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Transcript

Buying Property: What You Need to Know · The Curve

• 0:00
  Welcome to Raisin the Curve, a podcast designed to teach you everything that you need to know to be better with your money.
• 0:06
  Come and learn alongside me, Sophie Hallwright, a total beginner from the finance expert Victoria Harris.
• 0:12
  So I've asked all of the questions you wish you could so that finance, investing and growing your wealth actually makes sense.
• 0:18
  Yes, it's expert education but with promise will not be boring and in the wise words of sheer...
• 0:22
  My mom said to me, you know sweetheart, one day you should settle down and marry a rich man.
• 0:28
  I said, Mum, I am a rich man. Come and talk and learn and laugh with us because together we really can raise the curve.
• 0:36
  Gosh, we are very proud to be partnering with Trade Me for this property mini series.
• 0:40
  So for anyone that has followed the curve for a little while, I have spoken about my property buying journey quite a bit
• 0:48
  to the point where people are like, what is happening? What is taking so long?
• 0:52
  We are doing a three part podcast mini series in partnership with Trade Me Property.
• 0:57
  And whilst I'm not quite there yet on the actual purchase part which we will get to for the rest of this episode,
• 1:03
  what I have been doing in the meantime is dream scrolling and dream scrolling,
• 1:07
  being looking through all of the amazing properties that are available on Trade Me Property
• 1:12
  because there are more properties there than there are anywhere else.
• 1:15
  And so this has been quite exciting for me.
• 1:18
  You know, I've been looking at, I mean, let's be honest, things are quite out of my budget right now.
• 1:23
  But to see what's available from like seaside escapes, which you know, one day I'll get there,
• 1:29
  to like amazing properties that are available in the CBD all centers of towns in New Zealand,
• 1:35
  it really is the best place to see absolutely all of my potential options.
• 1:40
  So if you are in a position where you're thinking, do you know what?
• 1:44
  I'd love to buy a property or I'm interested in what's happening in the property market.
• 1:48
  And I want to know what things are going for them. Trade Me is the place to look.
• 1:51
  So thank you so much to Trade Me Property for empowering this conversation.
• 1:55
  And why not open endless doors with Trade Me Property?
• 1:59
  You can download the app on iOS or jump on your web browser,
• 2:03
  have a good old dream scroll. And if you see any good ones, please flip them my way.
• 2:11
  Hello, this is our third installment of our Trade Me Property mini series,
• 2:17
  which has been so much fun.
• 2:20
  Honestly, it makes me think we need to have an ongoing podcast that is talking about property.
• 2:24
  There is just so much to talk about.
• 2:27
  But in this particular podcast episode, it's actually a live event.
• 2:31
  So we did this last week at the Trade Me Officers.
• 2:35
  It was up on like, I can't even remember what floor we were on.
• 2:39
  But there was glass surrounding us.
• 2:41
  There was just like big trees.
• 2:43
  We could see the Sky Tower, which was like the tallest building.
• 2:46
  I want to say a New Zealand, but is it just Auckland?
• 2:49
  I can't remember.
• 2:50
  And we had so many people there to learn about property and how they can get into their first home.
• 2:57
  And we had a conversation.
• 2:59
  So it was Vic, myself, and then Emily Turnbull.
• 3:02
  And she's the Trade Me Property Audience Director.
• 3:05
  She's been there for about six years.
• 3:07
  But I actually knew him from years and years ago.
• 3:10
  So one of my mentors, when I was in media, introduced me to her when I was going to London.
• 3:16
  It would have been like 2017.
• 3:19
  And we met up while we were there and we had a drink.
• 3:21
  And she was just one of those people that you meet and you're like, you are just amazing.
• 3:27
  And she's so kind and hilarious and verbatious and generous with her time and her energy.
• 3:34
  And just like such a gorgeous person.
• 3:36
  So it was a real pleasure to have her on the podcast and at the Sliver Vent.
• 3:41
  And we spoke to her about her experience with property.
• 3:44
  She's had some pretty awful personal things go on in the last five years,
• 3:51
  which she actually did open up about in this episode.
• 3:55
  And just like speaking to her experience by property,
• 3:59
  how it's changed the different times she's bought houses.
• 4:02
  And she was just really honest about how what's the opposite to empowered, unempowered?
• 4:08
  She felt with money and with property, particularly,
• 4:12
  and how that's really changed now that she's made her first house purchase by herself.
• 4:17
  So this is a really important and special conversation, particularly to me.
• 4:23
  It was just like, yeah, it was a real honor to have her on the podcast.
• 4:27
  And for anyone that wasn't able to come to their vent, obviously,
• 4:30
  you can listen to the conversation now.
• 4:32
  And we hope that you enjoy it.
• 4:34
  I think before we get into YouTube talking about your property journey,
• 4:40
  I would kind of love to get a lay of the land of the New Zealand property market in general.
• 4:47
  The returns that have been made over the last five, ten,
• 4:50
  we can go back over much, you've done your research.
• 4:54
  But because I think things have changed a lot in the last ten, fifteen years,
• 4:59
  a lot of us probably have been thinking about maybe wanting to buy a property for a while.
• 5:03
  And it's not as easy as it might have been for our parents or our grandparents.
• 5:08
  So can we just talk about what property used to look like in New Zealand,
• 5:12
  the returns that we saw, and how that's changed in the most recent years?
• 5:17
  New Zealand does have an incredible fascination with property, which is great.
• 5:22
  I think property is, it's like an ownership of an asset,
• 5:28
  and it creates value over time.
• 5:31
  So it's somewhere you can live.
• 5:33
  It's somewhere that grows in value and has historically done very, very well in New Zealand.
• 5:38
  We are a very attractive place to live down here in New Zealand.
• 5:43
  So we do attract a lot of interest overseas as well, which also helps.
• 5:47
  But essentially what makes a property market strong is demand is greater than supply.
• 5:54
  So we are a small country.
• 5:57
  We've only got a certain number of houses as well.
• 6:00
  And so there's a lot of people that want to live here.
• 6:02
  We also have had quite a great economy, so that also comes into play.
• 6:08
  We're politically stable, for example.
• 6:12
  More politically stable than a lot of other countries in the world right now.
• 6:15
  But historically, property has delivered about a 7 to 8% return over the last,
• 6:20
  like per year, over the last 30 years.
• 6:22
  So that's on average.
• 6:23
  I'm not saying every year has delivered that, but when you average out the last 30 years,
• 6:28
  that's the kind of return that you can be expecting to get.
• 6:31
  And if we looked at that in relation to the stock market,
• 6:37
  the US stock market has done about 10% return per year on average over that same time period.
• 6:45
  The thing with property, though, is that you can use leverage.
• 6:49
  So leverage can really accelerate or kind of propel those returns.
• 6:53
  And we'll get into a bit of discussion about how that happens.
• 6:56
  But more recently, though, the property market in New Zealand hasn't done as well.
• 7:03
  So we saw a big, big increase in the property prices in New Zealand.
• 7:09
  Kind of 2021, everyone was coming home from COVID happened.
• 7:15
  Everyone was coming home.
• 7:16
  Everyone was like, you know what?
• 7:19
  I'm going to move home, buy a house in New Zealand.
• 7:23
  And that really increased demand.
• 7:27
  Then, 2022 happened.
• 7:30
  We had rising interest rates, mortgage rates, therefore went up.
• 7:35
  And it was a lot harder for people to buy property in New Zealand.
• 7:40
  So 2022 wasn't a great year.
• 7:43
  2023 also wasn't very good.
• 7:46
  But then we're starting to see some really early signs of the market kind of starting to rebound.
• 7:53
  House prices starting to go back up.
• 7:55
  And again, it's interest rates that have been coming back down now.
• 7:58
  So it's the best way to think.
• 8:01
  As soon as interest rates high, no one's going to be like, I'm going to run to the bank and get a mortgage.
• 8:05
  Well, it's just harder because you need to now the amount that you can borrow and what you can service is way less.
• 8:13
  So therefore, you might have been able to purchase a $800,000 house.
• 8:20
  But now you can only be able to purchase a $600,000 house.
• 8:24
  So the dynamic changes slightly.
• 8:27
  If I look at my mortgage, for example, I was paying over 7% last year.
• 8:33
  And now I'm paying about 5.3%.
• 8:36
  So I've got such a change in the amount that I now have to pay in terms of my education.
• 8:44
  Well, there have been total in terms of a new announcement.
• 8:47
  Well, just vaguely.
• 8:48
  Because if you don't own a house, you've never owned one.
• 8:50
  Five or seven percent sounds like, what's the big deal?
• 8:53
  It's not a huge amount.
• 8:55
  One or two percent to someone that doesn't have a huge mortgage.
• 8:59
  Well, if you say 7% on a million dollar mortgage, for example, it's like $70,000.
• 9:05
  Whereas 5.3% on a million dollar mortgage is 53,000.
• 9:13
  Yes, exactly.
• 9:14
  I mean, million dollar mortgage is a lot, but just for the quickness of calculations.
• 9:20
  So you've got an extra 20,000 to 20,000 give or take that you need to find almost overnight.
• 9:30
  And that's a lot of income.
• 9:32
  So given the fact that property on average has returned about 7%, but there's also years
• 9:40
  that it's amazingly well, really, really high.
• 9:43
  I don't have no idea how high.
• 9:45
  Was that have been like 12% or is that unrealistic?
• 9:48
  Like 20% at some point.
• 9:50
  And then some years would the lowest have been negative?
• 9:54
  Oh, wow.
• 9:55
  It's gone backwards.
• 9:56
  So it can really, really move around.
• 9:58
  I think also we've got to break down into regions and cities.
• 10:03
  Because they also react very differently.
• 10:06
  And in the cities, they tend to have a higher capital gains, which means that a lot of people want to,
• 10:15
  well, there is a natural attraction to the city.
• 10:17
  There's tends to be jobs in the cities.
• 10:19
  So therefore, those capital gains and house prices tend to go up slightly higher rate than the regions.
• 10:28
  And then also, but the rental that you can get is a bit lower than in the regions.
• 10:35
  So there's kind of two things to consider when you're buying property.
• 10:38
  And that is the rental income.
• 10:40
  If you are renting out to your property is an investment property, which I know will get into in a second.
• 10:45
  And then there is the capital gain, which is kind of what we're talking about,
• 10:49
  is just the movement or the change in the price of the property.
• 10:53
  So if we then think about the last 30 years and interest rates have fluctuated and gone up and down,
• 10:59
  but overall, the access to get into property has gotten harder and harder and harder.
• 11:04
  And so many generations before us have made a lot of money by investing in property.
• 11:10
  Has that significantly changed now?
• 11:13
  Like what are both of your thoughts on that?
• 11:16
  I mean, if we look at the percentages of like even our friends who own property compared to our parents when they were our age,
• 11:24
  it's probably a lot less.
• 11:26
  The one thing I'll say, which is really interesting,
• 11:29
  the percentage of ownership in New Zealand is still pretty stable.
• 11:34
  So what we haven't seen in this changing market is that ownership has dropped.
• 11:38
  It's stayed pretty consistent.
• 11:41
  We've seen some salaries increase over the last 30 years at the same time,
• 11:45
  but man, there are some different challenges in the market for, you know,
• 11:49
  if you're getting in for the first time, particularly over the last few years that we've had with, you know,
• 11:54
  even, you know, what you need to be showing a bank to be able to get a mortgage is bloody terrifying, right?
• 12:01
  Yeah, no, 100%.
• 12:03
  And I think also, like when you're thinking about property,
• 12:07
  it moves, well, property prices move in the opposite direction to interest rates in the most simplistic form.
• 12:16
  So your property price might be going up and interest rates will be going down.
• 12:22
  So it's like, I can take on a loan and I will have to pay less for that because interest rates are lower,
• 12:28
  but I'm going to have to pay more to purchase the house, because house prices are higher.
• 12:32
  On the flip side, you might be like, you know what, I'm going to stomach some really high interest rates
• 12:37
  or mortgage rates at the moment to get a lower value in terms of the property.
• 12:41
  So it's like, whatever you can manage, if you've got a great deposit,
• 12:49
  you might struggle a bit to service your mortgage, so therefore pay your mortgage because of your salary or your income,
• 12:57
  then you might wait until interest rates are about lower and then house prices are higher versus the other way around.
• 13:03
  So there's kind of, you have to think of two things.
• 13:05
  You have to think of the service ability of the mortgage.
• 13:08
  You know, can you afford to pay that five percent, that seven percent?
• 13:13
  And no matter when you get into the property market, I guess one thing won't be in your favor.
• 13:19
  You know, it's either going to be high interest rates and you have low prices or it'll be high prices and you have low interest rates.
• 13:25
  So there'll be something that you have to, you're not going to get a perfect situation where you're like,
• 13:30
  oh, we've got low prices and low interest rates.
• 13:32
  Well, I mean, that's what people say that.
• 13:34
  If you do, then that's the whole house, right? Like at the time when you were born, everyone was like,
• 13:38
  you're buying at the top of the market.
• 13:40
  And that was I bought seven, nearly eight years ago now.
• 13:44
  And I honestly wish I had got that in writing from people or something or being like,
• 13:50
  oh, I bet you it's not and actually made some more money out of it would have been great.
• 13:53
  But no, yeah, the number of people that said that I was buying at the top of the market.
• 13:57
  And for me, though, that decision was, look, I can service this amount of debt in terms of a mortgage.
• 14:04
  I am now, I had moved back from Sydney and I was like, I could either rent or, you know,
• 14:11
  what I've actually got enough of a deposit to buy a house because I think I'm going to be here for the next five, five or 10 years of my life.
• 14:17
  So, yeah, that was kind of my thinking.
• 14:21
  It was a bit of a lifestyle choice as well as a trade off of, you know, renting versus buying.
• 14:28
  I'd rather pay my mortgage than someone else's.
• 14:30
  And Emily, you have had a slightly different experience in property.
• 14:37
  Can you speak to the first house that you bought and what was kind of going on in your life at the time?
• 14:42
  Why you made the purchase? Was it emotional? Was it to live in?
• 14:45
  Yeah, yeah. And the rent to buy is a really interesting piece that resonates with me that I'll kind of touch on.
• 14:53
  Interestingly, when we were coming into the stage of buying my first property, it was really shit with money.
• 14:59
  So, I loved the best life on my visa and it was amazingly fun.
• 15:04
  I had great clothes and had amazing nights out, thanks to the bank and they used to see me a letter every month suggesting that I could maybe pay the office of money,
• 15:14
  and I, you know, replace it.
• 15:16
  No, no, no, no, no, I've got other plans.
• 15:18
  Sorry, these are, or as a new headache, right?
• 15:20
  Oh, yeah.
• 15:21
  money. So I was great. I wasn't good with money apart from spending it. So, and I was
• 15:26
  great at that. It was a very good school. And that was fine. It did me well at that point
• 15:31
  because at that stage I was living very much in the now and of home purchase, a property
• 15:35
  wasn't really on my radar. And then I, I don't know if I can say this, but I, well, I
• 15:40
  passed a dude at a work party. It was a rogue passion. We fell in love. And how you met?
• 15:47
  Yeah, at a work party. Can you believe it? Actually, we was HR. It was just across the road
• 15:52
  actually. Yes. I'm so funny. And we, we also, when we left, we had a bit of a passion
• 15:57
  at the park. I don't know why I need to share this with you, but it's a beautiful love story.
• 16:02
  Beautiful love story. And as our relationship developed, I think what started happening
• 16:08
  was I was thinking about the future, whereas I had been living in this world, which was,
• 16:12
  I'm just having a great time. And I vividly remember this moment where we started talking
• 16:17
  about moving in together. And the world flashed in front of my eyes that it was going to
• 16:21
  have to face up to my financial situation. And, you know, were you indeed at that point?
• 16:27
  Yeah, yeah, yeah. How, do you remember how much? Yeah, yeah, yeah. I was like, yeah, we
• 16:31
  tried to talk about it. I was in the thousands, indeed. It's okay. It wasn't, well, I
• 16:39
  mean, when you're young a lot, yeah, it seems like a lot. Yeah. I mean, all I'll say is
• 16:44
  some people can rack up, you know, tens of thousands before they realise, oh gosh, I need
• 16:49
  to, you know, so not, not too bad. But enough that I was like, I'm stepping into this relationship
• 16:54
  and we've got a future in, so we had a really honest conversation and, and kind of, you know,
• 17:01
  it was great. It was great. It was one of those through my journey. My God, the vulnerabilities
• 17:05
  of having to face up what you don't know or share information you don't even want to share.
• 17:12
  It's really challenging kind of that opening up. But when we stepped into that, we moved
• 17:17
  in together and we got to the point where we went, this is actually not realistic. We're
• 17:22
  paying so much rent. Why would we not start investing into a house? And what's fascinating
• 17:27
  when I think back to this was how we both tackled it differently. So I was quite emotional
• 17:32
  to me. It was around, this is, we're going to build a future together and nest, whereas
• 17:38
  Des was so smart with money for him. He was going, this is what we need. It's practical.
• 17:45
  So he would be looking at spreadsheets and I'd be crying, you know, when the house didn't
• 17:49
  come through or I'd be suggesting we could stretch to the flash villa down the road and
• 17:54
  head be looking at me like his nuts. So again, it's understanding each other for, you know,
• 18:00
  what was driving each of us? Where did you land? Did you go for a middle ground? Or
• 18:04
  like you had to the visa have to go? What was it like? Oh man, we, what he taught me which
• 18:09
  was like, was you can actually have fun and save money too. Who would have thought?
• 18:14
  Who would have thought? It's fascinating. You share your tips. Oh God, I've actually
• 18:18
  held on to most of them from back in those days. But yeah, it was fascinating. So we just
• 18:25
  put a process in place. We figured out pretty quickly that a little bit away actually
• 18:29
  compounds and it compounds and you forget it's even there and you continue living a life.
• 18:34
  I think that's the most fun part really is achieving goals. Even if it's small like it
• 18:38
  might be that you've already got a decent amount of your deposit, but then it's getting
• 18:41
  it to this amount. That's really exciting. And when you get there and then you're like
• 18:46
  cool and then you're so motivated to get to the next milestone, it might be only a thousand
• 18:50
  dollars and you get to then you get to five thousand and then you get to ten and then you
• 18:53
  just get almost a decade away with it, isn't it? Yeah. Yeah. And so if you now own two
• 18:59
  properties. Yes. You've got your home. Yes. But you now rent out and you've also got an
• 19:04
  investment property. And I remember so clearly we were at the co-working space that we were
• 19:09
  working in London and she was a bit jittery and weird and I was like, what's going on
• 19:14
  this time? I'm really stressed out about the second mortgage. You know, I'm thinking of
• 19:18
  like doubling down and anyway, can you speak to like what was happening at the time and
• 19:22
  why you decided to and also like honestly how you felt about it because you were quite
• 19:27
  stressed out. Yeah. I think it's more I was more stressed out about anything I tell
• 19:32
  Sophie is go straight to the podcast, you know. So I was like, I was like, I need to get
• 19:36
  my ducks in or before I hit this conversation. No, but I remember we were writing our property
• 19:42
  course as part of the curve. We've got a property course and we were writing this. And as
• 19:46
  I was writing the part on leverage and it was like, oh, and when you buy your first house
• 19:51
  and then the value of that property increases, then you can borrow more because you've got
• 19:57
  more equity versus the debt that you've borrowed. And I was writing that and was going,
• 20:03
  why don't I do that? And I was kind of like this, this light bulb moment of, oh, okay.
• 20:08
  And then I didn't have enough. I couldn't borrow, I couldn't, I couldn't borrow more than
• 20:16
  a certain amount because I had to, I couldn't service it. So the more, the more you borrow
• 20:21
  in terms of debt, the more dollar, the bigger dollar amount you have to pay to service that
• 20:25
  each month. And so there was a three-child. And so I think it was about 200,000 that I
• 20:30
  could draw down as additional debt on my existing house. Sorry, how much? 200,000.
• 20:36
  There's quite a lot. Yeah. But in terms of, yeah, in terms of buying a house, I'm like
• 20:42
  Auckland, you know, like, yeah, draw down town. So I got it. Talks to my spending here.
• 20:46
  I draw down. I like to draw down. I know. And so I reached out to my parents and I was
• 20:53
  like, hey, I think I want to buy another property. What's your idea? Yeah. You've never told
• 20:59
  me that. Yeah. And they were like, oh, funny. You say that. We've actually been looking
• 21:02
  at a property. And I was like, bingo. And so, yeah, joined forces with them. And yes,
• 21:08
  I know I'm obviously, it's a privileged position, you know, that my parents were willing
• 21:12
  to come to the party with that and come to the other work. But how did it work? Were
• 21:15
  they putting in this, like a similar deposit? And then they loaned more against the bank?
• 21:19
  How did that work? They are pensioners now. So they can't get alone. So yeah. So then
• 21:26
  we, we bought, so they didn't borrow any money from the bank. And so they were effectively
• 21:31
  for their half a hundred percent mortgage free. And then we went and bought a second. And
• 21:39
  I love how you call it investment property because is it not? Well, this, well, this is,
• 21:45
  this is going to be my next question. Was like, do we classify this as an investment
• 21:48
  property? Well, it's a second property. So it is classified as an investment property.
• 21:51
  But the discussions that I had with my parents was, it is in the Coromandel. And the discussions
• 21:58
  I had with my parents was that we would rent it out and get an income or a rental yield from
• 22:04
  it, which is still yet to happen, is that because they are quite enjoying living in the, but,
• 22:11
  so that the, but the agreements changed because they, they paid for some renovations throughout
• 22:18
  the year. So the tradeoff of us being able to rent it out and get, get that rental yield
• 22:22
  has actually translated into adding value in another way. So it's, it's been, it's changed a bit,
• 22:27
  but it's funny because they do now say to them, I'm like, so when are we Airbnb being this?
• 22:32
  You know, yeah, when are we renting this out? And they're like, when can I come and stay?
• 22:36
  They're like, oh, we on the couch. Yeah. And they're like, well, we quite like using
• 22:39
  summer and winter and I'm okay. So, but, yeah, we need to do a bit of a check-in and actually see
• 22:46
  the return. Yeah, because there will be a point in time, we will have to, both of us will have to
• 22:50
  rent it out. But were you at all stressed, like when it came to drawing down that 200, was it
• 22:57
  stressful? Or was it kind of a no brainer because you were putting it straight into another investment?
• 23:01
  It was stressful. I think even buying my first property, I had a real bigger version to debt
• 23:10
  and even to the state opening my ASV bank account and seeing negative, like massive negative numbers,
• 23:18
  I'm like, oh, you know, like, because you see your mortgage in there. And so, yeah, taking more debt
• 23:23
  definitely does. But then I think you have to do the numbers and you have to do the numbers with like,
• 23:32
  with a buffer for, you know, taking into consideration certain scenarios. Okay, well, if this
• 23:38
  doesn't happen or, you know, if I lost my job or what would happen if mortgage rates went to X
• 23:45
  or what if they dropped to Y? You know, you have to run all those scenarios. And so, I, yes,
• 23:51
  I probably stretched myself a little bit, but we've already got decided to get capital gains on that.
• 23:57
  So, it kind of gives me a bit of like, because there's other properties in the neighborhood that
• 24:01
  have sold that are of higher value. So, it kind of gives me a bit of confidence. But, yeah, it's
• 24:08
  definitely, I think with anything in life though, you kind of have to take a bit of a risk.
• 24:15
  You know, even the figures that I mentioned about the property market doing seven to eight percent,
• 24:20
  you know, that's not even a year. I know a lot of friends of mine that bought property in 2021,
• 24:25
  and their property prices, you know, are still not back to where they were. And we're kind of three
• 24:32
  years later, and they borrowed, you know, a lot of debt to afford those houses. So, it doesn't always
• 24:39
  work out, but I think you kind of have to take the risk with a lot of investments. There's always
• 24:44
  risk. And, yeah, you kind of just have to try and make it work to the best that you can.
• 24:51
  Well, because you brought, have now recently bought an investment property. What, like,
• 24:55
  what was the decision to do that to go from buying an emotional house purchase to then buying
• 25:02
  an investment property? It's been fascinating. So, the real shit aspect of my love story is that
• 25:10
  my husband died six years ago. So, and grief is a funny old thing, right? Where, because he was
• 25:18
  my man, you know, he was the love of my life. It's a funny thing. It breaks down into a whole heap
• 25:23
  of stuff, and they talk about secundary grief, and this is what it means, you know, what it feels
• 25:28
  like in life, not just losing the person, but what not. And what I discovered really, really fast
• 25:33
  was that because of we were a partnership, and we were, you know, partners in crime, we both fell
• 25:39
  into these natural different roles, and I took a back seat for all the finance stuff. It wasn't
• 25:43
  that, it wasn't that I wasn't interested. It was just, and I was way better with money, it just
• 25:49
  that I wasn't actively having to make the decisions, because Dears was making them, and I suddenly
• 25:55
  hit this moment where I went, holy shit, this is on me now. This is entirely on me. I've got a
• 26:02
  mortgage to service, I've got two kids to look after, I've got a future, you know, this is on me,
• 26:09
  and I so I stood in that for quite some time, and then I suddenly got to this point where I
• 26:16
  went, I need to actually, and again, it's different moments, I need to take a bit of control here,
• 26:21
  and control was what was going to help me feel like, okay, I'm doing this. What I knew was I didn't
• 26:26
  have the skills, and I had been that human being who had kind of taken a back seat. So the first
• 26:32
  thing I did was pull up my big girl undies, and accept that I didn't know what I didn't know,
• 26:38
  and went and got some financial advice, and opened my books, and when here is me,
• 26:43
  and we had some really big conversations around spending a life and whatnot, and I just met
• 26:48
  this human that was just incredible, and she showed me, hey, actually, here's what you can do, and much
• 26:55
  like you, that it was about leveraging off my house, the difference this time round was zero emotion,
• 27:02
  which has just been, to me, this is entirely investment. I have got, there is not one piece of
• 27:09
  emotion, to me it's a spreadsheet, and numbers in a spreadsheet, and what it's given me is a view on
• 27:16
  when I might be able to retire, and comfort that I've taken control, and I know what the future is
• 27:22
  looking like, I absolutely shit my pants when I saw what I was carrying at this age, I am young,
• 27:29
  so do men in terms of debt, in terms of debt, but I also know that I've got great tenants,
• 27:35
  who are servicing it, and also there's a reason the bank doesn't lend you the full amount,
• 27:40
  you know, because property markets do go up and down, and so it's knowing that, yeah, if
• 27:47
  hit the fan, you can sell the house, you pay back the debt, and you're kind of, you're out of that
• 27:52
  stressful situation, hopefully it doesn't come to that, but yeah. And I think the other thing is
• 27:57
  things like a pause on repayments, the banks, if you're in a situation, I mean at the point that
• 28:02
  Dad's died, we went to the bank, or someone did, I didn't, somebody did it for me, and we paused
• 28:07
  repayments, because at that time I couldn't think about it, so it's understanding that the bank
• 28:12
  doesn't want to set you up to fail. Yeah, and I think that's, sorry, I think that's really
• 28:17
  important, I remember during COVID, like the banks were very, very accommodating, if you'd lost
• 28:22
  your job, and I think it's, you know, just to take that and kind of take that across all of your
• 28:27
  finances, you know, if you are ever in a position of struggle or your situation changes,
• 28:34
  to reach out to those, those institutes, like the banks, the electricity providers, you know,
• 28:41
  like the phone companies, you know, all those people just reach out and let them know your situation,
• 28:45
  and nine times out of ten, they'll come to the party. How did you feel pausing the payments?
• 28:51
  I felt like such a failure. I went, I've, oh god, this is going to, I've failed to keep my husband
• 28:57
  alive on this planet, and I've failed to understand finance, and I've failed, it was a real big
• 29:03
  and now I can't even figure out how to pay a debt on a bank. And then I don't know what happened,
• 29:10
  we couldn't talk to ourselves, like, we wouldn't talk to friends like that, we are so mean to
• 29:15
  ourselves, we are so mean. When I did it, oh my god, the relief, that sense of, oh, I can actually
• 29:25
  breathe was totally, I mean, did you, did they, I mean, is that you've had a time where you don't
• 29:31
  have to pay interest, or is that kind of the minimum that you can go to is not paying down the principle,
• 29:36
  but then you always still have to pay interest, or can they towards that too? You can pause that too.
• 29:40
  Yeah, I was on a holiday, a full holiday. And, um, wow, that's quite amazing. It was, yeah, amazing,
• 29:46
  and that would have been for, maybe through, maybe three or four months, enough that gave me
• 29:54
  breathing space to actually go, this is something I don't have to worry about right now.
• 29:59
  I went, I had the opposite problem. I went to the bank and I was like, so why am I paying this much
• 30:03
  in a mortgage? I want to, I want to just pay interest on them, put the rest into an invest into,
• 30:08
  into the stock market and grow the money and then pay the, pay the mortgage back. And so I caught up
• 30:11
  the bank and I was like, hey, can I just go down to interest on them? And they were like, oh,
• 30:14
  are you in financial hardship? I was like, no, no, I just want to like use the extra to invest in
• 30:18
  the stock market. And they were like, absolutely not. I mean, I was in financial hardship.
• 30:23
  And then I was like, well, actually, maybe I am in financial hardship. I mean, I can be,
• 30:28
  I can go on a spending free and be in financial, sorry, not taking the, the person out of that,
• 30:32
  but it was just like, um, yeah, it was quite, I was like, well, of course, like they,
• 30:37
  they've got, uh, they're taking a recipe leading you money. And so they want you to do everything
• 30:41
  you can to pay that back as well. Um, and if you're in my situation, you're literally taking
• 30:45
  the purse, they're going to say no, but if you're in a genuine situation, uh, they're going to be
• 30:50
  a lot more helpful. Yeah. This is not so much like, um, a practical tip question, but
• 30:58
  you mentioned secondary grief before. Did you want to sell the house that you were in?
• 31:04
  That is, you know, you win so many people asked me that. Are you going to get rid of it? Are you going
• 31:09
  to, um, move down to Christchurch where your parents are? It was fascinating to me. And I'm still
• 31:15
  in the same house six years on with my kids. We, it's our family home. We laugh. We walk around
• 31:21
  the streets and dream about the big mentions and, you know, they'll let wonder. And I'm like,
• 31:25
  hmm, yep, great. Stop dreaming. Stop dreaming. Let's be realistic. Um, but, but the kids will say,
• 31:31
  yeah, our house has got love in those walls. And we've just got a little three bedroom perfectly
• 31:37
  sized for us, house, it's full of memories. So at the moment, no, um, when the kids leave home
• 31:43
  and are off causing carnage, maybe, maybe that's the time. Thank you for sharing that because I
• 31:50
  think, um, when it comes to spending a money on anything, there's so much emotion attached,
• 31:56
  but I think when you've spent the money and then emotion attaches to it, it's a totally different
• 32:02
  experience. And it's interesting when you say the residential, well, you know, your first home
• 32:07
  versus your investment property and how the emotion was completely removed from that. And I think
• 32:12
  that's like, I think if anyone here is thinking about buying their first home to live in,
• 32:18
  you do, you do look at it with a different mindset, you know, versus an investment property. I
• 32:23
  remember when I was first looking for my first property and I was going around with my dad,
• 32:29
  because, you know, he goes around and he bangs the walls and makes sure, make sure everything
• 32:33
  solid and, you know, you're not saving a bit on builders' fees and all that. Um, and he was going
• 32:37
  around and I, at this point, I was still deciding whether to stay in New Zealand. So I was, I had my
• 32:43
  investment property head on. And I remember walking into this house and had this beautiful bathtub,
• 32:48
  that this old-school bathtub and this, like, it was like a laundry area with this old-school sink
• 32:53
  and I was like, oh, I was like, amazing, we could paint this, we could do this. And I was just in my
• 32:57
  head and he was like, no, you'd strip that out, you'd make this a second bedroom and you'd do,
• 33:00
  and I was like, oh, wow, I was like, okay, I was like, I think I want to buy a house, not an investment
• 33:05
  property. And then I decided to stay in New Zealand. And so, you know, this was kind of during
• 33:10
  the property buying journey and then I started looking for somewhere I actually wanted to live,
• 33:15
  which is quite different. But, um, yeah, it is a different, different mindset because you're looking
• 33:19
  at, you know, how can you make the most money off this property rather than, you know, does this
• 33:25
  tickle the boxes from, um, in terms of location, in terms of price, in terms of, you know,
• 33:31
  a number of bedrooms and all of that. So, yeah, it's a different hat that you put on for different,
• 33:36
  for different properties. What about for people that are here all listening, that are thinking,
• 33:41
  well, I would love to buy a house to live in, but I don't want to live in gore.
• 33:48
  No, no offense to gore. I actually haven't been to gore, so I can't foreshade it gore. But
• 33:53
  the point is, you know, like a lot of people don't have the option to live or to buy a property in
• 33:58
  the area that they want to live in, yet if they buy property, it only makes sense financially if
• 34:03
  they can live in it. Yeah. Yeah, I would say there's options, like going in with someone else.
• 34:11
  There's, you know, I would caveat that with making sure you've got, you know, you're lawyer and
• 34:16
  everything sorted so that, you know, if it did go pear shaped, but, you know, a lot of people do buy
• 34:21
  with friends, you know, property prices don't get me wrong. I like an astronomical right now,
• 34:28
  and I can totally appreciate that it might be, you know, like take a while to even, you know,
• 34:36
  get a deposit. So joining forces with someone is a really great way to do it. Another way to do it
• 34:42
  is to, you know, buy an apartment, apartments tend to be a bit cheaper. And so, sorry,
• 34:50
  imagine if you were living with like four people and you all went in together so that you could buy
• 34:56
  and live in a house that was more centrally, like you actually technically could, if you had all
• 34:59
  of the legal side of things in place and you're all very aware of like why you were buying and how
• 35:04
  long you were going to hold the property for, like there's nothing to say that you can't do that.
• 35:09
  Yeah, or you, you might find someone that wants, that just doesn't want to live in it, then you can
• 35:13
  just, you know, use them and their deposit and they can help pay for it, but they might have
• 35:17
  houses. You know, there's so many situations and I think, you know, with where property prices
• 35:23
  are now, and I think it's like the average house price is like seven times income or something
• 35:28
  right now. But there's been a lot of innovation in this space and, you know, we do say that banks
• 35:37
  sometimes are a bit okay, in terms of their lending policies, but they are kind of coming to the
• 35:42
  party in terms of unique situations, which, you know, our parents generation, you know, they probably
• 35:48
  would never have bought a house with a friend, whereas now, if we, you know, it's a viable option
• 35:53
  to take a friend to a ball at school, let alone. Like things have changed a lot in the last 15,
• 35:58
  I mean, we, like it was ridiculous. Yeah. But I think, I think before we just wrap up, because I know
• 36:05
  there's going to be some Q&A and stuff. I would love to ask what your, how it changed for you,
• 36:12
  understanding the process of buying. So from kind of being more in the passenger princess vibe,
• 36:18
  for, you know, the first one, to then moving into this investment property. How did it feel
• 36:25
  before, during and after, comparatively? I, such an interesting question. I reckon it's been one
• 36:33
  of the things that has given me so much strength, weirdly, in the last, when was it 18 months ago?
• 36:40
  It's only got, it was a land build, new build, down in Christchurch, tenants moved in January.
• 36:47
  It was that sense of I am in control. This is hard and this is scary, but I am in control. I know
• 36:54
  the steps I have to do, and I know what the result's going to be, and taking the time just to get
• 37:00
  really clear on the numbers and for me to understand. And to also have someone where I could go,
• 37:06
  it's me again, I just don't get it. I don't get what this and being really vulnerable a bit. I just
• 37:11
  feel so empowered that I did this. This is something I did. And also now that you, now that you've
• 37:19
  learnt that and you know that how empowered you must feel, to also know that, you know, if mortgage
• 37:25
  rates went up a little bit, you'd know because you've got your spreadsheet and you know,
• 37:29
  like, that's fine. I can manage that rather than being like, oh gosh, or you know, throwing
• 37:33
  yourself into a panic. I think, you know, having visibility and control and, and removing the
• 37:39
  emotion, you know, it removes the stress. Yeah. And it brings you that satisfaction around,
• 37:45
  oh man, look at it. This feels, you know, it feels, feels pretty cool. Yeah. I also feel really
• 37:51
  lucky to knowing it's such a tricky market to have been in this scenario to be able to do this.
• 37:57
  Well, it would be the biggest learnings you both had in both your home buying, I love this house,
• 38:01
  I want to live in it forever, to your investment property purchase, whether anything's that,
• 38:07
  you know, you know, we all say, you know, and hindsight's great, blah, blah, blah. But actually,
• 38:12
  for most of us here, we could actually learn from your mistakes and not do them. Was there anything
• 38:17
  that you wish you know? Great nights out. Back in the day. Great nights out. God, I wish I had
• 38:23
  just put a little bit of money aside earlier. I wish I had started earlier. I wish I'd bought
• 38:29
  a house when I was in the womb, you know, there would have been great. No, but I would probably,
• 38:36
  I would have to say the same. If I look back, when, when there's probably, it's probably too
• 38:43
  fold, I think we're back when mortgage rates were really, really low at like two, three percent,
• 38:47
  I think, because I was new to the property market and my property buying journey, I kind of
• 38:55
  didn't think about a world where mortgage rates would be seven percent. That just seemed like
• 39:01
  barbaric. Like, you know, what will that happen? They've been two percent for so long and
• 39:06
  and so I wish I had paid off and been a lot more strict with my lifestyle and paid off a lot more
• 39:13
  then. It would have just meant that when interest rates do go up, you've got your debt is lower,
• 39:20
  the amount of debt is lower because you've paid off a lot. So therefore, it wouldn't have impacted
• 39:25
  me as much, you know, over the last 18 months. And also, yeah, I think it's just paying it off,
• 39:35
  paying off as much as I can. And gosh, I could be sitting here in another seven years time,
• 39:40
  being like, oh, I wish I'd paid off more. I'm really trying. It's become easier now and mortgage
• 39:46
  rates have come down, but when they were seven percent, I had to move to interest only because I
• 39:50
  couldn't afford to pay interest and principal. So yeah, it's realizing the quicker you pay it off,
• 40:00
  the more you can invest in other things that grow up as well. Yeah, but why for some reason,
• 40:06
  my head is like, I'll just pay off the interest. Why would I bother with the principal when it's
• 40:10
  going to take me 40 years? I don't know why that's my mindset, but it definitely is. It's like,
• 40:16
  how do I change that? Let's say hypothetically, I was paying off my interest and then I was investing
• 40:22
  the rest in the stock market and not paying down my principal. Why would I not do that?
• 40:29
  Yeah, I mean, you could. Yeah. I think the thing with the stock market is unpredictable. So,
• 40:35
  you know, whereas where the mortgage, you know, you're going to be charged, seven percent, five
• 40:40
  percent, whatever it is. And so if you're paying down your principal, the dollar value of interest
• 40:47
  is getting smaller. But not quite much when you've got a 40-year mortgage to pay off, right? Yeah.
• 40:52
  Like, say you put a thousand dollars in a month, like it's probably 20 cents less than interest,
• 40:56
  doesn't it? Yeah, but it all adds up. No, but seriously, like, you know, for some reason,
• 41:00
  that's like my mindset is just, well, I would just get it, be making capital gains and then,
• 41:07
  you know, I don't know why, is that a really stupid approach? No, I don't think it's, I mean,
• 41:13
  both of you are like, I got nothing. I mean, it puts more weight on you having to get capital gains
• 41:22
  from the property to create value for yourself. Whereas, yeah, because you're not reducing your debt,
• 41:30
  so therefore, when you tell the seller what you own and it is not actually much more.
• 41:34
  Yeah. And when you come to sell it, you're going to have to pay back, you know, say you had a hundred
• 41:38
  thousand dollar loan and you, when you, and say you pay back 20 grand of that and you're only at 80,
• 41:45
  thousand to pay back when you sell it, you get to keep more of what you've sold it for. Whereas,
• 41:51
  if you haven't paid back any of the principle, you're going to have to pay that hundred grand back.
• 41:54
  So there's pluses of minuses in both and it does depend what you, what else you do with that money,
• 41:59
  but I would know myself and I'll probably just spend it rather than, yeah, so. Same.
• 42:06
  We, for the investment property at the moment, we're doing interest only because my strategy is
• 42:11
  to hold. This is a property that I'm not flipping in the next few years. So in the early days,
• 42:16
  we're just going to do interest only, see how that goes and then I think it's different strokes
• 42:21
  at different times and different experiences. So if you were planning on getting rid of it sooner
• 42:27
  or flipping it, you're saying that you, because wouldn't it be the other way around if you're
• 42:32
  flipping it, you wouldn't even bother with the principle. I guess depending on how long, how quickly
• 42:36
  you're flipping it that time, you'll have a better view. Yeah, and you can add values in different
• 42:41
  ways as well, like you might not want to pay off the principle and put that money into adding a bedroom
• 42:49
  or adding a bathroom and then you're adding value in that way. So therefore, when you do come to
• 42:54
  sell, it'll be worth more. So the percentage makeup of that final sale price in terms of the
• 43:00
  percentage that is debt that you have to pay back would be smaller. So there's, it's there's so many
• 43:07
  kind of factors, there's your personal situation, there's the market, there's interest rates, there's
• 43:14
  so much that comes into it. And I think, but I think like you said, Emily, about having a
• 43:20
  having a spreadsheet and knowing, okay, let's just tweak this and let's say if I didn't pay back
• 43:25
  principle, how long would that take for me to pay off my mortgage? And or if I could only sell it
• 43:34
  for this price, or but what if I only got this price for it when I sell it? You know, like kind
• 43:40
  of playing with the variables, I think is really important because there is so much that goes into
• 43:45
  investing in the property market from, yeah, interest rates to property prices to your own personal
• 43:53
  income situation, other investments you might have as well, there's there's a lot that goes that you
• 43:59
  should consider. So it's hard to kind of give, I guess a black and white answer.
• 44:03
  Okay, so on that, everything goes wrong, you know, you can't expect blah, blah, blah, you can't
• 44:07
  predict all that stuff. So do we need to then have a like an emergency fund for our house if we buy one,
• 44:13
  like do we need to have a certain amount in a fund should a tenant move out and we can't pay our rent,
• 44:20
  should we have an amount in case I don't know the hot water cylinder blows up and you have to replace
• 44:25
  and it's $5,000, you know, like how can you mitigate those risks if you're thinking, okay, well,
• 44:31
  like I'm maybe going to buy this type of property for this amount, like what does the amount you
• 44:35
  should have left over as buffer rather than overextending yourself and having a massive amount in
• 44:42
  your deposit and then having to, you know, yeah, I think that's a really good point is when you do
• 44:48
  own a house, your dollar amount that you put into your emergency fund will change because you could
• 44:54
  have things that break at the house that you need to pay for. It's not just you personally now,
• 44:58
  it's you've got this, this asset that, you know, if you've got tenants in, they'll need stuff
• 45:03
  being fixed. So yes, you would need to take that into consideration, maybe increasing the amount
• 45:09
  in your emergency fund. The other thing is insurance is having insurance, having home and
• 45:16
  contents insurance, incredibly important, I mean banks won't even lend to you if you don't have
• 45:20
  insurance because, you know, you could take their money, go buy the house, the house burns down
• 45:26
  and then they're left with, you know, this huge debt and no asset to claim against that debt.
• 45:35
  So insurance is really key and also like income protection insurance, mortgage protection insurance.
• 45:41
  Does everyone know what that is? Lots of nods. It's basically if you were to lose your job or something
• 45:46
  happened and admit you couldn't work, you still have a huge, well, hopefully not huge, but a
• 45:52
  mortgage to pay, which is coming probably mostly from your salary. So protecting your income means
• 45:58
  that should something like that happen. You're able to get the insurance company will give you
• 46:03
  money to put towards your mortgage, which I've never understood until, because I was kind of like,
• 46:08
  yeah, it's a real, it's such a good one to understand. Or if you pass away then it will pay
• 46:13
  your mortgage, you'll get paid on behalf of, so your family doesn't have to worry about it either.
• 46:17
  So there's different ways you can structure it, but I'm only new to income protection and mortgage
• 46:23
  protection insurance, I kind of thought, but I don't have any dependence, it doesn't really matter, but
• 46:29
  yeah, it's a really, if I can't work, but I sort of pay my mortgage, that's going to be pretty,
• 46:34
  pretty traumatic and pretty, oh, I'm going to have to find that money from somewhere. So yeah,
• 46:38
  having that insurance is really, really helpful. One thing also, if you are thinking of an investment
• 46:44
  property, is that you can obviously take your kiwi saver out if it's your first home, which is
• 46:52
  such a huge help. I don't know how many of you are thinking of doing that, but that was probably one
• 46:57
  of the things that got me across the line in terms of being able to afford my first house.
• 47:03
  And so you can take that out for your first home if you're living in it. You can't, if it's an
• 47:10
  investment property, and it's just something to be aware of if you're kind of factoring that in,
• 47:14
  it's part of your deposit for investment property. Also, the thresholds for investment property
• 47:20
  in terms of the amount of deposit that you need is higher. So there's little things to just make
• 47:25
  sure that you should consider. It's not kind of apples, apples, that makes sense.
• 47:32
  However, if you're buying an investment property and you're happy to buy and go, and you don't
• 47:37
  have to live and go, the amount that you would need for that deposit, even if you're paying 30%
• 47:42
  and could actually end up being less than what you were buying. I think it's just like understanding
• 47:46
  the different options you have to make money and property, because it's not just as simple as like,
• 47:50
  if I want to get into the property market, I need to live in my house to be in central Auckland,
• 47:54
  like that's not the only way. No, but then house prices and go, probably not going to go.
• 47:57
  It's not the best example of location. But it's funny, because I remember, so funny, I remember
• 48:03
  my friend coming to me, she's like, that I bought a house. It's just actually so mean of me now
• 48:07
  in a reflection. She's like, I got it really cheap because it was some place that no one wanted to
• 48:15
  live. It was like some weird street. It was in a gut. Anyway, she's like, so great. I got so cheap
• 48:19
  because there was no one at auction, and I was like, she's like, yeah, it's so great. I got it
• 48:24
  for a bargain. I was like, yeah, but no one's going to want to buy it when you come to sell.
• 48:27
  And she was like, how do you? And I was like, well, it's true. It's like, it's so mad if you
• 48:31
  see this in the way. I know, I just like literally burst your bubble. But it's kind of true. It's like
• 48:36
  if there's no demand when you come to buy it or you're thinking getting a bargain because you're
• 48:42
  buying out somewhere where when I want to live, but that's not going to change in a few years.
• 48:47
  Well, it could get better, but you know, it's like, you want to buy, buy well, and what do people
• 48:53
  say? Buy on the, buy the worst house on the best street. And I know that sounds easy, but
• 48:58
  or buy somewhere where there is a new train line going in, which means people are going to be
• 49:03
  a lot more accessible to get in the city. Buy where there's good schools because they always attract
• 49:08
  families. Buy and maybe like there might be a new office development going up and you buy
• 49:18
  by around there. You know, there's think there's so many things to consider. It doesn't have,
• 49:21
  and that means you might be able to get it a bit cheaper. Like I remember St. John's when they
• 49:26
  hit that quarry. And everyone was like, wow, what a buy in a quarry. And it was one of the best
• 49:31
  performing suburbs in Auckland. And house prices there have just gone absolutely bananas. And it's
• 49:37
  because it was a new development. Yes, you're taking a bit of risk because you don't know, you know,
• 49:41
  is it going to, are they actually going to attract people? Are they going to be cafes? Are they
• 49:44
  going to be, you know, nice parks? You know, it's a bit, but, but more of a risk. But, but I think
• 49:50
  it's using your own brain rather than just going, being a sheep and where everyone else is buying.
• 49:54
  Because there are new schools, there are new quarries, there are new highways in places that are not
• 50:00
  necessarily just Auckland. Yeah. Or Christchurch or Wellington. You know, like remembering that there are
• 50:05
  also great investment places that aren't the main centers. And I don't think there's enough
• 50:11
  spoken about that. Like I was even looking on trade, me, I found this place in Levin. I'm not moving
• 50:16
  to Levin. But I did, I was looking to see like, what could I have bought in this area? What would it
• 50:20
  look like? And I was doing things like, oh, there's a new motorway going in here. And like, it's just
• 50:25
  like having that mindset everywhere you're looking, not just thinking about the immediate what you
• 50:30
  want. Because a lot of people still can't afford to buy the shittest house in the best, sorry,
• 50:34
  the shittest house in the best straight. Yeah. You know? Yeah. Thank you. Yeah. And I think there's
• 50:38
  a lot of initiatives as well that the government's actually doing in New Zealand. Like, I think,
• 50:43
  sorry, take a step back. It's like just thinking about that demand versus supply. Because that's
• 50:48
  what makes house prices increase. If more people are going to demand your home for whatever reason,
• 50:55
  then that's really good. And that's what anything to do with investing. It's like you want people to
• 51:01
  demand what you have. You want more people to demand that so the price goes up. And I mean,
• 51:06
  we've struggled to build housing, enough housing for New Zealanders for years. So that's kind of
• 51:11
  the supply side of things. And then on the demand side of things, you know, the government is doing
• 51:16
  a lot in terms of like trying to improve immigration. So attracting people to New Zealand. We've
• 51:21
  got interest rates that are better getting lower, which means more people are now in the market
• 51:26
  to buy property that might previously have found they couldn't quite afford it. So, you know,
• 51:31
  that adds to demand. Then you've got probably the easing of this foreign buyers band, which again
• 51:38
  means that there's foreigners that might be able to buy property now. So there's lots of things
• 51:43
  that for me sitting here now versus 12 months ago, get me excited about New Zealand property prices.
• 51:50
  Because there's also that property wheel, right, which is like sort of seven to ten years cycles,
• 51:55
  which is like the boom, the lull, then the in-between, and we're like right down in the lull. But
• 52:01
  even just understanding that and knowing if you're buying in a particular time and what the
• 52:06
  cycles do, like all of those things give you the confidence that you were talking about by feeling
• 52:11
  powerful in your decision, understanding what you're doing, understanding how the market moves.
• 52:15
  All of those things I think give you the confidence to feel less scared about what you're doing.
• 52:20
  And particularly if it's your first home, this is the first time you've done a lot of these things.
• 52:25
  So I think that that can be scary whatever it is, even if you understand it. But, yeah, I
• 52:31
  definitely think that the more you learn about something, whether it's investing in the stock market
• 52:36
  or in property, when you understand it, it takes away that fear because the risk of buying a
• 52:42
  prop, like obviously you need to do things like make sure you're not in a flood zone or like,
• 52:46
  that there's not a spest-os all through the, you know, there's lots of things that people,
• 52:51
  there's like a big checklist of stuff that you need to do to make sure that you're mitigating your
• 52:55
  risk. But understanding where you're buying the purpose, the approach to the investment is so
• 53:01
  important. And don't compare yourself to others. I know it's really hard to look around and be like,
• 53:08
  Mary's got, you know, she's got a house and she's younger than me or she earns less than me or,
• 53:13
  you know, like, it's so easy to get caught up in that or, you know, I should have a house by now,
• 53:18
  like all those conversations, like, and I think it's really important to know that you never know
• 53:24
  what goes behind the scenes in terms of those investment systems for people, you know, they could
• 53:28
  be in debt to the eyeballs and really struggling to service their mortgage, but they've got this
• 53:33
  fancy house, you know, like, it's like, everyone's on their own property journey and I think it's,
• 53:39
  and also don't get caught up on being like, but what if this is the wrong house or what if there's
• 53:44
  a better one, if, you know, that might be in another suburb or what if the suburb doesn't grow as much
• 53:50
  as that suburb and I buy that, you know, like, you can get almost what's it when you get like
• 53:55
  fatigue, you know, you get, you know, decision paralysis and you actually don't even,
• 54:01
  don't even do anything because you're so scared that it's, that it might be the wrong decision.
• 54:05
  I think if you've done the numbers, you know that you can service the amount of debt that you're
• 54:08
  taking, you know, and you look at pretty high-level New Zealand health prices, do seven to eight percent
• 54:14
  a year, you know, yeah, as long as you can, you're not taking on a lot of debt and increasing your
• 54:21
  risk that way, you should be, you should be fine. Does anyone have questions or things that they
• 54:26
  want to talk about or ask? Okay, great. I'm going to pass them like, oh, it's not going to be
• 54:31
  coming to me as I'm, yeah. Okay. I messaged you the other day, so for about buying house, my name's
• 54:39
  Olivia. So I'm in a position where I earn a good income, I have great savings and investments,
• 54:47
  I earn too much for government qualifications or all those housing, call housing things I have
• 54:53
  out there. Congratulations. Thank you. I don't earn enough because as a, you know, as a single person,
• 54:59
  the bank won't give you what you want. I'm really stubborn and the fact that I'm really set on
• 55:05
  the areas that I want to buy. And so I could have bought elsewhere, but I just don't want to, it's
• 55:09
  my first home, I want to live in it. I've recently come across off the back of our conversation,
• 55:15
  rent to buy, like, loanings games, and I know it's on the Trade Me website where some companies
• 55:21
  will give you a part of a deposit and they'll own 10 to 15% of your house. You've got five or 10
• 55:26
  years to pay them back. And I'm just wondering what your thoughts are on there in terms of obviously
• 55:31
  the banks are cautious and the fact that they won't give you that amount for a reason, but these
• 55:36
  companies will. What do you think of the risk in that? Because I feel like I could serve as it,
• 55:44
  but there's a reason the banks aren't, aren't lending it to you. So, yeah, what are your thoughts on
• 55:49
  those companies? Do you think that's safe? Is it sensible? Yeah, I mean, yeah, I think it's
• 55:58
  it's frustrating, I think, when the banks, you know, and you're like, look, I can service this,
• 56:03
  like, just come to the party and they're like, no, like they've got all their checks and balances,
• 56:07
  they have to do. But I think if I know a few people who have used them and one thing I would say is
• 56:14
  just do you know anyone that's using get recommendations like and maybe use a mortgage advisor or
• 56:21
  mortgage broker because I was quite surprised at the, I guess the breadth that mortgage brokers
• 56:30
  could go to in terms of what would you call it? Like not alternative banks, but just like I was
• 56:36
  kind of going to the big ones and there's so many other lending providers out there that
• 56:41
  are kind of willing to come to the party for different arrangements and rent for buyers is one
• 56:47
  of those. So I think as long as they've got a good reputation, maybe they've been vetoed by someone
• 56:55
  else you know, or something, but there is an increasing number of those kind of places popping up
• 57:02
  because there's self-employed people that banks won't lend to, you know, there's freelance,
• 57:08
  there's contractors that are struggling, there is, you know, people who don't have a partner
• 57:14
  and nor should they have to just purchase a property, you know, and so yeah, there is a lot of
• 57:21
  kind of those alternate lending providers popping up. So I don't think they're like, I don't
• 57:25
  want to say blanket rule that they're dodgy, I think I would just say, yeah, maybe just get some
• 57:31
  advice on that to give you maybe peace of mind, yeah. I was just going to say the same, it's just you
• 57:38
  diligence on it, so having a really, when you're going to step into buying this property, you're
• 57:43
  going to need to have a lawyer alongside you at any rate, so it would be going through those agreements
• 57:49
  and those terms and checking out the reviews to give you that peace of mind.
• 57:53
  This is for Vic, so what was it about your first home, what features, you know, how you talked
• 57:58
  about the bathtub and the thing that you were like, oh my god, so cute, I want to. What were the
• 58:02
  features that you and your dad, if he helps you, talked about that you were like, okay, these are
• 58:07
  really good, this has got strong bones and this is why I'm going to purchase this particular house.
• 58:12
  Yeah, yeah, so I, it's actually, I kind of, I shouldn't really disclose this, but it was a funny
• 58:21
  story we were actually going to an open home, a few houses down and we were leaving that open
• 58:27
  home and that wasn't absolute like, unlivable, you'd have to, you wouldn't even have to live it,
• 58:32
  you have to do it up before you even got in there, like the doors were, there wasn't even doors,
• 58:35
  you know, there's holes in the floor, it was horrible. And I was like, and that was kind of just
• 58:41
  at the edge of my budget and I was like, I'm going to have to spend like hundreds of thousands
• 58:45
  of getting out of scratch. So anyway, we left there and I was kind of feeling a bit deflated
• 58:48
  and then there was one literally three doors down that was like completely livable and I remember
• 58:55
  my mom, she was like, come on, come in, let's have a look and I was like, what's the point?
• 58:58
  Like it's, there's no point anyway walked in and I'm sorry, why was there no point? Because it was,
• 59:03
  it was going to be way out of my price range. If this, if this shitter just three doors down was,
• 59:07
  was was on the edge of what I was willing to spend, there was no way that so anyway,
• 59:12
  went there and the guy was just, the real estate was literally just closing the open home
• 59:17
  and I was so embarrassed and mum was like, come on, come on, I was like, no, no, no, it's fine,
• 59:21
  and then we went in and dad just banging on the walls and stuff and I think this is like going
• 59:28
  with my parents, they weren't helping me get into it financially but I think just like coming back
• 59:32
  to you saying, just having that piece of mind of someone else has kind of got your back or just
• 59:38
  that that, yeah, this looks like a good house or no, it does, you're just having that, I didn't
• 59:43
  have a partner so it was just kind of that voice of reason I guess. Anyway, so it's dragging them
• 59:47
  along to the open homes and yeah, we went around that and I was like, oh, I was like, I actually
• 59:52
  quite like this one and then the guy said the price, I think we emailed him afterwards or something
• 59:56
  anyway but and I was like, oh, that's so weird, why is it like almost cheaper than the other one
• 1:00:04
  anyway? We went along to the auction, it was on a Tuesday afternoon, no one turned up, turned up,
• 1:00:09
  it said me. Did you do any like, DD on it before? Did you see, look and see if why it was so low?
• 1:00:16
  Yes. No, dad did the banging on the walls and and he, I don't know, it was, I had a friend who
• 1:00:24
  was a builder who drove past and had a lock and couldn't see anything wrong, like they didn't
• 1:00:27
  charge it. I should have got a bit full building report but I, yeah, I didn't and I mean, I wouldn't
• 1:00:36
  say that I wouldn't, that's not advice I'd give to anyone, I would say doing a building report
• 1:00:39
  because this is the largest financial purchase I've ever made and the fact I didn't like, I don't
• 1:00:45
  know what I was thinking but I think I just got caught up in emotion. The fact that you bought
• 1:00:47
  your mum and dad and they weren't like, I know. Well, well, yeah. Anyway, so we went across the auction
• 1:00:53
  and I was getting quite emotional and was like, and then I get, I was like, and then it got to
• 1:00:58
  the amount as well, I went to spend and I was still trying to and yeah, my parents had to like hold
• 1:01:02
  me back and I think that's why they, on agents by yourself? Yeah, no, no, why are you still going
• 1:01:07
  for it? Because they sent the reserve price because so the, you're going against the auctioneering
• 1:01:10
  and I'm like, yeah, yeah, and then the real estate agent comes and talks to you, I was like, come on,
• 1:01:13
  you can do an extra five grand, I'm like, okay, I'm like, I'm like, I don't need a couch, I can
• 1:01:19
  just put it into the, you know, I can just have no furniture for a while, it's fine. And then,
• 1:01:23
  yeah, it was getting quite carried away and then I honestly thought, yeah, it was, had to stop
• 1:01:30
  and I was like, damn it, I didn't get the house and it hadn't reached reserve and then we went
• 1:01:35
  into kind of this negotiation where you, the one thing that we, one thing that you can do is do
• 1:01:41
  non-financial incentives. So I was like, look, I have the money, I don't need to sell another house
• 1:01:47
  to buy this one, I, I can move really quickly, I did like a three week settlement, which is
• 1:01:54
  incredible, like, don't, don't, again, do not recommend that either. And yeah, so that was for them,
• 1:02:02
  that meant they get the money sooner. So that was quite a positive. So I was like, look, I can move
• 1:02:05
  on settlement, I can, you know, and so we went into negotiation and then ended up, I ended up
• 1:02:15
  going a little bit above my price and then they came to the party, it was so weird though, they were
• 1:02:18
  literally in the room next door and the real estate agent was like running between us and like
• 1:02:22
  scripting the numbers and then running it and I was like, can't we just talk face-to-face,
• 1:02:25
  anyway. And now I forgot on the question, oh, I was like, how do I, sorry, I, so that's right,
• 1:02:32
  I remember the, the house next door had been completely done up and it had this underground garage,
• 1:02:39
  it had a pool, it was so nice and it was exactly the same layout. And so in my mind, I was like, okay,
• 1:02:45
  I can see the potential of what I can do to this house, still haven't done that, but, because it
• 1:02:53
  was expensive, but again, if I can see this, then when I come to sell it, someone else will be
• 1:02:58
  able to see this. And so that was kind of the, the mentality of what I can add, how I can add value,
• 1:03:05
  it's also got a massive backyard and so I could also subdivide and do that. So I was going into it,
• 1:03:13
  like yes, this is an area I want to live, I can also see potential in it and it had some
• 1:03:19
  spare bed rooms which I got friends in to help me with, with the mortgage. So that was also a
• 1:03:24
  caveat of the amount that I was borrowing from the bank was that I had to get flatmates had to
• 1:03:28
  have cover the rent, which is also a way that you can do it if the bank won't lend you or, you know,
• 1:03:34
  is asking how you're going to service it with your, with your income. So there was, yeah, there was
• 1:03:38
  lots of kind of that went in, went into that decision. I did actually look at a few suburbs
• 1:03:46
  further out and I think for me, I was like, you know what, I think I want to pay a little bit more,
• 1:03:52
  kind of what you're saying, and live in the area I want to live in. And that was just a personal
• 1:03:58
  decision. I think I was like, I can move out there when I need a more space, I've got kids, you
• 1:04:04
  know, and maybe I'm not commuting into the city every day, like that was kind of my mentality. There's
• 1:04:08
  a bit of, but if it was an investment probably, completely different, it would be like, yeah, so,
• 1:04:14
  yeah, I'm sorry, there's a long-winded answer. So I've got another question. So my partner and I are
• 1:04:19
  looking at houses, just very loosely at the moment. And I'm thinking 700, 800,000, that would be like
• 1:04:26
  the max that I would feel comfortable going into debt. My dad is like pushing me to apply
• 1:04:32
  for more. He's like, just go up to $900,000, get the mortgage broker to, you know, apply
• 1:04:38
  you for that. He's like, you know, it won't be that much extra a week if you do. And I'm like,
• 1:04:42
  well, you're not the one paying. I don't know what he thinks. I think I'm like adding 50 cents a
• 1:04:47
  week to the mortgage or something, but I just wanted to know what your thoughts are on applying for
• 1:04:51
  more than you would actually want to spend. And if that's worth it or not. Yeah, I think there's,
• 1:04:58
  like if I was going to do that, I, you'd be able to get obviously a, a higher price house.
• 1:05:06
  And an awkward. But are you meaning not necessarily even spend it, but just apply for it?
• 1:05:10
  Yeah, he's just like, just apply for it. And I'm like, that's, does that make sense?
• 1:05:14
  You don't have to spend it all, you know, pre-approval on a $900,000 mortgage is not
• 1:05:19
  a target. It's a, you know, it's, it's, you know, you can, you can borrow up to that amount.
• 1:05:26
  But what some people I know have done is they have, yeah, they've got the max that they can get,
• 1:05:33
  which might be a bit above what they actually feel comfortable with. And then being super strict
• 1:05:38
  to pay that down and got, got an agreement with the bank that they're going to pay, you know,
• 1:05:41
  a large amount of principle off in that kind of first 12 months period. So it quickly goes back
• 1:05:49
  down to that 800,000. And that's a way you can do it as well. But you need to be strict because otherwise,
• 1:05:55
  you'll be, you'll be with a $900,000 mortgage and that all, if that wasn't factored into what
• 1:06:00
  you could afford, then that will start to hurt. So yeah. But also, I think that's a really good
• 1:06:05
  question because there's the kind of phomo mentality that kicks in. You're like, oh, it's already an extra
• 1:06:11
  this amount. Oh, well, it's only like you had in the auction. And I think you do need to have
• 1:06:17
  your cut off limit in terms of what your lifestyle would look like if that's how much debt you're in.
• 1:06:22
  Because if you stretch yourself, and I've seen so many friends do it, stretch on mortgage, on cars,
• 1:06:30
  on all the things that look externally like financial success. And the stress that those people
• 1:06:36
  are under because it's really above and beyond what they should be doing. To be able to have any
• 1:06:41
  money to do any of the things they want to do, it's kind of like a real fine balance. And for me,
• 1:06:47
  personally, I'm just came to get on the ladder. If I'm on the tiniest little peg on the floor,
• 1:06:52
  I actually don't care. You know, like I would rather do that than be in a position where I can't
• 1:06:59
  even afford to go out for coffee because I'm so stressed out about my repayments or, you know,
• 1:07:03
  and I think also when you're buying with someone, particularly in a relationship as well,
• 1:07:08
  you're in debt together. Like that is also a financial stress. You know, you're technically
• 1:07:12
  business partners. You kind of are, I guess, and even before you buy a house. But I do think that
• 1:07:17
  that's something that's like not really spoken about. A lot of people are like, well, leverage more
• 1:07:21
  because it means you can potentially make more, which is true. But it's at what cost and you kind
• 1:07:26
  of have to decide what that is for you. Yeah. And if you're lying in bed, absolutely stressing
• 1:07:31
  every night and you can't sleep, that's not, yeah, don't do that. Well, you have other financial
• 1:07:35
  goals that you want to go on a holiday once every two years, but you know there's absolutely no way
• 1:07:39
  you could do that. If you stretch to that amount, I think it's just knowing your numbers properly.
• 1:07:45
  Any other questions? No more? No more. Well, if you do think of any questions or anything,
• 1:07:54
  definitely come through to us. Do you miss email us? We'll get those answered for you. Yeah, I think
• 1:07:59
  one of the things that we're speaking about before we started this event, having this conversation
• 1:08:04
  was like, I think as someone who has experienced like the bank saying, no, no, no, no, and then you
• 1:08:13
  know, just like the emotional roller coaster that is like doing my best to try and get on the tiny
• 1:08:19
  peg on the floor, you know, like it's been really hard. And I think that for me, what it's made me
• 1:08:24
  realise is the creativity involved not in like drinking the bags, but actually in the way in which
• 1:08:32
  you can make money in property, I think that there's such a New Zealand centric misconception that
• 1:08:40
  the way that that bought her first property or Emily bought her first property is the only way.
• 1:08:46
  And at the moment, the process I've been going through is like looking at all of the different
• 1:08:51
  options that I can make money, whether it's because for me, that's the purpose of investing in
• 1:08:56
  property. It's not actually an emotional purchase. I don't live in New Zealand. I'm not buying my first
• 1:09:00
  home, but it's been fascinating to learn all of the different ways that I can do it, whether it's
• 1:09:06
  buying really low in a different area that I think has heaps of potential and adding a certain
• 1:09:11
  amount of value and being able to rent it out without having to pay any kind of like top up.
• 1:09:15
  Like there's so many different ways of doing it and I'm kind of doing a whole lot of research
• 1:09:19
  on that at the moment. So in like the coming months, we'll definitely share some more resources
• 1:09:26
  in different ways of investing in property that are outside of your traditional white-pick events
• 1:09:32
  in Great London. Yeah. So hopefully that's helpful for people. Thanks. Thanks so much for coming.
• 1:09:38
  Thanks Emily. Thanks. Thank you so much for listening to Raising the Curve. These conversations
• 1:09:42
  are designed to teach you everything you need to know to be better with your money,
• 1:09:45
  saving, to investing, to talking with your friends about your salaries or that stuff.
• 1:09:49
  And if you like what you heard, we would love if you could please hit subscribe,
• 1:09:52
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• 1:09:55
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• 1:10:00
  Yeah. Yeah. So please do it. Okay. Love you. Bye.
• 1:10:04
  Okay, quickly, the curve was created to empower and educate you about investing, but we are not
• 1:10:08
  financial advisors. Our platform exists for educational purposes only and it doesn't provide
• 1:10:13
  personalized investing advice for your individual needs and should not be relied upon to make
• 1:10:17
  an investment or financial decision. And always remember to do your own research
• 1:10:21
  before making any investment or financial decision. We're here for any knowledge and support
• 1:10:26
  you need, but the final call is always yours. And thanks for being here. You got this. Yeah,
• 1:10:30
  we know you got this.