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Repairs and Mortgage Interest Rates

Posted 12/10/2018

A short little blog about some top tips for repairs to your rental property and where mortgage interest rates are at right now.









Repairs tips for your rental property

Thinking about doing some repairs to your rental property? Here are some tips to make the most of the work you do.

  • Keep the amount spent to under $500. If the amount you spend on one day is less than $500, then the full amount can be claimed as an expense in your tax return. However, don’t think you can split up a $3,000 heat pump into small bits and get away with it – the total of the item is the total paid altogether.

  • Get onto small things early. If you do some repairs quickly by having a regular inspection, then often it will be less costly than waiting for it to get worse.

  • Fix things that annoy your tenant. If there is something that annoys your tenant, this could lead to you losing a good tenant over what could be a small issue. Having a good tenant is very valuable in terms of the rent you receive from them!

  • Make improvements that the tenant appreciates. If there are small improvements that you can make that don’t cost much, but the tenant appreciates a lot, then this will keep a good tenant and also allow for rents to increase in the future. This is creating ‘Value’ – the tenant sees they are getting more for their money. Examples could be installing a heat transfer system, thermal backed curtains, solar powered sensor lights, or a waste disposal in the kitchen. Think – what is important to the tenant and what would they appreciate?

  • And finally, keep the receipts! Often when paying for these items you use a credit card or cash. Keep the receipts so that you can claim all the expenses in your tax return.

We talk about Repairs and Maintenance and Improvements in more detail and what to include in your tax return in the Rental Coach course.










Mortgage Interest Rates

The major banks in New Zealand have been tweaking their interest rates over the last month, and generally, the rates have been going downwards. ASB Bank for example, now has a fixed interest rate for 18 months of 4.15%.

A fixed interest rate can be a good thing if you need certainty over how much the loan repayments will be and you are not intending to sell the property. If you do sell the property or make extra repayments, then there can be a break fee that could be paid. Some people have a mix of both – some fixed and some floating (so they can repay some early). Make sure you calculate what you can afford. Here is a useful calculator tool for seeing what your repayments will be.

Fixing an interest rate can give you a good saving: The current floating interest rate at ASB Bank is 5.80%, which is higher than any of the fixed rates currently offered. Do have a chat to your bank or mortgage broker to see if you have the best deal available.

As always with this – work this in with your long-term investment plans. So, see your investment advisor as well to ensure you are heading in the right direction!