Ian Webb discusses how you can be the first link in the value chain of creating wealth through property.
Possibly one of the best kept secrets in the mortgage industry is this: The LVR restrictions do not apply to you if you’re building a brand new home.
Thinking as a property investor, in the last 5 years years or so the main barrier in the way has been these LVR (loan to valuation) restrictions in place which dictate that you effectively have to have 35% of the purchase price to buy an investment property (in the form of cash or equity in your home). Arguably this has taken [some of] the steam out of the housing market and put pressure on the existing housing stock across the nation. These regulations had an unintended side-effect – the main way to keep prices growing at a more realistic pace, is to increase the supply of housing stock (not just kill the demand).
When the LVR restrictions were introduced, Ian Webb was instrumental in creating a ‘hole’ for new builders to climb through. Did you know that for as little as 5% deposit you could build your next rental property?
Well if it’s that easy, why isn’t everyone doing it?
Here’s a couple of reasons why:
1 – not many people know about this loop-hole (spoiler alert)
2 – funding new building projects can still be very difficult
3 – capital gains in newer subdivisions and regional areas are still a little less certain compared to city centers
Have a listen to this insightful and honest show and ask yourself this question: Could building a home build equity over the long term for you? Maybe building an investment property portfolio could still work for you and if so, *getting to the starting line correctly is critical, if you want to get to the finish line intact.*
We hope you enjoy this peak into how construction finance works, warts and all!
Check out https://www.newbuild.co.nz/
NewBuild are the specialists in Residential Construction Lending. NewBuild’s proven method will simplify the process – to make building your new home more affordable, whether you want a Progress Payment Loan or a Turn-Key Loan, NewBuild has the best option for you.
Where to find Darcy Ungaro:
Ungaro &Co (registered) financial advisers https://www.ungaro.co.nz
NZ Everyday Investor Podcast:
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