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Strategies for new investors

Whether you want to dip your toe into the market or jump right in, it pays to find out all about the top strategies for new investors.

Monday, January 21st 2019, 10:35AM

by The Landlord

It’s a challenging market for investors wanting to get their foot on the property ladder for the first time – but it’s not impossible.

Because if you can save, beg, borrow or steal the 30% minimum deposit to secure your first deal, and you buy well, then you’ll automatically have the leverage you need to grow your portfolio further.

That’s the beauty of investing in property.

But knowing which property will be your best bet can be a daunting choice, and fear of getting it wrong can lead to “paralysis by analysis”.

In this month’s issue of NZ Property Investor magazine, we talked to the experts, as well as an investor who has gone from zero to owning a portfolio of properties, to find out the strategies they use for investment success.

First up, it’s important to think cash flow positive.

That’s because when the market has become unaffordable and the prospect of capital gains has diminished, cash flow is the yardstick needed to measure a prospective buy against.

What you’re looking for here, says Property Investor Centre’s Shane Allen, is a property that is cash flow positive, meaning that at the end of each week you’re making money, rather than losing it.

But the problem with this buying criteria is that in many markets, standalone properties that cover the bills just simply don’t exist. Allen says this is where new investors need to think outside the box.

“It’s all about cash flow and yield so we like properties that have two houses on one title, or home and income – we also like blocks of flats.”

It’s something that new investors don’t often consider, but buying multiple-income, or property that can be developed to become multiple-income can be a good way to both cover the bills and achieve a cash flow surplus that will increase your servicing ability for your next deal.

The downside to multiple-income? “Traditionally standalone houses will be more popular with tenants and give you more capital gain, but positive cash flow is a fundamental strategy that just keeps [giving],” says Allen.

To find out more about strategies for new investors, click here to get the digital issue of NZ Property Investor magazine.

Subscribe to NZ Property Investor magazine here to get great stories like this delivered to your mailbox every month.

 

Tags: cash flow house prices housing market investment property investment strategies

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Lender Flt 1yr 2yr 3yr
AIA - Back My Build 6.19 - - -
AIA - Go Home Loans 8.74 7.14 6.75 6.39
ANZ 8.64 7.74 7.39 7.25
ANZ Blueprint to Build 7.39 - - -
ANZ Good Energy - - - 1.00
ANZ Special - 7.14 6.79 6.65
ASB Bank 8.64 7.14 6.75 6.39
ASB Better Homes Top Up - - - 1.00
Avanti Finance 9.15 - - -
Basecorp Finance 9.60 - - -
Bluestone 9.24 - - -
Lender Flt 1yr 2yr 3yr
BNZ - Classic - 7.14 6.79 6.65
BNZ - Green Home Loan top-ups - - - 1.00
BNZ - Mortgage One 8.69 - - -
BNZ - Rapid Repay 8.69 - - -
BNZ - Std, FlyBuys 8.69 7.74 7.39 7.25
BNZ - TotalMoney 8.69 - - -
CFML Loans 9.45 - - -
China Construction Bank - 7.09 6.75 6.49
China Construction Bank Special - - - -
Co-operative Bank - First Home Special - 6.79 - -
Co-operative Bank - Owner Occ 8.40 6.99 6.79 6.65
Lender Flt 1yr 2yr 3yr
Co-operative Bank - Standard 8.40 7.49 7.29 7.15
Credit Union Auckland 7.70 - - -
First Credit Union Special - 7.45 7.35 -
First Credit Union Standard 8.50 7.99 7.85 -
Heartland Bank - Online 7.99 6.89 6.55 6.35
Heartland Bank - Reverse Mortgage - - - -
Heretaunga Building Society 8.90 7.60 7.40 -
HSBC Premier 8.59 - - -
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
ICBC 7.85 7.05 6.69 6.59
Lender Flt 1yr 2yr 3yr
Kainga Ora 8.64 7.74 7.35 6.99
Kainga Ora - First Home Buyer Special - - - -
Kiwibank 8.50 7.99 7.79 7.55
Kiwibank - Offset 8.50 - - -
Kiwibank Special - 6.99 6.79 6.65
Liberty 8.59 8.69 8.79 8.94
Nelson Building Society 9.00 7.65 7.25 -
Pepper Money Advantage 10.49 - - -
Pepper Money Easy 8.69 - - -
Pepper Money Essential 8.29 - - -
Resimac - LVR < 80% 8.84 8.09 7.59 7.29
Lender Flt 1yr 2yr 3yr
Resimac - LVR < 90% 9.84 9.09 8.59 8.29
Resimac - Specialist Clear (Alt Doc) - - 8.99 -
Resimac - Specialist Clear (Full Doc) - - 9.49 -
SBS Bank 8.74 7.74 ▼7.09 ▲6.95
SBS Bank Special - 7.14 ▼6.49 ▲6.35
SBS Construction lending for FHB - - - -
SBS FirstHome Combo 6.19 6.14 - -
SBS FirstHome Combo - - - -
SBS Unwind reverse equity 9.95 - - -
Select Home Loans 9.24 - - -
TSB Bank 9.44 7.79 7.55 7.45
Lender Flt 1yr 2yr 3yr
TSB Special 8.64 6.99 6.75 6.65
Unity 8.64 6.99 6.79 -
Unity First Home Buyer special - 6.55 6.45 -
Wairarapa Building Society 8.60 6.95 6.85 -
Westpac 8.64 7.84 7.35 6.99
Westpac Choices Everyday 8.74 - - -
Westpac Offset 8.64 - - -
Westpac Special - 7.24 6.75 6.39
Median 8.64 7.19 7.17 6.65

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