Property Investment Management
Posted by David Thornton on
After months of steeply climbing property prices in Auckland the rate of increase has slowed down and the market is becoming attractive again to the more traditional residential investor. Quality housing is still outstripping supply and investment opportunities are opening up again.
There seems to be demand coming from investors new to the residential market and they need to establish some clear investment priorities when considering entering this market. Generally the choice will be between long term growth or rental return. Houses typically offer greater long term capital gain if chosen well, while apartments generally provide a higher yield for a lower purchase price – in other words, more rental return for the dollar.
New investments in residential property need to be held for at least two years to avoid being classified as trading with consequent tax implications.
Apartments are generally easier to manage and improve because exterior maintenance is handled through the body corporate for the whole building. Every apartment owner in a block is a member of the body corporate and it is important for intending purchasers to acquaint themselves fully with the Long Term Maintenance Plan for building, and check out the AGM notes for the previous three years.
Apartments will be either freehold or leasehold – the latter meaning rent will be payable on the land. While investors will have their own legal advisers it is wise to consult a reputable property management organisation for expert advice on the potential risks and gains of the investment.
Property managers have the necessary expertise to advise investors on rental returns, body corporate and leasehold arrangements, and can put you in touch with appropriate professionals such as valuers, brokers and real estate agents. The managers naturally take care of day-to-day matters, lettings, inspections and body corporate relationships.
With any property investment, location is the key. As Auckland’s population and visitor numbers grow, congestion also grows and proximity to public transport will be an important factor in both capital gain and strong rental potential.
The growth of Auckland into a truly international city is already witnessing high demand from overseas companies and individuals for quality rentals – and quality rentals demand quality property management.