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Buying and renting out properties is a popular investment for New Zealanders, as property prices are generally increasing far more than previously, and banks are relatively willing to lend money.

If you manage to secure good tenants for your residential property investment, and the property market continues to rise, the returns can be very good – but bad tenants and rising interest rates are just two of the risks. As with any investment, the key is good research.

The Inland Revenue Department has recently clarified the tax position on investments in residential property, which may make the increase in the value of an investment property taxable when you come to sell it. If you have a history of regularly buying and selling properties, even your family home, you should check your tax position carefully. For more information see the booklet Buying and Selling Residential Property (IR313) on the IRD website.

Investing in commercial property generally requires a lot more equity than residential property investment, and interest rates are higher. Tenants usually stay for longer terms, but economic downturn can leave an office building vacant for long periods. With the increased risk comes the potential for higher returns, but again this type of investment requires extensive research.

At Broadbase International we can help you with finance and insurance for your property investment, and assist you in building a balanced investment portfolio. Please contact us for further details.