Property investment in New Zealand has seen some phenomenal growth over the last few years and it’s easy to see why. Regular rental income, outstanding capital gains and a sizeable nest egg for retirement are just some of the benefits property investors in New Zealand can enjoy. Before you jump in though, here are some things to consider.
1. What is my investment strategy?
Essentially, there are two property investment strategies to consider:
• Buying a property to rent it out – investors make money through rental property returns and growth in capital value over time.
• Buying a property and then selling it on for a profit - “flipping” a property aims to make you a profit by buying at one price and selling it for a higher price.
When defining your investment strategy, think about which type of strategy best fits your goals and objectives. Are you looking for a quick return? Are you waiting for capital growth? Or maximising rental returns?
2. Who are my partners?
Choosing the right partners is critical to your investment success. Whether you’re a new investor or experienced with several properties already under your belt, having a trusted support network is vital.
Your investment team should include your lender and mortgage adviser, real estate agent, property manager, accountant, lawyer and any tradespeople you can call on when things need to be fixed.
These are the people who will act in your best interests and should be experienced and reliable. This is especially important if you own investment properties outside of the area you reside in.
3. What type of property should I buy?
When considering the types of property you could invest in, it’s worthwhile determining your ideal tenant – the type of people you’d like to live in your property. If you’re looking at single professionals, you may want to consider buying a city apartment. For young families, you’d be looking at a stand-alone home in a good school zone.
Along with location, look at infrastructure – roads and public transport in and out of the area; the condition of the property – would a renovation improve its live-ability and encourage tenants to stay longer reducing your vacancy rates? Making good choices in the type of property you’re buying will set you up for a sound investment.
4. How do I get started?
Your first step is talking to a Mortgage Express adviser about either accessing finance or using the equity in your existing property to fund the purchase of an investment property. It’s important your loan is structured to get the most out of your investment and our team can help you do just that.
You may also want to consider investing in a property manager who can oversee the day to day dealings with tenants and rental property issues. You can find out what to expect when you work with a Harcourts Property Manager in this article and book a free rental property appraisal here.
The information contained in this newsletter was prepared by Mortgage Express Limited. While every care has been taken to supply accurate information, errors and omissions may occur. Accordingly, Mortgage Express Limited accepts no responsibility for any loss caused as a result of any person relying on the information supplied in this newsletter.
This newsletter does not constitute regulated financial advice to retail clients. It may not be relevant to individual circumstances. Nothing in this newsletter is, or should be taken as, an offer, invitation, or recommendation to buy, sell, or retain any investment in or make any deposit with any person. You should seek professional advice before taking any action in relation to the matters dealt within this newsletter.
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