Residential Investment

Residential Property Investment in New Zealand


Residential Property Investment in New Zealand

Everyone is striving to attain financial freedom. It does not matter which stage of your life you are in, what matters is to put your best foot forward and work towards achieving this goal.

Residential property investment is typical in New Zealand, and it is increasingly gaining popularity as more people seek to achieve financial freedom.

Residential real estate is any development meant for human settling; these properties include; condominiums, townhouses, undeveloped land in residential zones, etc.


Residential Property Investment Strategies

There are three investment strategies for residential property investment :

  • Flipping: this is where you buy a down run property, make renovation and sell at a higher price to make a profit; It is usually a short-term investment — most ideal for investors who do not wish to hold on to property for long.

  • Renting: here you buy property, for the sole purpose of cash flow. This investment is mostly ideal for retirement, where you need a steady income.

  • Capital gain: This is where you buy property and hold on to it for years, then resell when it’s gained value to your satisfaction

Pros and Cons of Residential Property Investment in NZ

Your choice of these investment strategies is mainly dependent on your financial goals.

 It is only prudent to weigh the advantages and disadvantages of residential property investment to help you decide whether or not to invest. Let us look at a few of these;

pros and cons of residential property investment
Requirements for Residential Property Investment

Requirements for Residential Property Investment

Property investment in New Zealand is not as easy as you might think so getting the retirements right is the key in success. 

There are few things that will need to consider when investing in residential property : 

  • Do your research

  • Set your goals

  • Plan your finances: 

  • Find the location:

  • Start shopping

  • Make a deal

  • Due diligence

  • Seal the deal

  • Tax

Rules of Residential Property Investment

Be on the watch out for negative gearing: whereby your expenses exceed your rental income, this is usually evident during the early years of ownership. Negative gearing in New Zealand has a tax advantage where you offset the loss against income tax.

Think Capital gain: in as much as the cash flow from rental income keeps you afloat, the main aim to get into property investment is to build a sustainable asset base; to successfully create the wealth that you desire.

Location matters: property located near schools, hospitals, etc. have high demand and always attracts handsome rental income. Security is also a key factor to consider when choosing a location.

Put your emotions in check: when you get emotionally attached to the property, you tend to spend so much money on it that it becomes almost impossible to make a sound profit. Emotions clouds judgment and interferes with your bargaining power

Residential Property Investment

Residential property investment has been one of the most profitable type of investment in New Zealand. A lot of people have made a lot of money in the past and are still making good returns. If done right it can be a life changer but with big returns residential property investment can also be very risky and you might end up losing a lot. Proceed with caution and always seek professional advice.