First investment property
Question from mark ashcroft updated on 7th March 2022:
Hi there,1st time investor. I have just got pre approved for$ 840,000 for my 1st investment property. I am using equity in my existing home.
I am looking for my best place/ area/ city to buy a new build .
cash positive? or with a good rental return and market, I'm looking at new builds as I'm aware tax wise il have less to pay at the end of the tax year.
Our expert Kris Pedersen responded:
There are many factors to take into consideration when looking at where and what you should purchase.
We have noted many new investors heading towards new builds recently as they are generally purchasing properties which are compliant already plus the tax benefits you have already mentioned. Smaller regions often have better cashflow, however you may not experience the same gains over time that you do in the larger cities. Often on paper lower socio-economic areas may achieve greater returns as well but you may experience higher vacancy levels and costs which can adversely affect your actual net return.
I have noted recently a number of investors who are keeping an eye on the Christchurch market and there are numerous comments about it being undervalued at present. If you decide to go down this route make sure you do decent due diligence on this though.
Kris Pedersen of Kris Pedersen Mortgages is a commentator on property and finance. His team sources top finance strategies. www.krispedersen.co.nz
