Why New Builds Make the Best Rental Properties
25 MAY 2021 | IN PROPERTY | JEFF ELIAS, DIRECTOR/SPECIALIST FINANCIAL ADVISOR
For several years now I have been encouraging Futurebound clients to consider building wealth as part of their retirement plan through new build rental properties.
Firstly, let's just consider why you even need to create a plan, after all, you’re probably in a two-income household and doing really well right? The problem is that you’re not always going to be in a two-income household. In fact, it’s just a matter of time before you're in a zero income household as that’s what retirement means…no more jobs.
The problem that you’re trying to solve is a future problem, not a current one. Investing now is important as while it won’t change your life much currently, it will change your life significantly in the future. This means making some decisions now to get a result later because there is a consequence in doing nothing.
New build reasons:
If you own a house already, in most situations, the bank will lend you 100% of the purchase price and your tenant will likely cover 100% of the costs (mortgage repayments, rates, insurance and a property manager). It’s as close as you’re going to get to a free house, so what’s not to like?
Many Kiwi’s still think of New Zealand as a country of 3.5-4 million. But we’re now a country of 5 million and it’s a matter of time before we get to 7 million and then 10 million inhabitants. Geographically, we’re similar in size to Japan or England and look at how much bigger their populations are compared to ours. We are underpopulated and yes, there is room for us to have a lot more people living in this country and yes, I believe that it is just a matter of time. All these people need houses to live in and they need to be built. This is where you come in.
One day, in your retirement, you will be able to earn an income off your rental property or you’ll be able to sell it and put a bunch of coin in your pocket. It will transform your retirement.
If this has opened your eyes to some possibilities, then book a 15 minute mortgage chat to start your journey to a more prosperous retirement.