5 Property Investment Myths New Zealanders Still Believe
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Property investment comes with its fair share of received wisdom that's outdated or simply untrue. Here's the reality behind five of the most common myths still doing the rounds.
This is general information, not financial advice. Every situation is different, talk to us, or a financial adviser, about what applies to you.
Myth 1: "You need a 30% deposit to get started"
True for existing properties, banks generally require a 30% deposit there. New builds are exempt from that rule, so investors can often get started with just 10%, at the bank's discretion. On a $650,000 property, that's roughly $65,000 instead of $195,000, and it doesn't have to be cash, usable equity in a property you already own can cover it.
Myth 2: "Property investment is only for the wealthy"
The deposit gap in Myth 1 points to a different reality: the real barrier is usable equity and borrowing capacity, not cash wealth. Investors typically grow a portfolio using equity in an existing property plus what the bank will lend against it, not by saving fresh lump sums each time. That's a question of leverage and structure, not personal wealth.
Myth 3: "You should wait for the market to drop"
Timing the market perfectly is notoriously difficult, even for professionals, a well chosen property held long term matters more than the exact timing. Case in point: nationwide prices rose about 31% in the year to August 2021. Buyers who held out for a pullback watched growth cool to around 4% by May 2022, but prices were still well above where they'd started waiting. Time in the market has consistently mattered more than timing it.
Myth 4: "Any property is a good investment property"
Location, tenant demand, ongoing costs, and growth potential vary hugely between properties, some will underperform even in a rising market. The best investment property is usually one you have no emotional attachment to, chosen on the numbers rather than whether you'd want to live there yourself.
Myth 5: "Being a landlord means constant hassle"
With the right property management in place, most day to day issues are handled without the owner's involvement. Where hassle does show up, it's usually the wrong property or the wrong management, not property investment itself. Wolfbrook Property Management handles long term rentals end to end, and Hosted by Wolfbrook covers short term or Airbnb style letting.
Talk to our investment specialists today
Got a question about your own numbers, or want a second opinion before you make a call? Get in touch with the team today.
