Bricks & Mortar has through the generations been a popular option for investment and generating wealth.
The main difficulty for most is stumping up with enough equity (deposit) to secure finance in order to purchase.
How Property Investing Can Rapidly Increase Investors' Wealth
The basic method of building wealth using the property market is to borrow money to buy a house, have someone else (the tenants) pay the interest, and pocket the capital gain. Most banks in New Zealand & Australia are happy to provide mortgages to buy investment properties.
For example, you could buy a $300,000 house using $30,000 of your own money and $270,000 of borrowed money. If the house value increases to $350,000, your initial investment of $30,000 will have grown to a value of $80,000 - an attractive gain. The gain is all the more attractive in New Zealand because it is not taxable.
The trick really is to have hassle free tennants. Depending upon how hands on you are comfortable with engaging a property manager to free yourself of any burden is an option.
Note that the recent NZ budget has halted some tax advantages such as claiming depreciation on your investment dwelling and improvements. Running costs such as repairs, maintenance and property management costs are all still tax deductable expenses.
QuikRiches cannot get too indepth on this topic as owning an investment proprty is significantly different with conflicting advantages and disadvantages either side of the Tasman. However, there are many reference websites which make fascinating reading regarding property investment, and certainly very helpful and relevent to an individuals personal circumstances. Make use of the featured links.
