Property investment in New Zealand is still one of the most popular choices of investment for most Kiwi’s however is Property really right for you?
Unfortunately the following scenario is nearly 100% accurate, ask a real estate salesperson that question and they will say yes 100% of the time, ask a person who sells cash investments and they will say no, ask a mortgage broker and they will say yes, ask an investment adviser who sells managed funds and they will say no, ask an investment adviser who sells property and they will say yes… getting confused? Of course if you notice in each instance the person saying yes or no has a vested interest in whether of not you buy property and more importantly whether or not they might buy something of them.
If the person you are talking to sells property or a property related product (like mortgages) then the liklihood of them recommending you buy property (especially the ones they have listed) increase by about 100% and if they sell a different type of investment such as bonds, shares or managed funds then the chances of them saying no will increase to about 100%.
So what do you do? Who do you listen too? How do you decide if property is right for you? It’s easy, find someone who either sells all of the above products or none of them, in other words they sell bonds, cash investments, shares, property, managed funds and kiwi saver so that it doesn’t actually matter to them what you invest in as they will get paid anyway or they sell none of them so once again they are not influenced by what you buy.
Of course this is a little bit easier said than done, after all most of these industries require a level of expertise and experience for someone to operate within them and in some cases maybe even licenses (real estate for example) so finding someone who doesn’t sell any of the above is probably the easier of the two.
If you are talking to someone who does not sell any of the above then you will probably be talking to a planner, someone who will create a financial strategy for you that you can then take to the folks who actually sell the stuff.
Property is a great investment when appropriate but the other issue you also face is what type of property, is an apartment right for you, a house, a unit or a townhouse? Which location is right for you? Auckland? Hamilton? Tauranga? Wellington? Christ Church or perhaps one of the small towns?
There is a lot to factor into your equations when deciding if property is right for you and I believe it shouldn’t be a decision you make without some form of guidance.