Six Steps to take before investing in property
Investing in your first rental property can feel exciting — and a little daunting. The best place to start is with a clear plan and the right support. Here are some key steps to help you feel confident before you take the plunge.
1. Define your why
Ask yourself: what do you want this investment to achieve?
- Long-term wealth – are you looking to build assets that grow in value over time?
- Passive income – do you want rent to cover costs and top up your income?
- Capital growth – are you aiming to buy in an area where property values are likely to rise?
Your goals will guide what kind of property you choose, and where to look.
2. Decide what kind of investor you’ll be
There’s more than one way to play the property game:
- Long-term holder – buy and rent out a property for steady income and long-term growth.
- Flipper – buy, renovate, and sell for profit.
- Developer – subdivide or build to create new value.
Think about whether cash flow now or capital gains later is more important to you. This will help you decide whether to choose a property that pays for itself, or one you’ll “top up” now in exchange for bigger gains in the future. Flipping can be higher risk with immediate rewards (if it works!), investing for the long-term can bring greater capital gains and is usually a less risky way to invest.
3. Do the maths
A good investment starts with good numbers.
- Review your savings, income, and debts.
- Check if you have enough equity in your current home or cash for a deposit.
- Talk to a mortgage adviser or bank to understand how much you can borrow.
- Factor in all the ongoing costs: mortgage repayments, insurance, rates, maintenance, and property management fees.
- Estimate your rental income. Tools like Tenancy.govt.nz’s Market Rent tool can show what similar homes rent for in your area – don't forget a new home could rent for more than other homes.
4. Learn the basics
The more you understand, the more confident you’ll feel.
A few great reads to get you started:
- The NZ Property Guide by Lisa Dudson
- The Barefoot Investor by Scott Pape
- NZ Real Estate Investors’ Secrets by Graeme Fowler
You can also explore our Property Investment Glossary — a plain-language guide to key terms and concepts every investor should know.
5. Build your team
No one invests alone. Having trusted experts around you makes all the difference:
- Accountant – helps structure your finances and tax effectively.
- Lawyer – checks contracts, titles, and compliance.
- Mortgage broker or banker – helps you secure the right lending for your situation.
- Real estate agent / sales consultant – can spot opportunities such as house and land packages or show homes that suit investors.
6. Research the market
Confidence comes from doing your homework. Take time to:
- Compare suburbs and regions for rental demand, yields, and growth potential.
- Explore the NZ Property Investors Federation for useful data and insights – their magazine has data for rental yields and capital gains, suburb-by-suburb.
- Check sales data on sites such as REINZ, Homes.co.nz (free sales data) or ask your real estate agent for up-to-date information.
- Use TradeMe Property to see how many rentals are listed and assess the level of competition in the market.
- Tools like Tenancy.govt.nz’s Market Rent tool can show what similar homes rent for in your area.
Remember: past performance isn’t a guarantee of the future, but it’s a good guide to spotting potential.
Get in touch, we’re here to answer your questions and can introduce you to the right people.
