With the Tauranga property market doing so well over the last few years, more people are interested in getting into property investment. Of course, property investment is not something to consider lightly and is not always smooth sailing for Landlords. There are some key things you should consider when buying an investment property and to help you on your journey here are four questions you should think about:
1. What are you trying to achieve?
Is it money? Is it wealth? For most people, the answer is financial freedom. The actual bricks and mortar of your property probably isn’t your end goal. Rather, it’s the vehicle to get you to where you want to be. Therefore, treat property investment as a journey, and don’t get lost along the way.
2. What strategy are you going to use to get you there?
For some investors, their preferred strategy is high growth properties. For others, it is a consistent cash flow. If you are in the first camp, you need to look for properties priced below their intrinsic values in areas that are going to perform well in the long term. Look for something that is a bit unique, a bit different or special, and add value. Look for a property that’s going to be in strong demand by owner-occupiers rather than just tenants.
If cash flow is your main driver then consider investing in either established or growth suburbs. Buy property that is near schools and shops, is easy to maintain and will be easy to rent out.
3. What can you afford?
We recommend visiting a proficient finance strategist, either your bank or a professional financial advisor or accountant who understands how to set your finances correctly. Also, always get your loan pre-approved, because that is going to be one of the factors that affect where you buy and the sort of property you can buy.
Before you purchase your property, talk to our team for a free market appraisal of the property to make sure you are realistic about what you will achieve.
4. Who do you ask for advice?
As stated above, you should always talk to your bank and accountant for professional advice about your finances/costs. We also recommend using a good lawyer to get the right ownership structures, the right entities etc.
Next, you should speak to a certified Property Manager for independent property advice. This can help protect you from investing in the wrong type of property or paying too much for an investment property.
If you are thinking of purchasing an investment property in Tauranga, give Chris a call. Chris has many years of real estate and property management experience and will give you the best advice for your property investing goals.