Investing in rental property
Some lessons were learned during the Global Financial Crisis (GFC) so residential property remains a popular investment choice for Kiwi’s. The traditional mentality of “invest in bricks and mortar” still has relevance today but if you are considering getting involved in the property investment market for the first time here are some useful tips to help you get started.
What are your goals?
A longer term strategy including consistent property rental returns is today more popular than the focus on short turnaround, with a capital gain, that was popular in the early 2000’s. Capital gain is still possible as the property market has gone up considerably, but this remains a riskier investment strategy. There is no best practice - the key is to understand the positives and potential negatives of each strategy as you increase your portfolio. You are more likely to reach the investment portfolio you want if you have a plan.
What are my returns?
There are a number of factors to consider. Outgoings such as rates, insurance and maintenance as well as the income stream, traditionally rent and potential equity in your property. We have some useful calculators that can serve as a guide.
Where to buy the perfect rental property investment?
Most people start in their local town but provincial New Zealand offers some very interesting investment opportunities with different dynamics. Talk to your agent about your options.
Where to get advice?
Your Property Brokers sales consultant will be able to keep you up to date on the current real estate market trends. Talk to your bank and solicitor, earlier rather than later, so you can feel confident about your decision going forward.
Managing your rental property
You can manage your property yourself or engage a Property Brokers Rental Property Manager to do it for you. Both can work well but the key question to ask yourself is which method will maximise your investment? Don't forget to include the value of your time in the calculation.