How to invest in New Zealand property | City Sales Real Estate

How to invest in New Zealand property | City Sales Real Estate

Get started on an apartment property investment journey

When it comes to the property market there are a variety of options to choose from. One of the choices growing in popularity is investing in apartments.
Apartments offer many benefits, including consistent cash flow through rental income, capital gain potential, and low vacancy rates. They are also a great way to get started in real estate investing with a rental property.

Is New Zealand property a good investment?

New Zealand has long been considered a desirable place to live, and it is no surprise that many people are now considering investing in property here. There are several reasons why New Zealand property is a good investment. First of all, the country has a stable political environment and a strong economy which means we have a strong immigration numbers putting constant pressure on the housing market. This drives the cost of housing in New Zealand up. Along with our constricted amount of land, and further constricted allowances on use of land - housing affordability is not likely to change anytime soon.
For those thinking costs can't get any more out of control - look to London and New York. We expect prices to continue to rise.
If you are looking for an investment that ticks all the boxes, then New Zealand property is definitely worth considering.

Why invest in an apartment over a house?

When it comes to investment properties, many people automatically think of houses. However, there are several reasons why an apartment can be a better property investment choice.

Initial Purchase Price

With residential property prices (houses) continuing to rise in New Zealand, houses are now out of reach for many property investors, but theres another great property investment opportunity in apartments.
Apartments in Auckland CBD can be found starting around $350,000 for a two bedroom, freehold, tenant ready unit with no remedial or other issues, where a freehold house in Auckland CBD (likely WITH issues, repairs and remodeling required before you would find a respectable tenant) would start at $850,000 and quickly rise from there to well over $1,000,000.

Mortgages therefore go from somewhere around $420 a week for an apartment to $1030 for the house.

The rental yield on the apartment can often entirely cover the mortgage, where the house is likely to be running at a loss the first few years while you pay down principal on the mortgage.

Maintenance

Apartments typically have lower maintenance and repair costs than houses, making them a more affordable option in the long run and a much easier investment property due to the lesser amount of time needed by you arranging or doing maintenance yourself.
And lets face it, its the kiwi way to DIY so as much as you think at purchase "I'll let the professionals handle it", when the quote comes in at over $200 to change a few lightbulbs or water blast a walkway you'll end up packing up the car on the weekend to go get it done yourself.

Whether you’re just starting out in the world of real estate investing or you’re looking to diversify your portfolio, an apartment could be a great investment.

Here are some tips for getting started in apartment investing:

1. Research the market.

It is important to do your research before investing in any particular property or type of real estate. Make sure you know what the current market conditions are and what the future prospects look like.

Apartments come with a variety of costs you mightn't be aware of such as body corporate fees. These fees cover the cost of maintenance of the common areas of the building such as foyer, building exterior and any maintenance and running costs of building facilities such as pool/gym.
There is a total cost for maintenance for the building that is then apportioned to each unit.
The body corporate fee is an apartments version of home maintenance. Think lawn mowing and garden maintenance, house washing etc.

The difference is that in an apartment it is all organised and completed for you by the body corportate rather than you having to do your own research on costs, value etc and spending the time being there, updating tenants, getting your own home repairs and maintenance done.

Find a good property manager

Property managers can do as much or as little as you want. They can help you find tenants, manage repairs and maintenance and handle other day to day tasks. In the case of a house - your property manager is a bit like your personal body corporate minding property repairs and maintenance so you dont have to.

At City Sales our property management team understand the rental market. They can help you throughout your rental journey by helping you find new properties, choose the right property, give you average rent any new property might bring in, introduce you to mortgage brokers and accountants who will make sure you have the right tax structure and put you on the path to passive income, reach investment goals and create wealth.

https://citysales.co.nz/property-management

Have a solid investment plan

Any wise investor knows that having a solid plan in place is essential to success. Without a plan, it is all too easy to make impulsive decisions that may not be in your best interest. When it comes to investing in real estate, a well-crafted plan can help you avoid costly mistakes and maximize your chances for success. Before making any investments, be sure to do your research and develop a strategy that meets your specific goals. Once you have a plan in place, stick to it! Making regular, consistent investments is key to achieving long-term financial security. With a little planning and discipline, you can make real estate investing work for you.

If you are looking for a property investment, apartments should be at the top of your list as a helpful step towards financial freedom. They offer stability, affordability and convenience – everything you need to get started in the world of property investing.

Contact us today to learn more about our current listings and how we can help you find the perfect apartment investment for you.

Our team will show you multiple properties pointing out the differences such as which are most likely to have good capital growth, which the bank prefer and will likely give you higher rents and build wealth.