Once you’ve found the right property, the next step is to negotiate and complete the purchase.  It’s essentially the same as if you were buying your own home, so check out the ‘Exploring Options’ step of the ‘Selling and Buying’ section – in particular:

• The ‘How to find a home’ section outlines the various options available for finding the right property.
• The ‘Ways to buy’ section gives an overview of the various options for purchasing including offer and negotiation, auctions, and tenders.

The ‘Making an Offer’ step goes into more detail on the process, including negotiating strategies, setting conditions and others involved including valuers and solicitors.

Specific things to consider for rental properties

Here are a couple of things to keep in mind when you’re buying a rental property.

1. Using a ‘nominee’ clause: Investors may want to consider using a ‘nominee’ clause in the sale and purchase agreement.  This will allow them to consider what ownership structure best suits their investment and change the purchaser prior to settlement.  For example, Todd and Jennifer decide to purchase a rental property.  They are not sure whether the property should be purchased in their own name or their family trust.  On the sale and purchase agreement they put ‘Todd and Jennifer Flanders or nominee’.  This gives them the option to change the purchaser to ‘Flanders Family Trust’ before settlement.
2. Valuations – a valuation may be required for the purpose of obtaining a home loan, and it can also provide peace of mind that you are not paying too much.  For investors, valuations can also be useful to:

• Separate land, building and chattels values.  This is useful information required for depreciation purposes on your tax return.  Note that before a depreciation expense can be claimed on chattels, the Inland Revenue must be satisfied as to how the value was fixed – a valuation provides clear documentation.
• Provide information about market rental levels, and the level of demand in the rental market for this type of property.
• Provide information on comparative yield levels.
• Provide a view on the impact of improvements to the value of the property.

This material is for information purposes only. You should seek professional advice related to your individual circumstances. While The National Bank has taken care to ensure that this information is from reliable sources, it cannot warrant its accuracy, completeness or suitability for your intended use. To the extent permitted by law, The National Bank does not accept any responsibility or liability arising from your use of this information. Our lending criteria, terms, conditions and fees apply.