Buying an investment property.
Supporting your ambitions to grow wealth.
Making it real.
Investing in a rental property or two, or even more, is a Kiwi tradition. If you’re keen to get started with an investment property portfolio, here’s our six-step 101 course for buying your first renter.
Deposit strategy
Make a plan
Team up with a mortgage adviser
The property hunt
Making an offer and settling
Final steps
Need help with an investment property loan?
Get a mortgage adviser on side to hunt down the best loan for your investment property purchase.
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Property investment FAQs
Getting into investment property is exciting, but it can also raise a bunch of questions that demand accurate answers. This is not really the time to pick the brains of your friends and family! Based on our experience, here are some concerns that are directly related to buying an investment property. All answers have been approved by expert mortgage advisers.
What’s more important, rental yield or equity gain?
Higher rent in the short term or more equity in the long term? It’s a question every property investor has to consider. If you want to build wealth, experts generally agree that it’s better to invest in a property that has more potential for capital gain, rather than focus on high rental yield. If you want to generate income for retirement, finding cheaper properties that offer higher rental yield is a common strategy.
Should I buy a do-up as a rental property?
Improving a property after you’ve bought it will add additional rental income and extra equity to your investment equation. This is especially true if you can do some of the work yourself. So consider ugly ducklings when you’re hunting for the right property, because targeted renovations can really pay off. However, it’s wise to consult a builder to determine the cost of improvements before you decide to buy.
Do I need an accountant for my rental property?
Even if you’re handy with Xero, it’s likely you’ll need an accountant to prepare financial statements and income tax returns each year. Ask around for recommendations, check out likely candidates online and always enquire about fees, because you shouldn’t have to pay top dollar for straightforward re
What’s more important, rental yield or equity gain?
Higher rent in the short term or more equity in the long term? It’s a question every property investor has to consider. If you want to build wealth, experts generally agree that it’s better to invest in a property that has more potential for capital gain, rather than focus on high rental yield. If you want to generate income for retirement, finding cheaper properties that offer higher rental yield is a common strategy.
Should I buy a do-up as a rental property?
Improving a property after you’ve bought it will add additional rental income and extra equity to your investment equation. This is especially true if you can do some of the work yourself. So consider ugly ducklings when you’re hunting for the right property, because targeted renovations can really pay off. However, it’s wise to consult a builder to determine the cost of improvements before you decide to buy.
Do I need an accountant for my rental property?
Even if you’re handy with Xero, it’s likely you’ll need an accountant to prepare financial statements and income tax returns each year. Ask around for recommendations, check out likely candidates online and always enquire about fees, because you shouldn’t have to pay top dollar for straightforward re
Is capital gain on a rental property taxable?
Capital gain on a rental property is only taxable if you sell the property within 10 years of buying it. This 10-year period is known as the ‘bright line test’. Your accountant will know all about it.
For a city renter, is it better to buy an apartment or a house?
Apartments can be appealing, because they’re cheaper to buy and can command significant rental yield. However, the capital value of apartments tends to grow at a slower rate because they have a much lower proportion of associated land. Houses with land are usually a better proposition if your primary goal is long-term capital gain. If you want to build an income stream, an apartment with high rental yield could fit your plans nicely.
I’m a Kiwi living overseas. Can I buy a rental property in New Zealand?
New Zealand citizens living overseas can buy commercial and residential property in New Zealand. Because you’re living in another country, the property will automatically be classed as an investment.
Is capital gain on a rental property taxable?
Capital gain on a rental property is only taxable if you sell the property within 10 years of buying it. This 10-year period is known as the ‘bright line test’. Your accountant will know all about it.
For a city renter, is it better to buy an apartment or a house?
Apartments can be appealing, because they’re cheaper to buy and can command significant rental yield. However, the capital value of apartments tends to grow at a slower rate because they have a much lower proportion of associated land. Houses with land are usually a better proposition if your primary goal is long-term capital gain. If you want to build an income stream, an apartment with high rental yield could fit your plans nicely.
I’m a Kiwi living overseas. Can I buy a rental property in New Zealand?
New Zealand citizens living overseas can buy commercial and residential property in New Zealand. Because you’re living in another country, the property will automatically be classed as an investment.
Essential reading for property investors.
Buying an investment property is easier and less stressful when you do your homework before you hit the market. We’ve covered the basics here, to give you a good understanding of the way forward.
A first-timer’s guide to investing in property
Property investment has been big news over recent years. Low interest rates and soaring demand for property increased FOMO to record levels, so properties suitable
How do I calculate yield on a property investment?
The yield on any investment usually refers to how much money it makes each year as a percentage of the amount invested. This percentage sometimes
Planning a property portfolio for retirement income
Creating future retirement income by buying investment properties is a time-honoured way to build your wealth, so you can achieve freedom from work. And we’re
Check out the latest mortgage rates.
Keeping an eye on interest rates helps you to recognise a good deal. It’s all part of the due diligence that turns you into a successful property investor. The rates have been grouped into different lender types. You can also sort the entire list of options by rate.
Calculators to get you there.
Use our calculators to develop a finance strategy for securing an investment property. You can estimate how much you could borrow and what your repayments might be. We also have a budget planner calculator that can be used to work out probable annual costs for your investment property – things like rates, maintenance and insurance.
Budgeting is the best way to steer your finances, stay in control and prepare for managing your mortgage.
Work out how much you could borrow based on some quick questions about your current financial situation
Get an estimate of what your repayments could be, based on your mortgage amount, term and interest rate.
Visit the Learning Centre.
Before you start talking to lenders or your mortgage adviser, brush up your knowledge about finding and financing an investment property. Our Learning Centre has informative articles and guides that can help you to make good decisions. They’re all written by expert authors and checked by our panel of mortgage advisers.
