Property Investment

Property is a popular investment option in New Zealand. It has one major advantage when compared to investing in other assets: it’s much easier to borrow to buy property.

Over time, property prices tend to increase. However, in the short term they can fall quite significantly. This means property investment requires a long horizon, and you should always be buying with long-term goals in mind.

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Commercial or residential property?

There are important differences between investing in residential rentals (renting a house to tenants) and commercial properties (leasing a retail, office or industrial building to a business).

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The advantages of residential property include:

- Wide range of property types to choose from, many at affordable prices.

- Ease of finding tenants.

- Relative ease of securing a mortgage.

The main downsides? Residential tenancies are typically much more time-consuming than commercial ones, and tenants can be higher maintenance.

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The advantages of commercial property include:

- Not needing to adhere to the Residential Tenancies Act or Healthy Homes legislation.

- Higher rents and yields, returns are usually much higher.

- Long-term tenancies.

On the downside, quality commercial property tends to be very expensive, and finding tenants can be a challenge.

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Being a landlord

Whatever type of property you choose, you’ll need to find good tenants, keep them happy, and maintain your property to a high standard. There are significant ongoing costs to property ownership, including regular maintenance and repairs.

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Talk to us about the tax implications

Whenever you invest in property, there are important tax considerations – including the bright line test, variations for new builds, and whether you need to pay GST when you purchase a property.

We can help you navigate your tax obligations, fine-tune your strategy, and work out the optimal structure for owning a property. We can also get your accounts sorted out if you’re applying for a loan. Just drop us a note or give us a call, we’d love to hear from you.