Buying an investment property in New Zealand can be a great option. If you were looking at ways to build up your wealth and support yourself well into retirement, investing in the housing market can be a good start. Like a lot of things in life, it's important to think about all the options before diving in head first.
To help you prepare for this exciting journey, here are three things you should think about when buying residential investment property.
1. Understand your limits
Buying a property is a pretty big commitment, both emotionally and financially. Part of the process is knowing how much you can afford – and sticking to that budget. The last thing you want is to be caught out in the rain if things go wrong, so make sure your finances are well prepared.
Not only that, you should have a bigger idea of how much the property will cost you on an ongoing basis. Insurance, rent and maintenance can drum up consistent charges, as can unexpected things like damage and disputes. Above all, enter into an investment with a sound idea of what you'll need to spend both now and into the future.
2. Think logically
If you're buying a property to rent, the reality is you aren't going to live in it – your tenants are. Renovating and updating with all the mod cons and luxury elements might appeal to your tastes, but it's important to aim for practicality and liveability over emotional attachment.
Consider what potential tenants would like and what it would take to meet those needs. Will you need to overhaul the property? Or change a few key rooms with a lick of paint and new flooring?
3. Minimise risk
Of course, you can't eliminate risk completely – it's a part of every day life and sometimes you need to put yourself out on a limb. However, the crucial thing is to avoid the predictable pitfalls. Choose a property carefully and get advice where you can. This might include getting a professional building inspector to examine the property for any serious structural weaknesses, researching a suburb carefully with help from your real estate agent, or getting solid property investment advice from an Authorised Financial Adviser.
Here's to your financial independence!
Authorised Financial Adviser / Investment Property Expert
Contact us now!