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Over recent years, many areas of New Zealand real estate have experienced significant increases in value, though unfortunately for property investors, rental incomes have not experienced the same growth rates. Additionally, most commentators agree that returns from New Zealand property over the next 10 or so years will not be the same as the last 10 or so years. This means that seeking advice from an expert, preferably an financial adviser, regarding affordability is a must.
As property investment is such an interesting subject, many of your friends, relatives, and colleagues will readily share their own tips on property as an investment. When given such advice, proceed with caution, as although many of these people may mean well and are often successful property investors themselves, this is no guarantee of future success in the continually developing property market. This is where Become Wealth’s financial advisers can provide professional advice based on economic fundamentals, helping you remove emotion from the situation and focus on what you want to achieve.
Owing to years of growth in residential property, the capital gain from real estate has been a great way for many Kiwis to build wealth for retirement. As rental income in relation to property value is now typically quite low in the main centres of New Zealand, it can be tough to live off the rent after all expenses are paid.
Therefore, if you’re aiming to retire with a robust passive income flow, calculating the investment yield on each property is crucial to understanding the current or future income that will be provided. In many cases, on reaching retirement, many of our clients decide to sell some or all of their property portfolio and invest the proceeds in a more diversified portfolio which can better provide their retirement income.