Investment property refers to any real estate property purchased with the intention of earning a return on the investment through rental income, making a capital gain when selling the property in the future, or both. Investment properties are not purchased to be used as a primary residence, and lenders use a different set of criteria when assessing loan eligibility when compared to owner-occupied properties.
Returns from investment property generally come in two main forms.
The first is rental income, which is the rent paid by tenants living in the property. It’s important to note that in the early stages of ownership, rental income may not always generate a profit once expenses such as mortgage repayments, insurance, rates, and maintenance are taken into account.
The second form of return is capital growth, which is the increase in the property’s value over time. This is realised when the property is sold for more than it was purchased for.
In New Zealand, tax may apply under the Bright-line test if you sell a residential investment property within 2 years of purchase. Because tax settings can change and individual circumstances vary, it’s important to speak with your accountant for advice specific to your situation.
Property is one of the most common forms of investment in New Zealand and can be a great way of generating long-term wealth. With the number of people renting in New Zealand increasing each year, the need for privately owned rental properties is forecasted to keep is expanding in the years to come.
There’s a lot to understand about selecting loans for investment properties, and it is often more difficult to borrow money for a rental property than for an owner-occupied home due to differing loan to value ratio rules. When applying for any home loan, lenders will also want to be certain that you can repay what you’re borrowing for investment property.
With our decades of experience and long-standing relationships with lenders across New Zealand, our advisors will help you find the right investment loan to start you on your property investment journey, so get in touch with one of our professional advisors today.
If you’ve had a taste of investment property success and are keen for more, it’s time to consider what loans could help you acquire those next properties. Whether you’re wanting to buy additional property as a long-term investment, or only want to hold onto a rental for a short while, our advisors can help you understand and navigate the process of financing multiple properties. If you’d like to know more about how you could start expanding your investment property portfolio, you can contact one of our expert advisors here.
Does your business need a new office, factory, shop front or other asset? We can help you access the lending you need at a rate that’ll keep you growing, see more here.
Since 2014, our team has been helping Kiwis navigate the home loan process with confidence. Together, we bring over 150 years of combined experience across the financial industry, along with a deep understanding of New Zealand’s ever-changing lending landscape.
We take pride in building long-term relationships through honest, down-to-earth advice, focusing on home loan solutions that are tailored to your needs. Whether you’re buying your first home, next home, or investing, we’re here to guide you every step of the way.
To arrange a free, no-obligation chat about your home loan needs, get in touch with one of our Auckland-based Mortgage Advisors today.
Our professional advisors have established relationships with over 20 of New Zealand’s leading home loan lenders. These relationships allow us the flexibility to choose from a wide range of home loan options for investment properties that combine competitive rates and terms that best suit your property investment goals.
New Zealand has a growing need for private rental properties due to an increase in renters and has seen strong property value growth throughout most of the country over the previous decade. This means that investors consider New Zealand a good country to invest in property.
If you want to buy an investment property in New Zealand, you’ll typically require at least a 40% deposit. This can vary and in some circumstances, you may be able to utilise a smaller deposit, while in others, a larger deposit may be required.
Whether you’re looking for expert mortgage advice to get you into your first home, or you’re upgrading, refinancing or looking for an investment property, our experienced team can help find the right solution for you.
