Property investment is one of the most popular ways of building wealth in New Zealand. The key to success is extensive research and planning. Your strategy should ultimately focus on owning the right kind of property in the right location. At Mortgage Masters, our Auckland mortgage company has extensive experience helping investors. Below, we offer insights for finding an investment property Auckland investors can use to build a better financial future.
Where to Buy
The location of a property has a significant influence on its value and potential as a lucrative investment. Building or purchasing a property in the right location will require you to conduct research into different rental markets. Indications of an area with quality investment potential includes:
- Rental yield: Aim to find an investment property Auckland renters will compete for. Look at areas with high demand and high rents and compare with property values.
- Growth suburbs: Look for areas where high growth is expected, as these will have the greatest potential for capital gains.
- Low vacancy rates: Research vacancy rates in the area. A high vacancy rate could indicate an unpopular area. A low vacancy rate is crucial for keeping up with mortgage repayments and achieving a return on investment.
- Town planning: Proposed changes in the area could affect the value of a property located there. This includes new developments and zoning changes.
Desirable Features
Your investment property should appeal to as many people as possible. Features like a second bathroom, a spacious kitchen, plenty of storage space and proximity to shops, schools and transport all increase the value and appeal of a property.
Find a property that will appeal to more than one type of buyer or tenant. Ideally, your rental property should be appealing to single professionals, couples, families and retirees. Neutral colours and practical features help your property appeal to the widest possible market.
Low Maintenance
Keep down costs by reducing the amount of maintenance a property is likely to need. For example, a pool or elaborate garden can be appealing to potential occupants but are costly and inconvenient to maintain and repair. An investment property that is low maintenance benefits both you and potential tenants or buyers.
Understand Your Obligations
Renting out your investment property also involves abiding by various laws and regulations. Some of your responsibilities include:
- Maintaining the structure and exterior of the house
- Ensuring all installations work, e.g., gas, electricity and heating
- Installation and appliance maintenance and safety
- Treating potentially health-threatening and safety issues
- Performing any other duties stipulated in the tenancy agreement or the Residential Tenancies Act 1997
Houses vs. Apartments
Buying an apartment is generally a cheaper investment option, however, the apartment market can be fickle where valuation is concerned, so investors should base decisions on the long-term yield of the property. Price rises for houses tend to be bigger than apartments on average, providing better capital gains returns. On the other hand, houses tend to require more ongoing maintenance and repair costs.
Ultimately there are pros and cons to all dwelling types. You should pay attention to lifestyle trends and get the right advice. For example, an Auckland mortgage company can help you tailor your investment strategy if you’re buying in Auckland. Remember to consider the segmentation in New Zealand’s property market when deciding. What is happening in one region may not reflect trends in other places.
Consult the Mortgage Broker Auckland Investors Can Trust
Visit Mortgage Masters to consult with a mortgage broker Auckland investors can rely on for expert advice on refinancing their loans and finding the right solution for your circumstances. Get in touch today for a free consultation.
