Buying for capital gain
Question from Jo updated on 19th July 2017:
Is it a good idea to sell my current rental property, which has good rental yield, to buy an Auckland apartment for capital gain? Or should I keep my rental property and borrow more from the bank?
Our expert Kris Pedersen responded:
It depends on which option is best for your situation and I don't have enough information to make too much comment here. However, I suggest that you be careful.
This is because a large amount of Auckland apartments are now being built and because the Auckland market has been experiencing large growth for some time, capital growth is by no means guaranteed.
Another consideration is the location of your existing property. This is because if it is in a reasonable location and has land you may still experience growth over time with it.
Kris Pedersen of Kris Pedersen Mortgages is a commentator on property and finance. His team sources top finance strategies. www.krispedersen.co.nz