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Property: Still The Best Investment

Property: Still The Best Investment

If you’re looking to invest your money right now, you can’t beat the returns on property. With the OCR expected to remain at 0.25 per cent, at least for the foreseeable future, historically low interest rates, and no restrictions on the amount of money banks can lend to high-LVR borrowers, many economists believe real estate is the *best investment option in the current climate. Follow these handy tips to secure your financial future by investing in property.

Best Market to Invest in

In August 2020, comparison website Finder surveyed a number of economists and other financial experts, in a bid to understand which is the best market to invest in right now.

Despite the impact of lockdown in New Zealand and the economic fall-out of COVID-19, 50 per cent of those surveyed believe the country’s property market is the best investment.

With the OCR at 0.25% and banks’ lending at around the 3% mark for 12 months, for buyers with good job security, lower interest rates mean the potential to service a larger mortgage and the opportunity to grow an investment portfolio.

Start Your Property Investment Journey

Ready to get started with investing in property? Follow these 5 handy tips to stay on track:

1. Check Your Finances
Determine how much you can afford to spend. Talk to your accountant to get an accurate snapshot of your current financial situation, and get pre-approved for lending by working with your mortgage adviser. Pre-approval will set you up with a realistic budget and ensure you’re ready to move quickly if you find an investment property. Your mortgage adviser will also be able to help you determine how much equity you have in your existing home which you may be able to use to kick start your investment journey.

2. Set Clear Goals
Start your property investment journey with a clear idea of why you want to invest in property. Perhaps you’re planning ahead for your retirement by buying an investment property with long term capital growth prospects. Or you could be looking for an extra income, in which case a high cash flow property could be the answer. Whatever your goal, state your outcomes up front so you know where you’re going.

3. Choose Your Strategy
Your property investment strategy is your road map to achieving your investment goals. There are two strategies that property investors tend to use: Buy and hold or buy and flip. Buy and hold means investing in a well-maintained property and holding onto it for the long-term, making money when it sells for an increased value. Buy and flip means investing in a property that needs work, doing a renovation, and then selling it on for a profit. Decide which strategy would work best for you.

4. Do Your Research
Finding the right property can be challenging so it’s important you do your research. Look at how long it’s been on the market for, how many times it’s been sold in the past, median sales prices and historical capital growth rates, how much comparable properties are selling and renting for, and the estimated market value of the property.

5. Choose Your Team
You don’t need to do it all on your own: having a property investment team of people around you helps you stay on track. Choose your accountant, lawyer or conveyancer, mortgage adviser and property manager; a team of experts who are proficient in their skillsets and together can help you build a quality property portfolio.

Get started on your property investment journey today. Start by talking to a Mortgage Express adviser about your financial options for property investment. Our team can help you find the right finance so you achieve your goals.

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