If you are pondering a property investment, here’s what you need to know to get started.
As well as being a solid, visible asset, an investment property can be a reasonably secure long-term investment.
However, as with any investment, it is important to weigh up the pros and cons to ensure investing in property is right for you.
Choose your property type. Which type of property should you invest in that suits your investment plans? Your options include residential houses, units or apartments and holiday homes.
Talk through your loan options. How do you want to structure your loan repayments? There are a whole range of options including interest only (up to five years), principal and interest, table or reducing, fixed versus floating, split loans (a combination of different loan types). We can help guide you through the different options and work out what is best for your circumstances. Find out more about investing in property.
Think like a tenant. Give some thought to what a prospective tenant might be looking for. For example: how close is the public transport? Where are the schools, parks and shops located?
Should you use a property manager? You’ll need to decide if you should manage the property yourself or use a property management company. Generally property managers will charge fees around 7-8 per cent of the rental income. Usually their services will include finding tenants and signing up rental agreements and bonds, property inspection and routine condition reports, attending to property maintenance issues, managing tenancies including rental collection and any disputes or evictions, and providing financial reporting market reports.
Insurance. Get the right type of insurance for your investment property; the good news is that it is tax deductible. Our Home insurance product provides cover for investment properties. Cover includes:
If you are becoming a landlord for the first time, the Department of Building and Housing has more information on their website including draft tenancy contracts, how to avoid tenancy problems and more.
Find out about taxes, what you can claim and what happens when you sell your investment property on the IRD website or speak to your accountant.
Want to find out more? Call us on 0800 100 600 to speak to an ASB Mobile Lending Manager, or visit our website to contact one closest to you.
Disclaimer: This article is intended to provide general information. It is not based on the financial situation or needs of individuals and must not be relied upon as financial product advice. Tax considerations are general and based on present tax laws and may be subject to change. You should seek independent, professional tax advice before making any decision based on this information