June 2024
Read Time: 3 Minutes
Investing in property can be very rewarding, but make sure you do your homework before buying an investment property. Here are our top investment property tips.
When deciding where to buy, location is key. Consider your ideal tenants and where they would like to live and look for growth areas where there is a high demand for rental properties. Look for a location where housing is in demand and there is potential for capital growth.
Search for areas with:
Don’t forget to look for red flags that may put tenants off the property.
Consider your motivation for investing in property. Are you driven by capital growth, or are you motivated by cash flow?
Exclusive suburbs may appear to offer increased potential for capital growth, but it’s important to be sure you can find tenants who can afford the increased rent.
Rental yield measures the annual profit from your investments as a percentage of their value. A higher rental yield means more cash flow. Before purchasing, consider the potential rental income relative to the purchase price and calculate the rental yield to ensure it meets your investment goals.
Always do your due diligence and get a qualified builder or engineer to assess the structural soundness of a property before you purchase. Assess the cost of any areas that need upgrading against any potential yields for the property.
Ensure the property is Healthy Home Compliant or understand how much it will cost to achieve compliance. Remember all private residential rental properties in New Zealand must comply with the full list of regulations for the Healthy Home Standards within 90 or 120 days of any new, or renewed, tenancy.
When choosing the size of your investment property, you should consider the local real estate market conditions, the demand for different property types, and your budget.
Studio and one-bedroom apartments are popular lower cost options, but larger properties can also be a good investment. Bigger properties may appeal to families and professionals looking to share with others, increasing your potential rental return.
If you are buying an apartment, unit or townhouse it’s important you understand what a Body Corporate or Residents Society is. Read our guides: Buying a Unit-titled Property and What is a Residents Society.
From April 1 this year investors have once again been able to deduct mortgage interest from rental income. This change, coupled with the bright-line test for residential property moving back to two years, may make it a good time for investors to get back into the market.
Read our article: Is It a Good Time to Buy an Investment Property?
While it is possible to manage your own rental property there are many benefits to engaging a professional property manager such as Crockers. Staying on the right side of the law, having added peace of mind, optimising your investment and keeping on top of the market are just some of these benefits.
Crockers has been handling Auckland rentals for decades. Our seasoned team of experts have seen it all before and have a true commitment to knowing what is going on with every property we manage. When you engage a Crockers property manager you can rest assured your property is being taken care of and your tenants are having the best possible experience.
What makes our property managers different is the knowledge gained from years of experience, practical ability backed up by a seasoned team and a true commitment to looking after your place.
New Healthy Homes Standards came into effect on 1st July 2021. Our Healthy Homes Hub is your one-stop-shop for useful articles, guides and on-hand advice from property experts.
Call 0800 CROCKERS or Call 0800 2762 5377
