Why invest in Property?
There are plenty of opportunities and places to invest the money you earn.
Most financial experts or advisors will agree that property investment should play a part in any investment portfolio. In fact, property remains the most common form of investment for New Zealanders and there are plenty of reasons why.
Aside from property ownership being in the DNA of us kiwis, the benefits are wide and varied – including wealth creation through long term gains, passive income through rent and ongoing financial security.
Long term gains
The most stand-out feature of property investment is wealth creation through long term capital gain or “appreciation”. Historically, data shows property values double every 10-12 years.
As you pay down your mortgage, you will build equity on your property – the golden ticket in building a property investment portfolio.
Predictable cash flow
Your property investment will be earning you money in the form of rental income.
There aren’t many other forms of investment that provide a predictable cash flow, so for many investors this is a big draw card. New Zealand needs more rental properties, and the number of households renting is increasing each year.
If you choose to use a property manager for your investment property, you could say this investment is largely ‘set and forget’.
The power of equity
Equity is the difference between the market value of your property and the amount you owe on your home loan. In other words, it is how much of your home you actually ‘own’.
It’s a common misconception that you need a cash deposit for your property investment. Property investment is one of the very few ways in which you can use the bank’s money to leverage or “borrow against”, in order to access more funds for a deposit (or other reasons), by using the equity built on your own property.
You’re in control
There are plenty of investment opportunities where you don’t have full control. In many other investment spaces, other people make decisions on your behalf and for your money. That’s not the case in property investing. Your property investment is a tangible asset. If you wish to do so, you can easily add value to your property with renovations, set the rental price where you want it etc.
The time is now
When is the best time to invest in real estate? Experts would suggest that was 10 years ago. However, the second-best time is now. If you’re thinking about investing in property, we suggest doing your research and getting some expert advice. Understanding the process can seem complex and the commitment can seem significant, but so too are the benefits.
Want to know more about the possibility of investing in property? Get in touch with one of the Staircase team, they’d love to talk you through the ins and outs!