Have you ever thought about investing in property? If you've got a sound strategy it's a great way to build wealth for your retirement and make your money work for you.
Unfortunately, many Kiwis don't get further than thinking about it. After all, picking tenants, maintaining the property and everything else that comes with being a landlord can take up a lot of time and energy.
In this blog, we've simplified the first steps to getting started in property investment to make it a little easier for you to get started. Put these tips into practice and you'll be able to stop thinking about investing and really make it happen, to lock in a more comfortable retirement and a better future for your family.
To buy an investment property, it's usually best to have a deposit equal to 30 per cent of the asset's value. Take a close and detailed look at your assets, income and expenditure and figure out how much you can comfortably afford to invest.
It's also a good idea to speak to a mortgage broker to discuss how much you can borrow so that you know which properties are within your price range and how much it may cost to maintain your mortgage. Your broker may also be able to help you unlock equity in your family home to put towards your deposit.
Why do you want to invest in property? If you want to supplement your income it might be a good idea to buy property with high cash flow. On the other hand, if you're looking to set yourself up for retirement and take care of your family over the long term, property with solid capital growth potential might be better.
If you need help ironing out the details of your plan speak to a real estate agent experienced in investment property, or a specialist financial adviser.
There are risks to investing in property, as with all other investments. Knowing exactly what these are and planning for them is the best way to protect yourself.
A few of the biggest risks you need to consider include:
To minimise these risks understand the market you're buying in clearly, don't stretch your finances and use a property manager to help select and manage your tenants. Try to anticipate any other risks you may encounter and make plans to protect yourself and your money.
To reach your investment goals you need to fully understand the market in the area that you're investing in and the property you're buying. Look at how long properties are taking to sell in the area, how the average price has moved recently, and where it's tracking for the future. Speaking to an experienced real estate agent is a great way to start your research.
When you've got your eyes on a specific property look at how much comparable properties in the area are selling for and consider the property's sales history and rateable value. If the home has been up for sale for several months it may be overpriced, or have other issues.
Having an experienced, trusted team of experts around you makes investing in property in New Zealand less stressful and less risky. In fact, the support and technical advice that mortgage brokers, property accountants real estate agents and property managers offer can often be the key to success, especially for those new to investing.
Get started the right way and become a successful investor regardless of what the market's doing by surrounding yourself with a team you can trust from day one.