Build your wealth with the investment strategy with strong historic returns – Residential Property
We work with everyday mum and dad investors. When we calculate how much they would need to save if using a standard savings account every month in order to be financially independent the average amount is around $10,000 per month.
Most people wouldn’t be able to save that amount of money. In short, most Kiwis can’t ‘save’ their way to retirement. For many, it’s an impossible mission. And for a lot, they are starting that savings plan later in life, not leaving much time to accumulate wealth.
Residential property investment is in most cases a ‘leveraged strategy’ that enables you to and grow your wealth exponentially and lower the amount needed out of your pocket towards a savings plan. Of course, this comes with risk, and cashflow planning is needed in best and worst case scenarios, hence the need for regulated and qualified advice.
Leveraging Into Property
How does a residential property investment strategy work?
Borrowing to invest into residential investment property is what’s known as a ‘leveraged strategy’. This means in an appreciating market that you are receiving growth on money you have borrowed from the bank – money you didn’t have to save from your income.
For example if you borrow $500,000 and invest it in property for 10 years and that $500,000 grows at say 5% per annum – that compounds over 10 years and is savings for you. The capital gain in this scenario is over $300,000. That’s pure growth – not a figure you had to save. This is wealth going towards your retirement saving strategy. There will be generally be weekly amounts you will have to ‘top-up’ to keep the mortgage and property running along its journey. Our job is to check the affordability and return on this investment to ensure it’s right for you.
By the way, property has grown closer to 10% per annum over the last 50 years in NZ. So, we would like to think the above figure of 5% per annum is lower than average if you hold the property for a 10 year period.
Why use an adviser to help you with your residential property investment strategy?
Property investment involves assets worth hundreds of thousands of dollars and does come with risk if it’s not set-up correctly.
As property investment experts we will help you analyse the best investment options for you. We can find properties that will make you money and make your life as a landlord as easy as possible by connecting you with the right people to support you on your investment journey. .
Our role is to minimise the mistakes that are so often made when people try to DIY their residential property investment strategy. We take risk management and mitigation very seriously when it comes to property investment.
How ‘groups’ can invest into property
Buying Investment Property at Retirement Age
What is the process?
The first step we take is to establish financial feasibility and develop your investment strategy. We also want to look at financial goals and timeframes to ascertain suitability of property, and types of property.
The next step is to support you through the pre-approval process with the bank. This will determine how much money you can actually invest.
From there we provide a property search and analysis service. During this process we find a property that fits your specific financial position and goals. We do this in areas where you can get the right rental yield – those we believe are earmarked for growth over time. We also make sure the investment can be structured properly for tax efficiencies.
The next step is a property investment analysis report – this is where we introduce the property to you and run you through the numbers. We want to ensure in best and worst case modelling that you can afford the property, and that your return on investment for any funds introduced stack-up in relation to goals and other investments you could otherwise have invested those funds into.
Finally we facilitate the purchase process with the bank, accountant, and lawyer.
How do I get started with residential property investment?
If you own your own home and have a stable income you are probably in a good position to invest in residential property.