Property Investment NZ: The Best Spots
Buying an investment property is an excellent idea, especially while borrowing money is cheap and the housing market is going crazy! Whether you are a first home buyer, or an accomplished investor, it’s important to think about how to approach the craziness of the property market. In New Zealand, an investment property is a super popular form of building equity and generating passive income. The great thing about investment property is that you can get returns on it, from any increase in value over time (capital gains) or from rental income.
Keen to learn a little more on hot property investment spots in NZ? Read on.
Things to look out for in investment properties.
If you are looking at a good investment property, buy in a region or an area where it looks like there is growth starting to happen or is underway. Think schools, shopping centres, and good transport, or places where the local council is involved for future growth. It’s helpful to look at any further development plans across the next 10 – 15 years, to help your property only increase in value over time. As New Zealand’s housing market is going through a strong growth phase, we suggest looking at what areas are near you with growing infrastructure and are suitable for your ideal tenants or demographics.
Best places for investment properties 2021.
According to the team at Money Empire, we have scouted and spotted a few hot spots around New Zealand.
Hamilton is a good property investment area purely with the new motorway from Auckland to Hamilton. This area has a lower housing price point than Auckland, allowing you to have high rental income, creating a strong yield. Just out of Hamilton is Pokeno, this area is starting to grow and offers the ability for employees to work remotely, yet still live in an area that is developing fast. Hamilton as a city is building momentum and value, so if you’re looking at investing here, get in before the surge begins!
2020 has shown many employers that working remotely is absolutely possible, shooting up demand for coastal properties. To no exception to this has Gisborne, home to beautiful beachfront properties and a relaxing lifestyle. While international travel is out of the question at the moment, the attraction of Gisborne’s easy-going lifestyle and appreciation of the outdoors is only attracting more residents.
If you are looking to brave the craziness in Auckland, think of the outer suburbs with smaller growth and a large upside, such as West and South Auckland. These places are being gentrified, and quickly too! Alongside the introduction and improvement of Auckland’s transport system, places in these areas will increase in value significantly. Some inner-city suburbs are a super high price point for the returns you get, but interest rates at the moment are low. Our podcast Beyond the Field has chatted through a few great places in Auckland that are still relatively low in housing prices. Give it a listen now.
As we said about Gisborne, people are relocating to areas that can offer a more fulfilling lifestyle that fits within their needs, without the added expense of crazy high house prices. This only means that people are moving to these areas to start getting the lie of the land. The demand for rental properties in this area is soaring, providing the perfect opportunity to jump on an investment property in these areas as they start to grow.
The bottom part of the South Island has crazy low housing prices at the moment, and is a hidden gem in the investment property market. The house prices here are rising at a much slower rate than the rest of the country, with rental yields at 6%+. Invercargill is a huge commercial hub for the dairy and agricultural industries, and the central city is in the midst of a $180 million redevelopment.
Investment Property Checklist
Choosing a good investment property needs to give you a good return, and help you reach your financial goals. It also depends on what your investment property strategy is: whether you hold and buy, or you flip. When looking for a rental property, think of the checklist:
- Location: Is it somewhere that your target demographic would be willing to live? Does it offer benefits of living there? Is it an all-year property or seasonal (such as ski or surf towns)?
- Development: What future developments are happening in this area? Is anything supported by the local council?
- Infrastructure: What is in place to support the growth of the town? How is shopping and transport? How far does someone need to go to find the closest available location?
Investment property is to offer you a long-term wealth building strategy, as well as some passive income. If you are considering investing in property, get in touch with one of our team today and let’s chat about what’s best for you.