Congratulations! You’re on the property ladder. But owning your own home is becoming less and less likely for many New Zealanders. So you are one of the lucky ones. However the reality is that you may also have a mortgage on your home – which, unfortunately, may still be there when you retire.
Paying off a mortgage principle and interest can severely impact on your financial security and your peace of mind! So, for many who are also raising families the options are limited to be able to enjoy the ‘extras’ in life, let alone plan for the future.
So what are the options?
For most New Zealanders the cost of day to day living prohibits the ability to save any significant amount. The only form of currency that could be available is the equity built up in the family home.
That’s why for most New Zealanders investing in property is the only option to pay off their home mortgage faster and to enjoy an extra income when they retire.
Why invest in property?
The main advantage of investing in property is leverage, which is the ability to make returns on someone else’s money (usually the banks). In some cases, you get to borrow 100% of the purchase price, but also keep 100% of the gains.
Banks in New Zealand have long supported residential investment. Unlike most other forms of investment, banks are prepared to fund the purchase of property up to 100% of its value depending on the investor, their overall position and the amount of equity available in their home to guarantee the deposit portion of the investment.
Property provides both cashflow (rental income) and asset appreciation (capital growth).
Both of these incomes are typically inflation adjusted, making residential investment property an excellent source of retirement income since you are not eroding your asset each year with withdrawals.
Despite what you read in the newspapers, as a long-term investment (7 to 10+ years), property has very consistent and predictable returns.
The right property is also a passive investment which means you don’t need to worry about it throughout its life.
The key is to ensure you have the right property and the right financial structures in place. That means the right financial and legal professionals, the right property managers and the right team of respected and experienced property coaches and mentors to bring it all together for you.
Let Propellor Property Investments do all this for you. We can help you learn how to invest in property and build a property investment portfolio. Give us a call or visit our contact page to get in touch with a representative today.