Residential property investment in New Zealand, especially real estate in Auckland, is one of the most popular ways to diversify an investor’s portfolio. Property investment may come easy for veterans but the steep initial costs can be intimidating for beginners. Regardless, learning more about this investment option will be rewarding.
Learn more about the major, long-term advantages of buying and owning properties in the residential market.
Why Real Estate is a Great Way to Start Your Investment Portfolio
Aside from the tax breaks, real estate owners enjoy several benefits, including monthly rental earnings, passive income, and equity from appreciation. We’ll talk more about each of these long-term advantages in the sections below.
1. Real estate provides a stable monthly income.
Buying real estate for rental properties gives you a convenient way to secure a stable cash flow that is safe from the brunt of inflation. Whether you’re investing in a turnkey single-family home or a multi-residential building, you get the benefit of enjoying steady monthly earnings.
Even if you have no experience managing a rental property, this option doesn’t have to be overwhelming. With the help of a local property manager, you’ll have the peace of mind that your property maintenance is in good hands.
2. Homes have the potential for higher equity in the future.
Real estate properties are among the most valuable assets investors can own, not just in New Zealand but around the world. This owes to consistent trends for housing value appreciation and higher equity.
The stable housing price growth has made buying houses for sale an attractive financial decision for many investors because of the confidence that they’ll reap bigger rewards in the future.
Property owners are entitled to tax breaks.
Investors who own, operate, and manage a real estate property can take advantage of the different tax deductions and tax breaks that will help them save money in the long run. One example of this is how the government allows investors to deduct their losses from their taxable income if their assessable rental income is less than their overall expenses.
Investing in real estate helps you have complete control of your asset
Beginner investors are often prone to investment scams, especially since most of these opportunities require putting their money into someone else’s hands. Although many legitimate institutions can help you manage your assets, full control of your property will help you understand the essentials of investing until you’re ready to expand and diversify your portfolio.
Additionally, real estate investors can choose any location and invest whenever and wherever they want. If you’re planning to invest in real estate in Christchurch, for instance, you can easily find residential property developers that can give the best deals in the market. More importantly, having the freedom to choose your location and the type of property you want will help you make decisions that are in line with your long-term financial goals.
