is that you're wanting to buy,
• 40:30
  whether that's your first home, whether that's a new flat,
• 40:33
  whether it's, I don't know, buying another investment property.
• 40:37
  And thankfully, BNZ has the expertise and tools to help you get started,
• 40:41
  and their home loan partners are ready whenever you are.
• 40:45
  You can book an appointment.
• 40:46
  You can ask millions of questions.
• 40:48
  Trust me, that is totally fine.
• 40:50
  and you can start turning the property dream that you have into a plan and hopefully soon into a
• 40:55
  reality.
• 40:56
  I know from experience that this can feel quite overwhelming but when you're working
• 41:00
  with experts who can actually help you get there it's such a burden off your shoulders to know
• 41:06
  that you've got the advice and the tools that you need to actually make it happen.
• 41:09
  We know how hard
• 41:11
  it can feel and like overwhelming and just you know so like a fish out of water when it comes
• 41:16
  to buying property.
• 41:17
  So we're so thankful to BNZ
• 41:20
  to be helping us create
• 41:22
  and empower this podcast
• 41:24
  so that people can learn.
• 41:27
  And we just want you all to succeed.
• 41:28
  We want you all to succeed.
• 41:30
  We're all in your corner.
• 41:32
  And this is going to be
• 41:32
  such a game-changing
• 41:33
  property podcast series.
• 41:35
  Yes.
• 41:36
  And for anyone that is going
• 41:37
  through the process
• 41:38
  of either buying a house
• 41:39
  or a flat or whatever it is
• 41:40
  that you're trying to do,
• 41:41
  please let us know
• 41:42
  because we would love
• 41:43
  to be cheering you on
• 41:44
  from the sidelines.
• 41:46
  but thank you so much again to BNZ for empowering this podcast.
• 41:50
  Okay quickly the curve was created to empower and educate you about investing but we are not
• 41:54
  financial advisors.
• 41:56
  Our platform exists for educational purposes only and it doesn't provide
• 41:59
  personalized investing advice for your individual needs and should not be relied upon to make
• 42:03
  an investment or financial decision.
• 42:05
  And always remember to do your own research before making
• 42:08
  any investment or financial decision.
• 42:10
  We're here for any knowledge and support you need
• 42:12
  but the final call is always yours.
• 42:14
  And thanks for being here.
• 42:15
  You got this.
• 42:16
  Yeah, we know you got this.