Property Investing for Beginners

At the first thing you learn is that you need know the market. Do your research and become an expert on the geographical area that you are going to work in.

Spend time researching, reading, talking to people in the know and physically checking out the area of choice. Do not cast your net too wide, pick one or two suburbs and get to work.

To many people property investment NZ seems simple, but being a successful property investor is more complicated than you might think, so here are some basics that you should consider.

The Basics

  • Learn about the property market– Knowledge is power and really does hold the key to making the right decisions.
  • Set your investment goals– Short term and long term goals need to be clear in your mind – setting goals and looking at them constantly will motivate you and keep you on track.
  • Know the risks – It is important to know the risks involved before investing in property. Clearly property is an investment that has stood the test of time and as a tangible asset – it will almost never lose its value completely – especially for the long term.
  • Positive cash flow properties – While property experts believe that negative gearing with its tax benefits is a better route to investing in property, it is actually positive cash flow properties that are a safer bet since the net inflow is more than the outflow.
  • Buy properties at discounts – While stocks can be purchased for a premium, the best way to invest in property is to buy at a discount. Always keeping in mind that you are not buying the property for you – it is all about yield, so always look for a bargain and start low.
  • Location, Location, Location – Depending if you are investing on a buy and hold or buy and sell strategy, you need to know your market and your location. Rental areas for the buy and hold and close to schools and shops for the first time buyer markets.
  • Flexibility – Mortgage plans that are flexible more often provide the option of advance payments and can mean you gain more yield if interest rates drop.

Often getting the right advice can be tricky – using a mentor can be a great option for new investors.

For further reading on Property Investment NZ, click on the articles below:

Setting Goals for Financial Independence – click here

Tips for Becoming a Property Expert – click here

Buying Rules for Property Investment – click here

5 Tips to Add Value through Renovation – click here

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