Location of leasehold and freehold apartments in Auckland city (CBD).
TRANSCRIPTION:
Good Day, my name is Andrew Murray from the Apartment Specialists. Today I’m talking to you about leasehold apartments.
Now there are over 20,000 apartments in the Auckland Central area and over 3,000 of them are leasehold. So you need to know where they are. As you can see in front of you, there’s a map of Auckland. I’m just going to show you exactly where the leasehold land is and where those leasehold land apartments in Auckland city are. One of the reasons why I need to do this webcast, is because nearly every single apartment I sell, I always get asked, is it freehold or is it leasehold? So I thought about educating everybody and showing you exactly where the leasehold apartments are, so you know where to look if you want leasehold or freehold.
First of all, we’ve got a map of Auckland as you can see here. Now you’ve got Queen Street right down here – that’s obviously New Zealand’s main street. You’ve got Freeman’s Bay, Parnell, Spaghetti Junction, where all of the motorways are. You’ve got the motorway here, which goes to the Harbour Bridge. Then you’ve your bearings, obviously this is the Auckland CBD. I’ve split it up into five main areas where there’s basically all the leasehold apartments. The first one is where your Maori leasehold land is. That’s through Ngati Whatua, which is this land here, which goes down Beach Road, and then along The Strand, and then back down Quay Street.
Now I started with the Maori leasehold land because this is the largest and has over 1,500 apartments just in this area that are leasehold. And there are over 10 different buildings or complexes that are housing those apartments. Going from your Landings, your Scene apartments, your Mirage, etc.
The next biggest is Viaduct Basin. Your Viaduct Basin was actually Ports of Auckland land and got sold in the 90’s to Mr. Farmer who represents Viaduct Holdings. So if we move up here, this is where the Viaduct Basin is. Where your leasehold apartments are. As you can see here, you’re going passed Lighter Quay apartments now, round here, round the Basin, passed Viaduct Point, up through here. Then obviously here, you’ve got Princes Wharf. So that’s where about 1,100 leasehold apartments are.
And then, number three is you’ve got Beaumont Quarter. This is where 248 apartments are. Where there’s about 12 different types of apartments and they started out being completely leasehold and then there was an option to buy. So some of these are actually freehold but a majority of them are still leasehold. And that goes up here.
The next largest is actually a small little pocket called UniLodge where there’s two buildings which is University Student Accommodation and that is right here. That’s got 319 apartments.
One that not many people know about is the old Methodist Church land. Although it has sold the lease on to Dave Henderson, and that’s up on Queen Street and it’s just off Liverpool Street and City Road, so that is right here I’ve actually drawn over. And this little pocket here. There’s about 260 apartments there that are leasehold.
So basically you’ve got your one, two, three, four, five areas of leasehold land and on that there are commercial buildings and apartments. And that’s where you find all the leasehold apartments in the Auckland CBD. So you know if you’re looking for leasehold apartments that’s where you’re going to find them. So hopefully that will help you know where. If it’s in this area, obviously it’s leasehold. If it’s in this area it’s obviously freehold, type of thing.
You know what I’d do next though. I thought I’d go over each of these areas individually and point out different buildings. Your Maori leasehold land, your Viaduct Holdings, your Beaumont Quarter etc, in an individual podcast reach, because I think it deserves it. I hope this has helped and if you have any questions around the value of your apartment that sits in this area or the value of apartments that you’re looking at, just flick me and email andrew@apartmentspecialists.co.nz or give me a ring anytime.
Location of leasehold and freehold apartments in different parts of Auckland CBD.
TRANSCRIPTION:
Good Day, my name is Andrew Murray from the Apartment Specialists. Today I’m talking to you about leasehold apartments.
Now there are over 20,000 apartments in the Auckland Central area and over 3,000 of them are leasehold. So you need to know where they are. As you can see in front of you, there’s a map of Auckland. I’m just going to show you exactly where the leasehold land is and where those leasehold land apartments are. One of the reasons why I need to do this webcast, is because nearly every single apartment I sell, I always get asked, is it freehold or is it leasehold? So I thought about educating everybody and showing you exactly where the leasehold apartments are, so you know where to look if you want leasehold or freehold.
First of all, we’ve got a map of Auckland as you can see here. Now you’ve got Queen Street right down here – that’s obviously New Zealand’s main street. You’ve got Freeman’s Bay, Parnell, Spaghetti Junction, where all of the motorways are. You’ve got the motorway here, which goes to the Harbour Bridge. Then you’ve your bearings, obviously this is the Auckland CBD. I’ve split it up into five main areas where there’s basically all the leasehold apartments. The first one is where your Maori leasehold land is. That’s through Ngati Whatua, which is this land here, which goes down Beach Road, and then along The Strand, and then back down Quay Street.
Apartment Building
Now I started with the Maori leasehold land because this is the largest and has over 1,500 apartments just in this area that are leasehold. And there are over 10 different buildings or complexes that are housing those apartments. Going from your Landings, your Scene apartments, your Mirage, etc.
The next biggest is Viaduct Basin. Your Viaduct Basin was actually Ports of Auckland land and got sold in the 90’s to Mr. Farmer who represents Viaduct Holdings. So if we move up here, this is where the Viaduct Basin is. Where your leasehold apartments are. As you can see here, you’re going passed Lighter Quay apartments now, round here, round the Basin, passed Viaduct Point, up through here. Then obviously here, you’ve got Princes Wharf. So that’s where about 1,100 leasehold apartments are.
And then, number three is you’ve got Beaumont Quarter. This is where 248 apartments are. Where there’s about 12 different types of apartments and they started out being completely leasehold and then there was an option to buy. So some of these are actually freehold but a majority of them are still leasehold. And that goes up here.
The next largest is actually a small little pocket called UniLodge where there’s two buildings which is University Student Accommodation and that is right here. That’s got 319 apartments.
One that not many people know about is the old Methodist Church land. Although it has sold the lease on to Dave Henderson, and that’s up on Queen Street and it’s just off Liverpool Street and City Road, so that is right here I’ve actually drawn over. And this little pocket here. There’s about 260 apartments there that are leasehold.
So basically you’ve got your one, two, three, four, five areas of leasehold land and on that there are commercial buildings and apartments. And that’s where you find all the leasehold apartments in the Auckland CBD. So you know if you’re looking for leasehold apartments that’s where you’re going to find them. So hopefully that will help you know where. If it’s in this area, obviously it’s leasehold. If it’s in this area it’s obviously freehold, type of thing.
You know what I’d do next though. I thought I’d go over each of these areas individually and point out different buildings. Your Maori leasehold land, your Viaduct Holdings, your Beaumont Quarter etc, in an individual podcast reach, because I think it deserves it. I hope this has helped and if you have any questions around the value of your apartment that sits in this area or the value of apartments that you’re looking at, just flick me and email andrew@apartmentspecialists.co.nz or give me a ring anytime.
There is a difference between selling apartments and houses. Selling apartments is a very specialised market and often the buyers are a different group of people to those who are looking for a house.
At Apartment Specialists it’s all we do, we only do apartments and we are focused on putting you in control. There are other agencies who predominantly do apartments too; make sure you do your research and go with what suits you and your circumstances better.
TRANSCRIPTION:
Andrew Murray from Apartment Specialists. Who specialises in selling apartments?
Now just like if – which happens quite often, I have people come up and ask me:
“Can I sell a house?” I will say, “No.” They will go, “Why not? You did a great job with me, with my apartment.” I go, “Well I can sell your house. But I know I am not the best man for the job and the reason is, I do not specialise in houses”.
My market is apartments, which is a very specialised market. It is very unique. You’ve got a unit titles act. You’ve got a lot of different types of buyers. There is a lot of different ways you can add value which is very different to the housing market. I’m not confident in doing houses because I know there is somebody out there who can probably do it better.
Now that is not in case with apartments, then obviously that is what I do. Now I hope if somebody had an apartment and they went to a housing agent. And you know the majority of the business is houses – they said to them – “Would you like to sell my apartment?” That they would say – “No, I’m not the best agent for the job.” In an ideal world, that is what should happen. But unfortunately that does not happen. Most agents sell whatever they can, as that is the nature of the business.
Now to help you look for or find the best agent or agency for you, besides obviously listening to myself, from Apartment Specialists. There is also a few other agencies that do apartments or the majority of what they sell is apartments. Now you have got – the only two agencies which only do apartments – The Apartment Specialists and City Sales and you have also got Ray White. Their office down on Lorne Street, and Britomart. And then you have got Barfoots. Now they do a lot of the mortgagee sales. And you have got Baileys down on the waterfront. They do a lot of leasehold stuff. I’ve got a few agents who do some character stuff. And you’ve got Property Asia. The name says it all. And that is pretty much it. You’ve got other ones which dabble here and there but those are the main offices that have agents which – the majority of what they sell are apartments. That is where you will find the true apartment specialists. And there are those particular branches which are in the CBD.
So have a look around. Find out which agent or agency is best for you. Always make sure when you are going with an apartment or house you are going with somebody who specializes in: a. In your apartment and b. In your area. I hope that helps.
Next week, I am going to be talking about how to choose the right Auckland real estate agent for you.
Learn the 10 costly mistakes most Auckland apartment owners make. We’ll also tackle the ways on how you can avoid these blunders. Why under renting your apartment can cost you a lot of money? All these from this podcast!
TRANSCRIPTION
Good day, it’s Andrew Murray from the Apartment Specialists back again. And today I’m going to be talking about, or going through the 10 mistakes Auckland apartment owners make that are costing them – that I see them making that are costing them thousands of dollars when they come to sell their apartment. So it’s a bit of a biggy. Now this is from a report I put out that I’ve had a lot of positive feedback from and I’ve had people ask me to go into more depth into each one, so what I thought I’d do is each podcast I’d go into one of these points.
So the first one I’m going to be going through is about under-renting. Now it actually has a bit of an exponential effect, it’s a lot more than you think and I think you’re going to be quite surprised with this one. Okay so I made a very bold statement in that report and I stand by that, that every $20 your apartment is under-rented, when it comes to sell, that’s reducing the perception of value by $10,000 or more. So that $20 a week is costing you 10 grand and that’s a lot of money. And I’ll go through an example and show you that.
Now a lot of owners have asked me “Well, how am I supposed to know what rent should I should be getting?” Well, the thing is, it’s not your fault; it’s who you’re employing to do it. And that’s a tough one because if you look at the market being 67% investor, so being rented out and the owners not actually, like you, you’re not actually living in your apartment, how are you supposed to know? You’re going to be in another suburb of Auckland, another part New Zealand or in a different country.
And if you’ve got one or two in a building, how are you supposed to know what the market rent is? And each building is different and then each apartment is different, and then the condition of your apartment and so on. So, it’s very, very difficult and it comes down to the property manager, where, I mean, that differ, it’s just like real estate agents, they differ so hugely in regards to the service and what they do deliver. So yeah, it is a tough one yeah, but I can help you out with regards to that. Just drop me an email to andrew@apartmentspecialists.co.nz.
One easy one would actually be able to go to www.apartmentspecialists.co.nz to the website and a) you can download the report that I’m going to talk to, if you haven’t already downloaded it, the 10 mistakes that’s costing you guys a lot of money, and also a report on how to know if you’re being looked after in the rental market and how do you know if you’re receiving the right rent for your apartment? And from there, you can figure that out.
Anyway, so I want to go through an example today using my own figures. Now it is involving maths, so don’t be shocked. So what’s I’ve done is, I’ve put them on, I’ve totted the numbers on a piece of paper, okay, sort of like, you know when you come through – not through customs, but you come through an airport and you come and see everybody and you see these guy’s holding up names? It’s going to be a little bit like that. So anyway, I’m only general figures.
Now, if you’re sitting there thinking “Well my apartment’s got a vista” or “My apartment, buyers or purchasers, I’m going to sell them to owner-occupier and get a higher price”. Well spot on, well done and you’re right. But the thing is, when you look at it, what do you think is pushing those values up for the owner-occupier? It’s very different to the housing market because this market you’ve got a majority of people looking to buy apartments who are investors and investors will push those values up and owner-occupiers will have to come up and beat them.
So it’s pushing the investors up, the owner-occupiers are going to have to come up, you see? So it’s actually working in your favour and very important. And if it’s an owner-occupier-type of apartment but you’re renting it out, well, of course you’ll want the most income possible.
Okay, so let’s say, let me just use a typical investor apartment, pretty small, valuing around about, say the market value is $300,000, okay? So two bedrooms, around about 50m2 and it’s got no car park, and the investor, so an investor who’s the typical kind of buyer, is looking for – I’m using my own numbers again, every investor’s different – so in this case it’s a 7% return, okay? So his goal is a 7% return.
Now this is a net return, what net means, it means after expenses, okay so after your body corporate and after your rates. Now people say “What’s a 7% return?” Now, that is if you take a 7% return means if an investor spends $100,000 of their money, each year, after expenses, that’s net, after expenses they want to receive 7% of their $100,000 back, so seven grand back in income. If it was 8% net return they would want $8,000 back. So you get my drift, okay?
Now, they use an equation and there are various equations that are used but they all come out with the same answer. Okay, so if you’ve got, so here we’ve got your income, which is your rent x 52 weeks. Now 52 weeks, some use 50, some use 48 and then minus your expenses, which is your body corporate and your rates, as I mentioned before, and then you divide it by the return you’re looking for in the decimal value, which is in this case 0.7 which is 7%, okay? Now, so your apartment – so for this apartment the market rent is $500 per week, so that’s what it should be receiving, okay? And if it’s not, it’s not being rented properly, okay, or there’s another reason for it.
Now, the body corporate fees $4,000, just a round figure, and your council rates are $1,500, so that’s your expenses, your outgoings. So we put that into the equation. So you have rent x 52, so 500 x 52 minus expenses, which is your 4000 for your body corporate, $1,500 for your rates, and divide it by that 0.7 which is your 7% return the purchaser is looking for. And so what that does it gives you a figure and that will come out at the value of what your apartment’s worth. So this investor is saying to you “Okay, at that rent, at market rent, to me that’s worth $292,857” and they may go to around $300,000 to purchase that apartment.
Now this is where it’s my job to make that perception as good as possible, that the rents are going to go, you know, looking at the rent trends to try and get that rent up as I can, work with the property manager, work with the tenants and that kind of thing. And that’s something I do with every apartment. Some will actually say, unless it was an emergency to sell, I’d go “Can you wait? Because I want to be able to make sure that you’re getting the best rate you can for your apartment and we can probably work with tenants and the property manager to see if we can achieve that”. Now I don’t do rentals myself, but I know who the good ones are and the ones that I prefer to work with that I can help with if you’re interested. Apart from that.
Now, so what I’m going through first of all, let’s say – I said a very bold statement in that, and I mentioned it earlier, about that every $20 costs you 10 grand. So every $20 your apartment is under-rented or not getting the rent is should be, you’re receiving, well, it’s worth to an investor’s value $10,000 or more less than it should be. Now that’s a lot of money, okay? So what I’m saying is, I’m going to say okay, let’s say your apartment has not rented for that $500, its market rent which it should be, it’s rented for $460. Okay so that’s $40 a week less than you should be getting. Now some people go “Okay, well that’s not a big deal”. Well for starters, it’s over $2,000 a year, right, which is a lot of money. But you’ll see where it really gets interesting is when it comes to the value on how an investor looks at it.
So, when you put those figures into the equation that I talked to you before, which was that 460 x 52 which came out around 23,000, minus your expenses, you come out with a completely different figure. Now wait for it – woo – $263,142. That’s almost 40 grand. Okay, so that’s just from having your apartment not receiving the rent it should be, just by $40, the perceived value by the investor has gone down by $40,000. So now you can really see the effects and why it’s so important to have the right property manager, the right people looking after you and the right advice.
So I hope this has been helpful. Next week I’m going to be talking about traders, how traders purchase property, how to make sure, how to know if there’s trader interest on your property when you’re selling, what happens in this market with traders. Now, traders are people who buy apartments off you guys, off owners and sell it at a profit. And the weird thing is, is that the majority of traders’ deals they get through real estate agents. So that means you’re paying for a fee, sell to a trader who makes it a profit. So it’s how to be aware of that, understand it in this market, and make sure it’s not you.
Anyway, so, also when looking at this, what I’ve done is, if you haven’t already downloaded this report, I highly recommend you do. I’ve had a lot of really good feedback from it and it will help you obviously with the future podcasts. So just go to www.apartmentspecialists.co.nz, put in your email and I’ll send it out to you and, yeah, hope it helps.
I believe that the apartment market can be done a lot better and at Apartment Specialists we are going to change things up a bit in this industry.
Coming from an apartment selling background and the going out on my own I now have the autonomy to be creative with this industry so that it works better for all involved – you and the agents whether you are buying or selling.
I am lucky enough to have found my passion and have the energy and drive to start this up.
I believe a key factor to effective apartment real estate is ensuring there is sound communication all the way along the buying and selling process.
A way of communicating to the public is through the information provided on my website and by watching the many blogs I am going to create.
If you would like any further information, please feel free to contact the Apartment Specialists Team!
TRANSCRIPTION:
Good day, my name’s Andrew Murray from the Apartment Specialists and welcome. Today I’m going to be talking to you about what the Apartment Specialists is all about; why I created the company; and why you should be listening.
The whole reason for Apartment Specialists coming about is things can be done a lot better in this market in regards to the service to the owner. And I don’t mean when you’re just selling the apartment because that’s what I do, I mean it’s looking at every single owner in the CDB as already a client and educating them, so they know what to do that’s best for them.
So I’ll give you an example. Now, as an owner, to be able to make the best decision regarding your investment, whether it’s a house, whether it’s an apartment, whatever you wanted to do, you’ve got to have the right information. And if you don’t have the right information, it’s very hard to make the best decision.
Now, in the Auckland apartment market there’s over 20,000 apartments, yet most of the owners don’t live in these apartments; they’re either in different city, different part of Auckland, different island, different country. So how are they supposed to know:
What the apartment’s worth?
What they can actually get for their apartment?
Are the steps they’re looking at actually relevant to the market now?
Okay, what’s the best strategy to sell your apartment, i.e. should it be auction, should it be listing with a price, should it be tender? What are the previous record prices? What kind of method of sale were they achieved?
So, there’s so much an owner needs to know and how are they supposed to know this? They have to rely on one person. And I’ve seen it time and time again, and I’ve got a very strong belief that the owners aren’t receiving the information that they need to make the best decision for them. I’ve seen owners sell when they shouldn’t be selling. I’ve seen owners sell for far less than they should be selling.
There’s a huge trading business going on, this is where people buy apartments off owners and then sell them at a profit. Now, in some cases this is needed, when there’s emergencies, when they need a quick offer and things like that, but in a lot of cases my feeling is that the owner’s losing out here. They haven’t been made aware of or they aren’t aware of what their actual apartment is worth. Because some prices I just see them being sold at I’m just like, “What’s happening here?”
And so that’s just not part of it, it’s also about the realisation that a top agent, it doesn’t mean they’re getting the highest prices; it just means they’re doing a lot of sales. I love this industry, I’ve got a huge passion as you can probably tell and I’ll give you a brief background. Basically I left the company I was working for in the middle of last year, 2012, where I was the top apartment agent for the whole of New Zealand. To my knowledge I was achieving on average higher prices than any other agent, and that’s because I was doing it differently.
Then a lot of this stuff was getting restricted on how I could do business due to the nature of the real estate industry and the CBD market, and I butted heads. So I wanted to start my own thing and I wanted to do it better. I know I can do it better, I’m doing it better. And it sounds very arrogant, but when you’re really passionate about something and you really enjoy something, it’s not work. And it may be a little bit unhealthy at times and I think about apartments and working in industry, but hey, I’m that age when got the energy. I’m 33 and it’s my passion and I know I’m very lucky to have found it.
So anyway, back to why you should be listening. It’s about communicating to you an owner or a prospective buyer or somebody who wants to get into industry or a developer or whoever, just to educate yourself and get the knowledge so you know what the best decision for you is. And so this podcast is about giving you that information. So twice a week I’m going to be talking about a particular topic and going into some depth. And so this podcast is about giving you that information, so twice a week I’m going to be talking about a particular topic and going into some depth and opening your eyes in a market that it’s very hard to see what’s actually going on.
So the next one I’ll be doing will be on leaky buildings, and there’s a huge grey area around that. What is a leaky building? If a building does get labelled as “leaky” what should an owner do? Should they hold, should they sell, should they wait it out? Is it leaky? What actually means leaky? What’s the difference between maintenance and leaky? And everybody has maintenance. Every house has maintenance. How should it be sold if you do need to sell? If you do need to buy more? There’s a huge facet there, and this thing called a pre-contract disclosure which is supposed to disclose all the issues occurring in a building so a prospective owner can confidently purchase. Now, they’re supposed to be helping industry. Does it actually declare what needs to be declared?
So those are some of the topics I’m going to be going over which I think is key to every single owner because it’s a risk of every single owner in regards to the building and every building needs maintenance from time-to-time. So I’ll be talking to you about that in a couple of days. And in the meantime what I’ve done is, I’ve put together a report of 10 brief points that every owner needs to be aware of.
And this will really open your eyes, I mean, I’ll probably get a bit of flak from the industry for sharing some of this information, but it goes along the lines of why agents pay more to auction a property than they are to list with a price in regards to percentage received by the listing agent; how are you supposed to know what rent you should be receiving and what difference does this rent make in regards to what your apartment’s worth? There’s 10 things that have really made a huge difference. And how do you know if a trade is buying your property, things like that.
So just go to www.ApartmentSpecialists.co.nz and put your email in and download the report, and I hope it helps. Anyway, I look forward to seeing you next time. Talk soon.
