NB. This article has elements to it that are specifically time related and may change over time.
The basic principles still apply, however.
A growing number of people, recognising that the economy will eventually turn and property values will rise again, are considering property investment. Maybe you are one of those people?
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Here are a few of the trends in New Zealand today – some good for the investor, some not so good: |
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► There are not a huge number of properties available right now.
► There are, however, bargains to be had if an investor is willing to be patient and look around.
► A slight increase in the number of people contemplating property investment has put a little pressure on the market forcing prices up slightly.
► The number of mortgagee sales is predicted to rise over the next 3 – 4 months which may, once again see some bargains available.
► Interest rates are low making mortgage repayments more affordable.
Property investment can be a very worthwhile investment. It pays, however, to first of all work through both the advantages and disadvantages.
The advantages of property investment:
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The disadvantages of property investment:
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• Rental income can supply an added income stream.
• When you sell the property, you gain the benefit of any increase in the value of the property.
• Many of the expenses on the property are tax deductible. These include; depreciation and interest paid on your borrowings.
• You can use the equity you have in your investment property(s) to borrow more money and purchase other investments. |
• Rising interest rates could cut into your profit.
• Owning a ‘rental’ can take up a lot of your personal time with maintenance etc.
• House prices usually rise but have been known to fall.
• You need to see this as a long term strategy meaning your money can be tied up for a long period of time.
• You could get tenants who are either bad payers or bad tenants in terms of the way they treat your property.
• If tenants leave it could take some time to find new ones. |
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