New Zealand real estate is often a challenging foe for investors. Well-researched strategies continue to yield long-term gains with the right approach. However, with higher initial costs and a stricter lending climate becoming the norm, property investors want to ensure they’re making the right choices for their situations.

Below we've outlined a few tried-and-true tips and tactics for New Zealand property investment. Use these guidelines to ensure you’re on the right track for your own prospective properties.

Location will always matter

When it come to property investment in New Zealand location is crucial. Your location will determine exactly how lucrative a property can be for your positive cash flow. Smart investors will always put a property’s location on the top of their list of considerations.

Factors which directly impact a location’s value potential include the following:

• Growth, renovation, and development trends in established neighbourhoods
• Positive value increase in nearby homes and properties
• Current and upcoming infrastructure
• Proximity to facilities, shops, schools, cafés, parks, and other amenities

How can you understand which location will yield the best returns for you? That’s where the next tip comes in especially handy.

Read more: Balancing rental yield vs. capital gain

Always complete your property value research

Like any financial undertaking, the final decision comes down to you. Accordingly, you need to do your due diligence prior to making that decision. The centerpiece of this due diligence is the time you put into research.

Research is essential to learn as much as you can about a particular investment property. Use these focal points to guide you:

• Median property prices in your area: The median property values provide an indicator of average selling prices in cities and areas across New Zealand. These values can give you a solid grounding on what to expect for asking prices, growth trends over the years, and other aspects that will ultimately affect your purchase decision.
  
  
• Property valuations:You can gain even more insight through a professional property valuation. Typically, you’ll see a few variants which include a government valuation (GV), a council valuation (CV), and a rateable value (RV). Please remember that these numbers should only be used as one of many factors in your property investment research. Oftentimes, a valuation may not give you a true indication of the current market value.
  
  
• Current selling prices: One of the best glimpse you can get into current real estate sale prices in New Zealand is to go directly to the source. Real estate agents are on the front lines of the property market. Consult with a few agents to see what the true selling price have been in your prospective buying area. 

Conduct a comprehensive risk assessment

No matter what type of investment you pursue, risk will always remain a critically important element. This holds particularly true for investment property as multiple factors can directly impact the return on investment (ROI) potential. 

Investors who don’t understand the risks are setting themselves up for failure.

Get the professional help you need to truly learn your risk factors. That way, you can use that data to determine whether or not a particular real estate sale is good for you.

Getting the most from your New Zealand property investment

No matter what strategy you follow, time and research must remain at the forefront of your considerations. Take the time to learn and understand as much as you can about the real estate area in which you’re interested in investing. And extend your research to as many possible sources to get the broadest understanding of its potential. All of this effort is ultimately what makes a good property investment vs. a bad one.

Are you on the journey to owning your first rental? Our guide for new and potential landlords can certainly help give you the best chance of success.