Hello.

Hello.

I am Paula Bunett, and welcome to my New Zealand Herald podcast Ask Me Anything. Now. One thing I've bluntened life is it's never too late to learn something new.

I am Paula Bunett, and welcome to my New Zealand Herald podcast Ask Me Anything. Now. One thing I've bluntened life is it's never too late to learn something new.

So on this podcast, I talk to people from all walks.

So on this podcast, I talk to people from all walks.

Of life to hear about how they got to where they are, get some advice and guidance.

Of life to hear about how they got to where they are, get some advice and guidance.

On some of life's biggest questions.

On some of life's biggest questions.

Right, a bit of a different episode for you.

Right, a bit of a different episode for you.

Today.

Today.

We're nearing the end of season five of Ask Me Anything, and we have had so much great advice across the season. But today we've bought in a big gun for some really practical advice on a topic that is often top of.

We're nearing the end of season five of Ask Me Anything, and we have had so much great advice across the season. But today we've bought in a big gun for some really practical advice on a topic that is often top of.

Mind for many. Kiwi's Property.

Mind for many. Kiwi's Property.

Ed McKnight is the resident economist at Opus' Partners. He is also the co host of the Property Academy podcast and co author of Wealth Planned, How to Invest in New Zealand Property and Retire on real Estate.

Ed McKnight is the resident economist at Opus' Partners. He is also the co host of the Property Academy podcast and co author of Wealth Planned, How to Invest in New Zealand Property and Retire on real Estate.

Wow.

Wow.

He is with me, Hey, Ed, how are you?

He is with me, Hey, Ed, how are you?

Oh, Paul, it's a great honor to be speaking with you.

Oh, Paul, it's a great honor to be speaking with you.

It's good of you to come on two roles for my podcast, so that it's quite easy. I do first, as I'm allowed to ask you anything. Are you comfortable with that? Oh?

It's good of you to come on two roles for my podcast, so that it's quite easy. I do first, as I'm allowed to ask you anything. Are you comfortable with that? Oh?

Yeah, I think it's going to be great.

Yeah, I think it's going to be great.

You don't have a choice anyway, what do you do? What do you do? Don't ask me about And then the other one.

You don't have a choice anyway, what do you do? What do you do? Don't ask me about And then the other one.

I call it the safe space, which means even if I ask you something, you say something stupid.

I call it the safe space, which means even if I ask you something, you say something stupid.

I'm not I'm not going to judge you on it.

I'm not I'm not going to judge you on it.

Just quietly and you get right. Can you believe he said that? Oh my god?

Just quietly and you get right. Can you believe he said that? Oh my god?

I mean I had to confess to Ed before we went live on this, and I tried to joke at a speech this week and it went quite badly.

I mean I had to confess to Ed before we went live on this, and I tried to joke at a speech this week and it went quite badly.

So here you go. If you could invite anyone to dinner, who would to be?

So here you go. If you could invite anyone to dinner, who would to be?

I'd actually say, I'm my grandfather. And I'll tell you the reason why. I know, Oh you giving me a face, pook.

I'd actually say, I'm my grandfather. And I'll tell you the reason why. I know, Oh you giving me a face, pook.

I am giving you us. No, I'm giving you the soft spo. There is gorgeous face.

I am giving you us. No, I'm giving you the soft spo. There is gorgeous face.

But I'll tell you the reason why. Because when he was alive, we didn't get on very well, and you know, for I think for a year we didn't actually speak. And the reason I'd invite him, and I've actually thought about this, It's not some canned answer that I'm giving you. But the reason I'd invite him is I'd want to make amends. And everyone said, well, the reason you too didn't get on is because you were too similar. And I bet you if I talked to him today, I'd have a lot more respect for him, because at age kind of mid thirties, he packed up life in Ireland and he brought us three young kids over here to New Zealand, and he started a new life and a small town called Harwarder, which is in South Tartanaki. And I always thought that that takes a lot of gumption. And I think that's the beautiful thing about New Zealand is that so many of us, our ancestors, have come from somewhere else, and all of them came here seeking a better life. And I just think it'd be really nice to get into my grandfather's head and kind of hear that story, which I assume is there.

But I'll tell you the reason why. Because when he was alive, we didn't get on very well, and you know, for I think for a year we didn't actually speak. And the reason I'd invite him, and I've actually thought about this, It's not some canned answer that I'm giving you. But the reason I'd invite him is I'd want to make amends. And everyone said, well, the reason you too didn't get on is because you were too similar. And I bet you if I talked to him today, I'd have a lot more respect for him, because at age kind of mid thirties, he packed up life in Ireland and he brought us three young kids over here to New Zealand, and he started a new life and a small town called Harwarder, which is in South Tartanaki. And I always thought that that takes a lot of gumption. And I think that's the beautiful thing about New Zealand is that so many of us, our ancestors, have come from somewhere else, and all of them came here seeking a better life. And I just think it'd be really nice to get into my grandfather's head and kind of hear that story, which I assume is there.

How old were you when he passed?

How old were you when he passed?

I would have been fifteen. Yes, you could imagine you have a.

I would have been fifteen. Yes, you could imagine you have a.

Completely differently a relationship with him now because you're.

Completely differently a relationship with him now because you're.

Thirty two about Sune thirty two, thirty.

Thirty two about Sune thirty two, thirty.

One better not age you had.

One better not age you had.

I I've got a daughter older than you to see you know, so we've set there so that I can mother you.

I I've got a daughter older than you to see you know, so we've set there so that I can mother you.

How good's your chicken? Pop Eye?

How good's your chicken? Pop Eye?

Paula ah smoked fish pie. That's the one that's to die for, she says.

Paula ah smoked fish pie. That's the one that's to die for, she says.

She.

She.

Okay, what we're going to do it is in the first part, we're going to each to know you a little bit better, and then we're going to spend a bit more time on the second part of the podcast. Because everyone always wants to talk property. I of course met Bailey's real estate, mainly do commercial I've got to say it is more of my jam.

Okay, what we're going to do it is in the first part, we're going to each to know you a little bit better, and then we're going to spend a bit more time on the second part of the podcast. Because everyone always wants to talk property. I of course met Bailey's real estate, mainly do commercial I've got to say it is more of my jam.

But I was talking to the.

But I was talking to the.

Residential guys this morning, so I said to them, I'm an expert for the podcast this afternoon. Hey, so you're interesting. So you are only thirty one. There you go, and you have so you're an economist. So have you studied that at university?

Residential guys this morning, so I said to them, I'm an expert for the podcast this afternoon. Hey, so you're interesting. So you are only thirty one. There you go, and you have so you're an economist. So have you studied that at university?

Yeah, so it's quite interesting. I did both economics at Auckland University and wake it all. But I also did a double major with opera singing.

Yeah, so it's quite interesting. I did both economics at Auckland University and wake it all. But I also did a double major with opera singing.

I knew the opera and that's why I was trying to put the two things together and couldn't quite get there. So, I mean, there's so many questions in there, right, So how on earth did you know that you could were interested and could sing opera?

I knew the opera and that's why I was trying to put the two things together and couldn't quite get there. So, I mean, there's so many questions in there, right, So how on earth did you know that you could were interested and could sing opera?

Oh well, I got into it when I was probably ten years old, and you know, you go along to church and you sing along with everybody else, and if you're the one who always wants to be the loudest, as that was probably me. Then we just got singing lessons and it continued for years, you know. But there's a lot of.

Oh well, I got into it when I was probably ten years old, and you know, you go along to church and you sing along with everybody else, and if you're the one who always wants to be the loudest, as that was probably me. Then we just got singing lessons and it continued for years, you know. But there's a lot of.

Dramas, there's a lot of gramas in there, and opera is a particular one with a higher well I would have thought higher skill level. So for you, as a ten eleven year old to go down that path is interesting in itself.

Dramas, there's a lot of gramas in there, and opera is a particular one with a higher well I would have thought higher skill level. So for you, as a ten eleven year old to go down that path is interesting in itself.

Well, I just thought it was quite interesting. And I think that was kind of the like when you go and get singing lessons as a ten eleven year old, that's kind of the They start you on really light, classical kind of stuff and then you kind of graduate into it if you're kind of inclined that way, if you can't think, oh, this is kind of cool. And so, like many skills, you start with your first lesson and you just never stop. And the most amazing thing is that I look at people who have actually made opera singing their career and there are some amazing people. There's a guy called Felipe Manu who was my flatmate when we were twenty one years old. He went to the same school as me and he was a very normal guy from South Auckland and he happened to start seeing lessons as well. And in August this year I'm going to go see him play the lead at the Sydney Opera House. And he's made it his career all around the world. And that's a really good example of if you've got some talent and you start with your first lesson and you never stop, you will get somewhere.

Well, I just thought it was quite interesting. And I think that was kind of the like when you go and get singing lessons as a ten eleven year old, that's kind of the They start you on really light, classical kind of stuff and then you kind of graduate into it if you're kind of inclined that way, if you can't think, oh, this is kind of cool. And so, like many skills, you start with your first lesson and you just never stop. And the most amazing thing is that I look at people who have actually made opera singing their career and there are some amazing people. There's a guy called Felipe Manu who was my flatmate when we were twenty one years old. He went to the same school as me and he was a very normal guy from South Auckland and he happened to start seeing lessons as well. And in August this year I'm going to go see him play the lead at the Sydney Opera House. And he's made it his career all around the world. And that's a really good example of if you've got some talent and you start with your first lesson and you never stop, you will get somewhere.

Yeah. So there's something about dedication, right, and there is something to really committing. John Key used to tell me that, and he'd a particular his story about squash was his thing, and he would say, you know, he had two people he knew one was both were talented, but one was supremely talented.

Yeah. So there's something about dedication, right, and there is something to really committing. John Key used to tell me that, and he'd a particular his story about squash was his thing, and he would say, you know, he had two people he knew one was both were talented, but one was supremely talented.

It wasn't that one that went on to the world stage.

It wasn't that one that went on to the world stage.

It was the other one because they had hard work and dedication behind them.

It was the other one because they had hard work and dedication behind them.

Yeah, and not stopping. So you know, I'm not saying that I'd be as successful as my friend Felipe if I never stopped. But I'm the one who stopped, and he's the one who's in at the Sydney Opera House because he never stopped going. I think there's a really good lesson in that. It wasn't just that he's very talented, though he absolutely is, is that he didn't stop.

Yeah, and not stopping. So you know, I'm not saying that I'd be as successful as my friend Felipe if I never stopped. But I'm the one who stopped, and he's the one who's in at the Sydney Opera House because he never stopped going. I think there's a really good lesson in that. It wasn't just that he's very talented, though he absolutely is, is that he didn't stop.

Now you you believe that there is a link between an analytical brain and being musically talented.

Now you you believe that there is a link between an analytical brain and being musically talented.

Don't you talk me through that?

Don't you talk me through that?

Well, I personally do think that it's quite amazing. When you go and talk to people who are highly analytical, often they've got some sort of artistical musical side. You see it all the time. I remember when I was doing a singing competition when I was very young. I would have been fifteen or sixteen years old, and you're standing up there and the judges start telling you about their lives and some of them have maths degrees, and it's just really there's this really strange connection between primarily maths and music that you often see with a lot of classical musicians. Now it's not all of them, you know, some of them are kind of genuine creatives, but there is this weird thing that you often see people who are quite good at math, are also often quite good.

Well, I personally do think that it's quite amazing. When you go and talk to people who are highly analytical, often they've got some sort of artistical musical side. You see it all the time. I remember when I was doing a singing competition when I was very young. I would have been fifteen or sixteen years old, and you're standing up there and the judges start telling you about their lives and some of them have maths degrees, and it's just really there's this really strange connection between primarily maths and music that you often see with a lot of classical musicians. Now it's not all of them, you know, some of them are kind of genuine creatives, but there is this weird thing that you often see people who are quite good at math, are also often quite good.

At music, and you're on yours, you know, so often they've got that absolute They may not have the talent, but they've got the commitment to the arts and a genuine interest in it, isn't it.

At music, and you're on yours, you know, so often they've got that absolute They may not have the talent, but they've got the commitment to the arts and a genuine interest in it, isn't it.

You know, I couldn't help.

You know, I couldn't help.

I was just you know, I was thinking about Sir metal Hill, and you know, just so many people like that as well that have got and I would put them in the sort of analytical brain as well and that sort of context, and they've gone down that kind of He's very much into the arts and what he does, and.

I was just you know, I was thinking about Sir metal Hill, and you know, just so many people like that as well that have got and I would put them in the sort of analytical brain as well and that sort of context, and they've gone down that kind of He's very much into the arts and what he does, and.

I mean so much so he started his own international violin competition which is very highly acclaimed as well. But you see it a lot with when I worked for the Auckland Phnemonia Orchestra for a while and sponsorship and you get to meet a lot of people who support the arts, and you often find there are a lot of accountants, there, a lot of lawyers, and it's people who are quite analytical who just like it for some reason or the other, or studied music when they were kids and have just continued on that love of it.

I mean so much so he started his own international violin competition which is very highly acclaimed as well. But you see it a lot with when I worked for the Auckland Phnemonia Orchestra for a while and sponsorship and you get to meet a lot of people who support the arts, and you often find there are a lot of accountants, there, a lot of lawyers, and it's people who are quite analytical who just like it for some reason or the other, or studied music when they were kids and have just continued on that love of it.

M Okay, So talk me through the ad that you did because you're you know you you thought you we wanted to twig at the ASP or something. Was that it?

M Okay, So talk me through the ad that you did because you're you know you you thought you we wanted to twig at the ASP or something. Was that it?

And so you did you literally take out your own ads.

And so you did you literally take out your own ads.

Yeah, so what I did. This was back in the day when Facebook was a little bit more loose. So I was working at the Orchestra and I saw a job going and Paula, it's so embarrassing when I tell this story because the ending is so obvious. But I saw a job going for like sponsorship manager at ASB, and I thought, that sounds like a great job. I'd like to go and do that. Only issue is they wanted somebody with seven plus years experience and I had one and a half. And I thought, well, I'm not going to let that stop me because I once saw I once went to a speech by John Key where he talked about that you can't you've got to get yourself in the room. You've got to make things happen. Okay, fine, I'm going to make it happen. And so I thought, well, how do I make myself stand out because I've got no experience. But I think I'm okay, So we'll just see how we go. And that was back in the day where you could target on Facebook people who worked for a specific company. So I built a website, a very basic one talking all about why ASB should hire me. And I thought, okay, well that's fine, but how do I get this in front of the HR managers? And so I wrote this website page about why you, as an ASB employee employee, should recommend me to the HR department and you should go down the hall to the HR department and say, this guy's pretty interesting, he'd be a great colleague, give him an interview. And so then I spent I probably spent about twenty seven dollars and fifty cents running these Facebook ads targeting ASB employees living in Auckland. And you know, it got backed up, or it got noticed by a couple of people in their marketing team being like, well this is very very interesting. I got an interview, didn't get the job, but that's okay because they are very nice about it. And I got I got a bit of press, and I got job offers from quite a few different companies. So that's how I kind of progressed within my career. But I think what that was all about is graduating with some economics qualifications and some music qualifications. I think certainly the start of my career is a bit jumbled because nobody really knew what to do with me, and so I kind of had to find my own way, and eventually I stumbled into what I'm doing now. I've been doing it for the last five years, and the amazing thing is those skills have come in handy, just simply because you know, we've done the daily podcast for the last five years. It's a lot of presenting skills and I didn't know it at the time, but the opera singing helped me do what I'm doing today.

Yeah, so what I did. This was back in the day when Facebook was a little bit more loose. So I was working at the Orchestra and I saw a job going and Paula, it's so embarrassing when I tell this story because the ending is so obvious. But I saw a job going for like sponsorship manager at ASB, and I thought, that sounds like a great job. I'd like to go and do that. Only issue is they wanted somebody with seven plus years experience and I had one and a half. And I thought, well, I'm not going to let that stop me because I once saw I once went to a speech by John Key where he talked about that you can't you've got to get yourself in the room. You've got to make things happen. Okay, fine, I'm going to make it happen. And so I thought, well, how do I make myself stand out because I've got no experience. But I think I'm okay, So we'll just see how we go. And that was back in the day where you could target on Facebook people who worked for a specific company. So I built a website, a very basic one talking all about why ASB should hire me. And I thought, okay, well that's fine, but how do I get this in front of the HR managers? And so I wrote this website page about why you, as an ASB employee employee, should recommend me to the HR department and you should go down the hall to the HR department and say, this guy's pretty interesting, he'd be a great colleague, give him an interview. And so then I spent I probably spent about twenty seven dollars and fifty cents running these Facebook ads targeting ASB employees living in Auckland. And you know, it got backed up, or it got noticed by a couple of people in their marketing team being like, well this is very very interesting. I got an interview, didn't get the job, but that's okay because they are very nice about it. And I got I got a bit of press, and I got job offers from quite a few different companies. So that's how I kind of progressed within my career. But I think what that was all about is graduating with some economics qualifications and some music qualifications. I think certainly the start of my career is a bit jumbled because nobody really knew what to do with me, and so I kind of had to find my own way, and eventually I stumbled into what I'm doing now. I've been doing it for the last five years, and the amazing thing is those skills have come in handy, just simply because you know, we've done the daily podcast for the last five years. It's a lot of presenting skills and I didn't know it at the time, but the opera singing helped me do what I'm doing today.

So tell us what you're doing today.

So tell us what you're doing today.

Just give me the app shot of the company that you're worth and what your role is.

Just give me the app shot of the company that you're worth and what your role is.

Yeah. So I'm the economist at Opu's Partners, and I was really lucky i joined. I was when we were only fifteen people as the company, and over the last five years, I've just had my fifth anniversary here, we've grown it to a team of about ninety people. And because of that growth and because I was part of it, I was really lucky the own the business decided to cut me in as a business partner, and so I'm really lucky because I was just working on some like techtop content before I came on to talk to you, you know, and I was reflecting that when I was twenty four, I was in a lot of debt. I had a lot of credit card debt, well over fifteen grand, and just to put that into context, because I wasn't earning a lot at the time, I would have had to work from the first of January to about the sixth of June to pay off that debt. Now that's just working, paying tax and paying off debt, not paying my rent, not paying for groceries or anything like that. It's my own fault. But I got myself into the wrong situation, and from being in that situation standing in the shower thinking how did I let my life become like this when I was twenty four to sitting here at thirty one, seven years later. You know, I don't feel like I've made it yet. I don't think I'm some guru, but I think that, you know, twenty four year old me would be pretty proud of the progress that's been made.

Yeah. So I'm the economist at Opu's Partners, and I was really lucky i joined. I was when we were only fifteen people as the company, and over the last five years, I've just had my fifth anniversary here, we've grown it to a team of about ninety people. And because of that growth and because I was part of it, I was really lucky the own the business decided to cut me in as a business partner, and so I'm really lucky because I was just working on some like techtop content before I came on to talk to you, you know, and I was reflecting that when I was twenty four, I was in a lot of debt. I had a lot of credit card debt, well over fifteen grand, and just to put that into context, because I wasn't earning a lot at the time, I would have had to work from the first of January to about the sixth of June to pay off that debt. Now that's just working, paying tax and paying off debt, not paying my rent, not paying for groceries or anything like that. It's my own fault. But I got myself into the wrong situation, and from being in that situation standing in the shower thinking how did I let my life become like this when I was twenty four to sitting here at thirty one, seven years later. You know, I don't feel like I've made it yet. I don't think I'm some guru, but I think that, you know, twenty four year old me would be pretty proud of the progress that's been made.

Oh that's extraordinary, and I think it's a big story to tell as well. End I think that you're going to have some very good advice for us. So let's take a quick break and then you are going to get all the advice you need around the property market and investing in.

Oh that's extraordinary, and I think it's a big story to tell as well. End I think that you're going to have some very good advice for us. So let's take a quick break and then you are going to get all the advice you need around the property market and investing in.

Property with Ed and me. Thanks for coming back in now.

Property with Ed and me. Thanks for coming back in now.

You are a big investor and believer in property investment, so let's start there. Why is investing in property such a good idea in your opinion?

You are a big investor and believer in property investment, so let's start there. Why is investing in property such a good idea in your opinion?

I think the main reason is the only thing that makes property special is the fact that you can borrow money against it. Right, So a lot of Kiwis they're out there, they want to grow their wealth, but they might not have a lot of money spare that they can put into shares, Keiwi, saver, term deposits, all of that kind of thing. But what a lot of people realize don't realize, is that you can buy a house without having a lot of cash. I just walk you through my situation. Bought a house when I was twenty six, it went up in value, paid down some debt, and then I thought, okay, well I want to go and buy another house. Well, I didn't have the deposit, I hadn't saved it up, But because my house had gone up in value, I borrow some money against that house as the deposit, and I take that money that I borrowed from the bank, and I go put that down as the deposit on another investment property, and I borrow some money from the bank to purchase that, and I was able to buy my I guess second investment property with no cash. Now we call that the no cash needed method. It is a pretty classic way that a lot of care we start investing in property. Now, if you've invested in property before, you know this, and it sounds really basic. If you've never invested in property before, it can be pretty mind blowing. So I often say to first time investors, you're effectively using your house or houses to go and buy more houses, and then as those increase in value or you pay off some of the debt, that's where you start to earn more of a return. But it's the idea of being able to borrow money against it that's what makes property really special. So if I think about that specific property that I bought with no cash, if it goes up in value by ten or twenty k, which is pretty reasonable on an average year, then that ten twenty k doesn't go to the bank. I get to keep that even though I borrowed all of the money to go and purchase the property. But the thing that I'd often tell you, Paul, is we often joke that if you could borrow money against watermelons, and watermelons were ensurable, and watermelons went up in value and you could earn a rental income in order to be able to pay that mortgage, I'd be recommending that we all go and vest in tropical fruit. It's not that I like cowses, It's that I like that you're able to borrow money against it, you can ensure it, you can earn a rental income to pay most of the costs. Doesn't You're not always able to cover all of the costs with the rental income, especially when it interest rates are high. But those are the factors that I like about property.

I think the main reason is the only thing that makes property special is the fact that you can borrow money against it. Right, So a lot of Kiwis they're out there, they want to grow their wealth, but they might not have a lot of money spare that they can put into shares, Keiwi, saver, term deposits, all of that kind of thing. But what a lot of people realize don't realize, is that you can buy a house without having a lot of cash. I just walk you through my situation. Bought a house when I was twenty six, it went up in value, paid down some debt, and then I thought, okay, well I want to go and buy another house. Well, I didn't have the deposit, I hadn't saved it up, But because my house had gone up in value, I borrow some money against that house as the deposit, and I take that money that I borrowed from the bank, and I go put that down as the deposit on another investment property, and I borrow some money from the bank to purchase that, and I was able to buy my I guess second investment property with no cash. Now we call that the no cash needed method. It is a pretty classic way that a lot of care we start investing in property. Now, if you've invested in property before, you know this, and it sounds really basic. If you've never invested in property before, it can be pretty mind blowing. So I often say to first time investors, you're effectively using your house or houses to go and buy more houses, and then as those increase in value or you pay off some of the debt, that's where you start to earn more of a return. But it's the idea of being able to borrow money against it that's what makes property really special. So if I think about that specific property that I bought with no cash, if it goes up in value by ten or twenty k, which is pretty reasonable on an average year, then that ten twenty k doesn't go to the bank. I get to keep that even though I borrowed all of the money to go and purchase the property. But the thing that I'd often tell you, Paul, is we often joke that if you could borrow money against watermelons, and watermelons were ensurable, and watermelons went up in value and you could earn a rental income in order to be able to pay that mortgage, I'd be recommending that we all go and vest in tropical fruit. It's not that I like cowses, It's that I like that you're able to borrow money against it, you can ensure it, you can earn a rental income to pay most of the costs. Doesn't You're not always able to cover all of the costs with the rental income, especially when it interest rates are high. But those are the factors that I like about property.

And then because you've got four properties, now did I read that?

And then because you've got four properties, now did I read that?

Yeah?

Yeah?

Yeah, Now, so how do you How hard do you think it is though for those that are starting out for that first home buyer, if you like, we're constantly hearing how hard it is to raise that hundred thousand dollars as the deposit. I know for me, and this was many years ago, but I didn't borrow money off my parents, but I convinced them to put their house as a caveat against mine, and I had some deposit obviously, and that's how I actually got into the market. And within three years I was able or two years it was I was able to get them off, but that's they were prepared to do that. But it is still hard to get into that first time, right.

Yeah, Now, so how do you How hard do you think it is though for those that are starting out for that first home buyer, if you like, we're constantly hearing how hard it is to raise that hundred thousand dollars as the deposit. I know for me, and this was many years ago, but I didn't borrow money off my parents, but I convinced them to put their house as a caveat against mine, and I had some deposit obviously, and that's how I actually got into the market. And within three years I was able or two years it was I was able to get them off, but that's they were prepared to do that. But it is still hard to get into that first time, right.

It certainly can be. And what I'd kind of say, because I was on used talk set B the other day talking about this and the government's changed the first time grants or effectively gotten rid of them now, and we were talking to people calling and saying, yeah, I was about to use it from the first time, and it might set me back a year or two. And the thing I was saying to a lot of them is just remember that the average age that somebody purchases their first home in New Zealand is thirty seven years old. And I think we sometimes get into this mindset that if you haven't done it by twenty six, then you're behind. No no, no, no, no no no. Only fifty percent of first home buyers purchase before they are thirty seven. Fifty percent of first home buyers purchase after thirty seven. But one thing that I'd also like to change the narrative around is just about you know, how many people are purchasing their first homes. A lot of people don't realize that in twenty twenty four, first home buyers are making up a bigger chunk of the market than they almost ever have. So in a standard year, somewhere between eighteen to twenty percent of the market of the houses bought are sold to first home buyers. At the moment, we're well above twenty percent. I think we hit twenty five percent recently. So it's a really good time for first time buyers right now. So that tells me that a lot of key is out there. They're not letting high house prices or what they're reading in the media get in the way of their first home dreams.

It certainly can be. And what I'd kind of say, because I was on used talk set B the other day talking about this and the government's changed the first time grants or effectively gotten rid of them now, and we were talking to people calling and saying, yeah, I was about to use it from the first time, and it might set me back a year or two. And the thing I was saying to a lot of them is just remember that the average age that somebody purchases their first home in New Zealand is thirty seven years old. And I think we sometimes get into this mindset that if you haven't done it by twenty six, then you're behind. No no, no, no, no no no. Only fifty percent of first home buyers purchase before they are thirty seven. Fifty percent of first home buyers purchase after thirty seven. But one thing that I'd also like to change the narrative around is just about you know, how many people are purchasing their first homes. A lot of people don't realize that in twenty twenty four, first home buyers are making up a bigger chunk of the market than they almost ever have. So in a standard year, somewhere between eighteen to twenty percent of the market of the houses bought are sold to first home buyers. At the moment, we're well above twenty percent. I think we hit twenty five percent recently. So it's a really good time for first time buyers right now. So that tells me that a lot of key is out there. They're not letting high house prices or what they're reading in the media get in the way of their first home dreams.

But do you think that's because of the market, And you know, what you are seeing is a smaller market right now, not as many people buying, and as a consequence, you could have that proportion slightly distorted.

But do you think that's because of the market, And you know, what you are seeing is a smaller market right now, not as many people buying, and as a consequence, you could have that proportion slightly distorted.

Oh well, that's certainly a part of it. That it's a quite a market. Property prices are down and first time buyers are therefore taking advantage of the market that's there. But you I always think as an economist, you can always find reasons to justify why, oh, that number looks good, but actually no, it's not really good, or that number looks bad, but actually it's not that bad. Like there are always reasons for this. But the counter to that kind of view as well, infrastrates are really high usually that could scare a lot of first home buyers off. House prices are still high compared to what they've been over the last ten years, but first time buyers are still being active and out there purchasing.

Oh well, that's certainly a part of it. That it's a quite a market. Property prices are down and first time buyers are therefore taking advantage of the market that's there. But you I always think as an economist, you can always find reasons to justify why, oh, that number looks good, but actually no, it's not really good, or that number looks bad, but actually it's not that bad. Like there are always reasons for this. But the counter to that kind of view as well, infrastrates are really high usually that could scare a lot of first home buyers off. House prices are still high compared to what they've been over the last ten years, but first time buyers are still being active and out there purchasing.

Yeah, which has been testing right, because it is such an opportunity to build wealth to give stability. Quite frankly as well, I did quite a lot of study in the States on that kind of asset building for the poor and the difference it makes through the generations and that sense of self worth and the ability to take risks. But it comes with risks, right, you know, And there's no ways about it.

Yeah, which has been testing right, because it is such an opportunity to build wealth to give stability. Quite frankly as well, I did quite a lot of study in the States on that kind of asset building for the poor and the difference it makes through the generations and that sense of self worth and the ability to take risks. But it comes with risks, right, you know, And there's no ways about it.

It is understanding the market it is. You know, we had someone the.

It is understanding the market it is. You know, we had someone the.

Other day who had bought a house that didn't have full code of compliance because and it was when the banks kind of couldn't lend enough money, you know, to save themselves and so, and they are now being penalized for it, you know what I mean, Like it's getting really really.

Other day who had bought a house that didn't have full code of compliance because and it was when the banks kind of couldn't lend enough money, you know, to save themselves and so, and they are now being penalized for it, you know what I mean, Like it's getting really really.

Tough for them.

Tough for them.

So how do you think people can get themselves better edicated if they want to get into that property market, particularly for an investment.

So how do you think people can get themselves better edicated if they want to get into that property market, particularly for an investment.

I think the big thing is a lot of people educate themselves through hearsay. So we hear a lot from people who are close to us and maybe own our property or maybe one or two properties, and we take a lot of advice from them because we trust them. Oh, they've bought a property before, so they must know what they're doing. Often they don't know what they're doing actually, So if the question is how do we educate ourselves? There is some fantastic resources out there for people who want to learn about property. And it's not just our podcast, you know. Of course, we've done about seventeen hundred episodes since we've done it almost every day for now on five years, So there's a lot of stuff out there. But the other thing that some people could consider it's not just podcasts, but the Property Investor magazine is pretty good as well. Full disclosure my company owns you see on Property Investor magazine. But there are a lot of resources out there if people want to learn. I think the main thing just to be aware of is not always to think that our parents or our friends know everything about property.

I think the big thing is a lot of people educate themselves through hearsay. So we hear a lot from people who are close to us and maybe own our property or maybe one or two properties, and we take a lot of advice from them because we trust them. Oh, they've bought a property before, so they must know what they're doing. Often they don't know what they're doing actually, So if the question is how do we educate ourselves? There is some fantastic resources out there for people who want to learn about property. And it's not just our podcast, you know. Of course, we've done about seventeen hundred episodes since we've done it almost every day for now on five years, So there's a lot of stuff out there. But the other thing that some people could consider it's not just podcasts, but the Property Investor magazine is pretty good as well. Full disclosure my company owns you see on Property Investor magazine. But there are a lot of resources out there if people want to learn. I think the main thing just to be aware of is not always to think that our parents or our friends know everything about property.

Yeah that's bloody good advice. Well you're here, dresser, you know, yeah, yeah, yeah, you sitting there a while and everyone wants to talk property, you know.

Yeah that's bloody good advice. Well you're here, dresser, you know, yeah, yeah, yeah, you sitting there a while and everyone wants to talk property, you know.

Yeah. And what I've found a lot, Paula, is that there are a lot of things that people repeat and assume are true. And I'll give you a really good example of this. So people always ask what goes up in value the fastest, A house, a townhouse, or an apartment, And usually what people say is, well, the money's in the land, and so a house must go up fastest, then a townhouse, and then an apartment, and it's kind of in that order. One two three. So you actually go out and you look out look at the data, and what you see is that, yeah, apartments go up and value way slower than a house or a townhouse. Then you go and you look at the data and say, well, what about a house versus a townhouse. You'd be like, well, surely a house has way more land, and so should go up and value faster. And it's true they go up a little bit faster, but the difference is so much more marginal than many Kiwis would think. And so I think the lesson in there is not that everyone should go buy a town That's not the lesson at all. The less it is sometimes we hear things repeated, but actually that's not necessarily true. Another example is with the monies in the land, and I recently wrote a column for One roof actually looking at that, and in some cases we're actually found that just because a house has more land, that doesn't make it go up and value the fastest or faster might give you a few more options if you want to develop it, but actually it's kind of the mid sized sections that the average key we can afford and the average key we can buy. That's what goes up in value the fastest. Wow.

Yeah. And what I've found a lot, Paula, is that there are a lot of things that people repeat and assume are true. And I'll give you a really good example of this. So people always ask what goes up in value the fastest, A house, a townhouse, or an apartment, And usually what people say is, well, the money's in the land, and so a house must go up fastest, then a townhouse, and then an apartment, and it's kind of in that order. One two three. So you actually go out and you look out look at the data, and what you see is that, yeah, apartments go up and value way slower than a house or a townhouse. Then you go and you look at the data and say, well, what about a house versus a townhouse. You'd be like, well, surely a house has way more land, and so should go up and value faster. And it's true they go up a little bit faster, but the difference is so much more marginal than many Kiwis would think. And so I think the lesson in there is not that everyone should go buy a town That's not the lesson at all. The less it is sometimes we hear things repeated, but actually that's not necessarily true. Another example is with the monies in the land, and I recently wrote a column for One roof actually looking at that, and in some cases we're actually found that just because a house has more land, that doesn't make it go up and value the fastest or faster might give you a few more options if you want to develop it, but actually it's kind of the mid sized sections that the average key we can afford and the average key we can buy. That's what goes up in value the fastest. Wow.

And I was going to ask, which kind of leads from that, is about maintenance as well? Or do you buy you know, because a townhouse in an apartment predominantly have less maintenance, right, And I don't think people, particularly they're buying an investment that's going to be rented, really give consideration. I've just spent six thousand dollars on new heat pumps literally went in today, you know, into one of my properties that just needed to be done right. But you could spend that kind of money quite regularly, quite easily if you want to keep your house up to a standard. So how much do you kind of do you budget a percentage of your income or the home or how do you manage it?

And I was going to ask, which kind of leads from that, is about maintenance as well? Or do you buy you know, because a townhouse in an apartment predominantly have less maintenance, right, And I don't think people, particularly they're buying an investment that's going to be rented, really give consideration. I've just spent six thousand dollars on new heat pumps literally went in today, you know, into one of my properties that just needed to be done right. But you could spend that kind of money quite regularly, quite easily if you want to keep your house up to a standard. So how much do you kind of do you budget a percentage of your income or the home or how do you manage it?

So the basic way that we usually do is say, let's say you buy a new built property, so brand new, you're probably going to get away with five hundred dollars a year, and in fact, in the first couple of years, you're probably not even going to need to spend that. It's going to be really cheap. Once yet to that kind of ten to twenty years old, maybe thirty years old, you start to say about one thousand bucks a year is what you're going to need a budget for maintenance. Once you get up over that thirty plus years old, that's when we say kind of three grand a year is what you need to budget ballpark, but it's quite lumpy, So what I mean by that is it might cost you a grand one year, then oh no, that hot water cylinder that's gone that's going to cost another eight grand to replace. And then oh no, wait, now we've got a roof that needs to be replaced because we've brought something that's fifty or sixty years old that's going to be twenty to thirty grand or whatever it happens to be. So I kind of do it on an annual basis, and it's kind of the older the property, the more maintenance. But just be aware that it's going to be a bit lumpy. And that's a really good point that you bring up with maintenance, because I wouldn't do it as a percentage of the property. And the reason is that sometimes, especially in small towns like out on the west coast of the South Island, you've got a lot of cheap houses out there, and actually they get a really good rental yield, so they get a lot of rent per week compared to the value of the property, and a lot of investors look at that and say, oh, isn't that wonderful it's got such a high rental yield. But the issue is that to replace a roof or a hot water cylinder kind of doesn't matter what the value of the property is. It's basically pretty much the same all around the country. And so one of the issues is if you just buy a cheap house that in a small part of the country, when you do need to replace the hot water cylinder or a heat pump or the roof, that makes up a huge personage of the rent that you actually collect, and so sometimes it can be a bit of a false economy.

So the basic way that we usually do is say, let's say you buy a new built property, so brand new, you're probably going to get away with five hundred dollars a year, and in fact, in the first couple of years, you're probably not even going to need to spend that. It's going to be really cheap. Once yet to that kind of ten to twenty years old, maybe thirty years old, you start to say about one thousand bucks a year is what you're going to need a budget for maintenance. Once you get up over that thirty plus years old, that's when we say kind of three grand a year is what you need to budget ballpark, but it's quite lumpy, So what I mean by that is it might cost you a grand one year, then oh no, that hot water cylinder that's gone that's going to cost another eight grand to replace. And then oh no, wait, now we've got a roof that needs to be replaced because we've brought something that's fifty or sixty years old that's going to be twenty to thirty grand or whatever it happens to be. So I kind of do it on an annual basis, and it's kind of the older the property, the more maintenance. But just be aware that it's going to be a bit lumpy. And that's a really good point that you bring up with maintenance, because I wouldn't do it as a percentage of the property. And the reason is that sometimes, especially in small towns like out on the west coast of the South Island, you've got a lot of cheap houses out there, and actually they get a really good rental yield, so they get a lot of rent per week compared to the value of the property, and a lot of investors look at that and say, oh, isn't that wonderful it's got such a high rental yield. But the issue is that to replace a roof or a hot water cylinder kind of doesn't matter what the value of the property is. It's basically pretty much the same all around the country. And so one of the issues is if you just buy a cheap house that in a small part of the country, when you do need to replace the hot water cylinder or a heat pump or the roof, that makes up a huge personage of the rent that you actually collect, and so sometimes it can be a bit of a false economy.

Yeah, can you OK, I've got a few kind of questions, one which you just led into quite nicely as well, which was would you buy an investment property out of the town or the city that you live in?

Yeah, can you OK, I've got a few kind of questions, one which you just led into quite nicely as well, which was would you buy an investment property out of the town or the city that you live in?

This says me, confessing that I have.

This says me, confessing that I have.

You know, so I've just recently, well recently in the last twelve months, purchased something and I looked carefully at the yield, which I was thinking you should probably explain to some people, and really saw the benefits in kind of getting out of the Auckland market, to be honest, and spreading my investment more around the country.

You know, so I've just recently, well recently in the last twelve months, purchased something and I looked carefully at the yield, which I was thinking you should probably explain to some people, and really saw the benefits in kind of getting out of the Auckland market, to be honest, and spreading my investment more around the country.

Yeah. Big fan of that, Paula. And I'll see the reason why. So a lot of people look at like New Zealand property prices and if you google it, you zeal In property prices graph, it will look like almost always property prices are going up, but that's not true. That's the New Zealand average. But in Auckland you're going to see periods we properly priced are quite flat for a time and then they boom. So for example, between about two thousand and nine ish and two thy fifteen, property prices in Wellington were flat for ages, even though the average price to property in New Zealand was going up. And so the reason that I suggest diversifying around the country is that if you've got a property in Auckland and you've got a property in Wellington or a property somewhere else, maybe the Auckland property market's flat, but that one in Wellington's going up in value. Then the Wellington market's flat, but the Auckland one's going up in value. And so the purpose of diversifying or buying property around the country is that you can more closely approximate the New Zealand property market, and then you're going to see your wealth grow a lot more consistently. If you only buy in one specific town, you're going to have a lot more flat periods where your wealth's not going up, and then you're going to have these crazy boom periods.

Yeah. Big fan of that, Paula. And I'll see the reason why. So a lot of people look at like New Zealand property prices and if you google it, you zeal In property prices graph, it will look like almost always property prices are going up, but that's not true. That's the New Zealand average. But in Auckland you're going to see periods we properly priced are quite flat for a time and then they boom. So for example, between about two thousand and nine ish and two thy fifteen, property prices in Wellington were flat for ages, even though the average price to property in New Zealand was going up. And so the reason that I suggest diversifying around the country is that if you've got a property in Auckland and you've got a property in Wellington or a property somewhere else, maybe the Auckland property market's flat, but that one in Wellington's going up in value. Then the Wellington market's flat, but the Auckland one's going up in value. And so the purpose of diversifying or buying property around the country is that you can more closely approximate the New Zealand property market, and then you're going to see your wealth grow a lot more consistently. If you only buy in one specific town, you're going to have a lot more flat periods where your wealth's not going up, and then you're going to have these crazy boom periods.

Yeah, that makes sense because of the changes that we're looking at with the current government, with the landlords and things. You know, there was an advantage in looking at new builds. Do you still see that and do you have an opinion, particularly for an investment property of new build versus established residential.

Yeah, that makes sense because of the changes that we're looking at with the current government, with the landlords and things. You know, there was an advantage in looking at new builds. Do you still see that and do you have an opinion, particularly for an investment property of new build versus established residential.

Well, I should just say that our company only focuses on new builds, right, So just before I tell you what I think. Ye, why, I just want to put that by it. Yeah, I just want to let everyone know, like, oh, I've got a reason to be biased. Yeah. The truth is that not everybody should buy a new build. There's absolutely true. So the benefits previously were really around tax and interesstructibility. Now there are still benefits to going for a new build, which is that you need a twenty percent deposit rather than a thirty percent deposit. And if you think about your house going up in value, the return is a lot higher if you put in a smaller deposit because you put in less money, but your house still goes up in value, so you can get a better return. On top of that, the Reserve Bank put out some modeling and they said, if somebody currently owns one investment property today how many could they buy over the next ten years once the DTIs come in. And what they said is if you buy just existing properties, so secondhand properties, they're ones that we're all used to purchasing. If you currently own one investment property today, over the next ten years, we think you can buy three more. But if you decide to go and buy new build properties, we think you can buy another five more over the next ten years. Now that's just one example in one scenario with one property investor, but that kind of shows you that if you invest in new builds, you're going to be able to grow your portfolio much faster. Now, those are the pros, but let me tell you all the comms. The main con of a new building you can't renovate it. So if you go out and you buy probably what I call a secondhand home, one that somebody's lived in before, you've got the opportunity to renovate it and add value. So let's say that it's currently worth six hundred K, and you decide to spend fifty thousand dollars renovating that, So you're earned for six fifty Maybe by the end end of it it's worth seven hundred or seven hundred and fifty k. Now, all of a sudden, you've made what we call instant equity of fifty to one hundred thousand dollars, And so some investors look at the hands say absolutely, that's what I'm into. I want to be involved renovating properties because I know I can actively grow my wealth really quickly. And if you're that way inclined buying what we call existing or second hand homes, that could absolutely be the right strategy for you. If you're sitting there and you're saying, do you know what, not really into renovating. I don't want to get my hands dirty. I don't want to be too involved. I want something a little more hands off. That's generally when you go for the.

Well, I should just say that our company only focuses on new builds, right, So just before I tell you what I think. Ye, why, I just want to put that by it. Yeah, I just want to let everyone know, like, oh, I've got a reason to be biased. Yeah. The truth is that not everybody should buy a new build. There's absolutely true. So the benefits previously were really around tax and interesstructibility. Now there are still benefits to going for a new build, which is that you need a twenty percent deposit rather than a thirty percent deposit. And if you think about your house going up in value, the return is a lot higher if you put in a smaller deposit because you put in less money, but your house still goes up in value, so you can get a better return. On top of that, the Reserve Bank put out some modeling and they said, if somebody currently owns one investment property today how many could they buy over the next ten years once the DTIs come in. And what they said is if you buy just existing properties, so secondhand properties, they're ones that we're all used to purchasing. If you currently own one investment property today, over the next ten years, we think you can buy three more. But if you decide to go and buy new build properties, we think you can buy another five more over the next ten years. Now that's just one example in one scenario with one property investor, but that kind of shows you that if you invest in new builds, you're going to be able to grow your portfolio much faster. Now, those are the pros, but let me tell you all the comms. The main con of a new building you can't renovate it. So if you go out and you buy probably what I call a secondhand home, one that somebody's lived in before, you've got the opportunity to renovate it and add value. So let's say that it's currently worth six hundred K, and you decide to spend fifty thousand dollars renovating that, So you're earned for six fifty Maybe by the end end of it it's worth seven hundred or seven hundred and fifty k. Now, all of a sudden, you've made what we call instant equity of fifty to one hundred thousand dollars, And so some investors look at the hands say absolutely, that's what I'm into. I want to be involved renovating properties because I know I can actively grow my wealth really quickly. And if you're that way inclined buying what we call existing or second hand homes, that could absolutely be the right strategy for you. If you're sitting there and you're saying, do you know what, not really into renovating. I don't want to get my hands dirty. I don't want to be too involved. I want something a little more hands off. That's generally when you go for the.

New built asn't.

New built asn't.

Part of the problem with new building, and I suppose my question is, as well as you know are the companies that do this, is that you have to pay more up front or borrow and pay, and you don't get the rent until it's built. So you know, I'm paying a mortgage off my new build at the moment and it won't be finished until the end of the year. I can do that, right, So I'm in a privileged position that I can do that, but I was thinking why that would be and that might be harder. But then I've heard ads from companies that say, you don't pay you know, we don't want any money until it's until it's ready for you to turn the key.

Part of the problem with new building, and I suppose my question is, as well as you know are the companies that do this, is that you have to pay more up front or borrow and pay, and you don't get the rent until it's built. So you know, I'm paying a mortgage off my new build at the moment and it won't be finished until the end of the year. I can do that, right, So I'm in a privileged position that I can do that, but I was thinking why that would be and that might be harder. But then I've heard ads from companies that say, you don't pay you know, we don't want any money until it's until it's ready for you to turn the key.

Yeah, that's actually a really good point, Pauler. So there are two different types of new builds, right. So the one that you first talked about, and maybe I don't know your personal situation, but this might be what you've purchased is what we call a progressive payments built. So that's when you've probably purchased the land, you're paying a mortgage on the land, and now you've hired a building company to build that property for you, and so that would have been in your contract. So you've probably borrowed a couple of hundred k to buy the land, you're paying the mortgage on that, and then you're making those progressive payments as that property is being built. Now, that's one type of property and the benefit to that is that once it's built, you'll probably get some of that instant equity. By the time bill it is probably going to be worth more than the total amount that you've paid because you're taking a bit on a bit of risk there. You're making some payments, so that's the benefit the connors of course that you're currently paying a mortgage, but you're not getting any rental income. That's one type of new build. The second type of new build, and this is the one that we focus more on at Opus Partners, what's called a turnkey property. So that's where you just put down a ten percent deposit and then once the property is built, you pay the rest of the money. So effectively, you don't have a big fat mortgage until you've got rental income coming in. So often we talk about new builds as just one group, but actually there are those two different types.

Yeah, that's actually a really good point, Pauler. So there are two different types of new builds, right. So the one that you first talked about, and maybe I don't know your personal situation, but this might be what you've purchased is what we call a progressive payments built. So that's when you've probably purchased the land, you're paying a mortgage on the land, and now you've hired a building company to build that property for you, and so that would have been in your contract. So you've probably borrowed a couple of hundred k to buy the land, you're paying the mortgage on that, and then you're making those progressive payments as that property is being built. Now, that's one type of property and the benefit to that is that once it's built, you'll probably get some of that instant equity. By the time bill it is probably going to be worth more than the total amount that you've paid because you're taking a bit on a bit of risk there. You're making some payments, so that's the benefit the connors of course that you're currently paying a mortgage, but you're not getting any rental income. That's one type of new build. The second type of new build, and this is the one that we focus more on at Opus Partners, what's called a turnkey property. So that's where you just put down a ten percent deposit and then once the property is built, you pay the rest of the money. So effectively, you don't have a big fat mortgage until you've got rental income coming in. So often we talk about new builds as just one group, but actually there are those two different types.

Should you be concerned at the moment with the way the market is on the company that you go in with, you know, I mean we've seen developers going under, you know, we read the stories. Not all of them are small, you know, so you know there is some genuine kind of risk there.

Should you be concerned at the moment with the way the market is on the company that you go in with, you know, I mean we've seen developers going under, you know, we read the stories. Not all of them are small, you know, so you know there is some genuine kind of risk there.

We've seen well, particularly in Gosh.

We've seen well, particularly in Gosh.

I live in Testa and Norkland and you're just seeing so so many of the infil housing going up, which hey, people have got opinions on it that I'm pro development, So it'll be I have to be supportive, but you know, yeah, how do you do your due diligence when you know, when thinking about whom does that build for you?

I live in Testa and Norkland and you're just seeing so so many of the infil housing going up, which hey, people have got opinions on it that I'm pro development, So it'll be I have to be supportive, but you know, yeah, how do you do your due diligence when you know, when thinking about whom does that build for you?

Yeah, that's such an important question, and especially if you're going down that first avenue of progressive payments, because the risk is, let's say you've bought that piece of land right and you're currently paying a mortgage on it. Let's say the house gets half built and then the developer goes under. Now you're in a real pickle. And it's not just that. Maybe you've got a master build guarantee and so yep, they're going to organize somebody else to come and finish off that property for you. But in the meantime, you've already borrowed four or five hundred thousand dollars, and while they're messing around trying to find you to find you a builder to finish the property, you're still paying the mortgage on that. So that's where it really starts to become an issue. If you're in that contract, If you're in a turn key style where you're only put in a small deposit then pay the rest at the end, that's less of an issue because even if the builder falls over, you get your deposit back because it's held but held by the lawyers. So in terms of how do you do your due diligence, the first question I'd be asking is who am I signing the contract with? Because what we've seen a couple of times is people might buy off one of those franchise builders, people like a Golden Homes or a Signature Homes, And I'm not specifically talking about any one company, but those types of companies, and you think, well, that's great, I am investing with somebody who is really reputable. But then it turns out that you didn't sign the contract with the master franchise of whatever that building company is. You signed it with the local franchise and tot on it or the local franchise in Hamilton or wherever you happen to be in the country. Now, that's one single small building company, and if they fall over, that's where you can really come unstuck. So people can sort of sometimes lull themselves into a false sense of security because you think you're using a big company, but you're not using a big company. You were using a small franchise, local franchise of that big builder. So first thing I do is see who am I actually signing the contract with. The second thing I'd then ask is what are the guarantees around that? So are they a master builder's If it's master build and you're doing that progressive payment build, that you're doing poorer, that's when you I feel like, I'll give a free consultation here. Wh's quite lovely, it's quite nice. And then if you've got a master build and that that developer falls over, kind of okay, because then sweet this person, they're going to organize another builder to come in and finish the job, so that gives you a little bit more security. Master Bold isn't the only type of it's not an insurance scheme but a protection scheme. There is another one run by a th that's called Halo or New Zealand Certified Builders. But I'd want some type of scheme like that. Some building companies from those big franchise home builders that you hear about kind of like what I named before, they might have their own schemes. I'd want my lawyer to dig into the details to protect me.

Yeah, that's such an important question, and especially if you're going down that first avenue of progressive payments, because the risk is, let's say you've bought that piece of land right and you're currently paying a mortgage on it. Let's say the house gets half built and then the developer goes under. Now you're in a real pickle. And it's not just that. Maybe you've got a master build guarantee and so yep, they're going to organize somebody else to come and finish off that property for you. But in the meantime, you've already borrowed four or five hundred thousand dollars, and while they're messing around trying to find you to find you a builder to finish the property, you're still paying the mortgage on that. So that's where it really starts to become an issue. If you're in that contract, If you're in a turn key style where you're only put in a small deposit then pay the rest at the end, that's less of an issue because even if the builder falls over, you get your deposit back because it's held but held by the lawyers. So in terms of how do you do your due diligence, the first question I'd be asking is who am I signing the contract with? Because what we've seen a couple of times is people might buy off one of those franchise builders, people like a Golden Homes or a Signature Homes, And I'm not specifically talking about any one company, but those types of companies, and you think, well, that's great, I am investing with somebody who is really reputable. But then it turns out that you didn't sign the contract with the master franchise of whatever that building company is. You signed it with the local franchise and tot on it or the local franchise in Hamilton or wherever you happen to be in the country. Now, that's one single small building company, and if they fall over, that's where you can really come unstuck. So people can sort of sometimes lull themselves into a false sense of security because you think you're using a big company, but you're not using a big company. You were using a small franchise, local franchise of that big builder. So first thing I do is see who am I actually signing the contract with. The second thing I'd then ask is what are the guarantees around that? So are they a master builder's If it's master build and you're doing that progressive payment build, that you're doing poorer, that's when you I feel like, I'll give a free consultation here. Wh's quite lovely, it's quite nice. And then if you've got a master build and that that developer falls over, kind of okay, because then sweet this person, they're going to organize another builder to come in and finish the job, so that gives you a little bit more security. Master Bold isn't the only type of it's not an insurance scheme but a protection scheme. There is another one run by a th that's called Halo or New Zealand Certified Builders. But I'd want some type of scheme like that. Some building companies from those big franchise home builders that you hear about kind of like what I named before, they might have their own schemes. I'd want my lawyer to dig into the details to protect me.

Okay, I really that was I think really helpful, and I think just thinking about getting into the market. You know, I'm one of those people that always goes you know, there's your cup half follow half empty. Who cares take a sip? Because at the end of the day, if you're not kind of getting in, then you know it's never going to be easy because it's just not but what you can do and how you can do it. And as you say, you know, I've gone in with a friend before and that worked for both of us. We had it absolutely iron tight, and we just both we would never have come out with forty thousand dollars each. That would then set us off in a different direction. So there's all sorts of kind of options. I suppose I would just say to anyone that's doing this, I'm definitely not a financial advisor, and so please get the right advice and talk to the right people so that you know, you know kind of what you're doing or what you're eating up to. Hey, so, ed, this is called ask me anything, and I've done all the asking, So I now like to give you a bit of an opportunity to ask me something if you would like to.

Okay, I really that was I think really helpful, and I think just thinking about getting into the market. You know, I'm one of those people that always goes you know, there's your cup half follow half empty. Who cares take a sip? Because at the end of the day, if you're not kind of getting in, then you know it's never going to be easy because it's just not but what you can do and how you can do it. And as you say, you know, I've gone in with a friend before and that worked for both of us. We had it absolutely iron tight, and we just both we would never have come out with forty thousand dollars each. That would then set us off in a different direction. So there's all sorts of kind of options. I suppose I would just say to anyone that's doing this, I'm definitely not a financial advisor, and so please get the right advice and talk to the right people so that you know, you know kind of what you're doing or what you're eating up to. Hey, so, ed, this is called ask me anything, and I've done all the asking, So I now like to give you a bit of an opportunity to ask me something if you would like to.

Yeah, I do, Paula. So one thing that I'm really interested and this is a good exercise for anybody at home is you've started investing in property. So if I was to ask you to think forward fifteen years in the future, twenty years in the future, and you think about your perfect day in retirement once you've stopped doing they ask me anything podcast, what are you doing on that perfect day in retirement and who are you with?

Yeah, I do, Paula. So one thing that I'm really interested and this is a good exercise for anybody at home is you've started investing in property. So if I was to ask you to think forward fifteen years in the future, twenty years in the future, and you think about your perfect day in retirement once you've stopped doing they ask me anything podcast, what are you doing on that perfect day in retirement and who are you with?

Well, I'm we'll go less than twenty years, because I'd be happy to be dead in twenty twenty five years, because I just think old age is a bit of a bitch. But so yeah, for me, I want choices. So hence why I am quite heavily invested right now and working quite hard. I'm fifty five years old. So for me, it is being able to travel if I want to. It is being able to spend time with my grandchildren, and I would like to be able to take them on a trip and have really unique special experiences with them that they will always remember and will be part of that. So, you know, I don't need the flashest car. I actually don't need the flashest house.