Grow your home portfolio not your stress levels
Property investment is the single largest form of investment in New Zealand and part of Kiwi culture. Successful property investing calls for careful planning. You need to find the right property which will secure your financial future. To do this you need to seek expert financial advice to understand the financial commitments involved with an investment property to ensure you achieve the best results.
Property investment can be a rewarding experience if you are looking to achieve one of these objectives:
Build your future income
Rental income from investing in a property can help you build your overall income if you don’t want to rely on your own salary / business income or superannuation income in the long run.
Diversify your investment options
As an investor, you may be looking to spread your risk and apart from investing in stocks, bonds and bank deposits, investing your money in property is a good option to diversify your risk
Secure your children’s future
There is an ongoing demand for property as New Zealand population is growing and housing supply remains tight. The prices of houses are continuously rising and to help your kids in future to get a foot on the property ladder, you may want to invest in property now so your kids have a helping hand when they grow up.
Equity or cash deposit
Whenever you purchase a property you will need to put some deposit from your side towards the purchase of the property. The deposit typically needs to be 20% of the purchase price of the property.
This deposit can come in two ways: either through cash deposit from your side or by using the equity in your current home. Home equity is the difference between what your property is worth today in the market and the present home loan on the property. The beauty of home equity is that it can let you purchase your ideal investment property without a substantial pool of spare cash.
Make profit from growth in property value
If the property market is booming and values of the property are going up every year, you may want to invest in property with the intention to sell it after few months or years and use the growth in the value of the property as profits.
Get better returns than stocks in long run
As an investor if you are looking to get a better return from your money, investing in a property which grows rapidly in value and selling it off after a time can give you a better bang for your buck than stocks or bank deposit.
100% Loan to purchase investment property
Depending on the value of the equity in your current home, bank may approve you 100% loan towards the purchase of the investment property. This can take place provided the total loan on your current property and new investment property does not exceed more than 80% of the combined market value of your current property and new investment property.
Take advantage of tax incentives
The New Zealand government does not tax you if you make a profit from selling a property as long as you don’t do it as a profession. Also in some cases, holding onto a property over long term can help you pay less tax on your personal income. These tax incentives are attractive for anyone investing in the property market.
Investing in a property requires you to pay some deposit from your side towards the property purchase and take the remaining difference in home loan from the bank.