New Calculator Shows Property Investors How Much Their Properties Really Cost

Saturday 12 October 2019, 2:52PM
By Opes Partners

New Zealanders love property and many dream of becoming property investors. However, many are unaware of the real costs of owning a rental property, says Opes Partners Managing Partner, Andrew Nicol.

Nicol sees renewed interest in property investment due to record low-interest rates, and the wealth that has been created by New Zealand's buoyant housing market.

According to REINZ data, the median house price in New Zealand has increased fro, $425,000 in June 2014 to $585,000 in June 2019. That means over 5 years, the average homeowner saw an additional $160,000 added to their net worth. 

According to Nicol's analysis, that wealth could be used to secure an investment property worth up to a maximum of $800,000+.

"While mum and dad investors generally have no trouble securing the deposit for an investment property, they usually trip up when it comes to cashflow", Nicol says. "Most investors, stop, sell early or don't hold their properties long enough to get the long term benefits of owning property."

That is why considering cashflow and rental yield is so important. If investors don't understand what it costs to hold a property, then they're less likely to do so. 

That is why Opes Partners has created a simple rental yield calculator to show prospective property investors what their properties will really make (or cost) them each week.

The calculator makes smart assumptions about what costs will actually be incurred by investors – as opposed to rosey assumptions that are sometimes made by novice investors.