SearchLeverage strategies
Miriam asks:
(updated on Wednesday, April 17th 2019)
We are looking to purchase a property in Auckland. But we want to buy with a view to investment and we aren't sure of what strategy to take. Should we buy a more expensive, inner suburb family home and leverage off it as its value rises down the track? Or should we buy a cheaper family home further out and then buy a rental as well? What do you think would be the better strategy in the long term?
Our Experts Answer:
There are a number of factors to take into account. If your household income is strong then you may get better capital gain with the first option. However, if you are looking to build up a portfolio then the second option may work better as you will also obviously be receiving rental income.
From a leverage point of view (excluding Reserve Bank exemptions such as new builds and non-bank solutions) you will be able to gear yourself up higher by just buying a personal residence. That is rather than splitting leverage across a home and a rental property - unless you look potentially at a home and income type of set-up where you should be able to obtain 80% finance.
Most Read
| Unity First Home Buyer special | 3.99 |
| SBS FirstHome Combo | 3.99 |
| ICBC | 4.25 |
| Co-operative Bank - First Home Special | 4.35 |
| Co-operative Bank - Owner Occ | 4.45 |
| TSB Special | 4.49 |
| ANZ Special | 4.49 |
| ASB Bank | 4.49 |
| SBS Bank Special | 4.49 |
| Unity Special | 4.49 |
| Westpac Special | 4.49 |
| TSB Special | 4.00 |
| Kiwibank Special | 4.49 |
| Kainga Ora | 4.49 |
| Nelson Building Society | 4.59 |
| ICBC | 4.59 |
| Unity Special | 4.65 |
| SBS Bank Special | 4.69 |
| ANZ Special | 4.69 |
| BNZ - Std | 4.69 |
| Westpac Special | 4.75 |
| ASB Bank | 4.75 |
| ICBC | 4.99 |
| Kainga Ora | 5.15 |
| SBS Bank Special | 5.29 |
| Westpac Special | 5.29 |
| BNZ - Std | 5.29 |
| Kiwibank Special | 5.39 |
| TSB Special | 5.39 |
| ASB Bank | 5.45 |
| AIA - Go Home Loans | 5.45 |
| Co-operative Bank - Owner Occ | 5.49 |
| BNZ - Classic | 5.59 |
| SBS FirstHome Combo | 3.29 |
| AIA - Back My Build | 3.34 |
| SBS Construction lending for FHB | 3.74 |
| CFML 321 Loans | 3.95 |
| Co-operative Bank - Owner Occ | 4.99 |
| Co-operative Bank - Standard | 4.99 |
| Heartland Bank - Online | 5.30 |
| ICBC | 5.39 |
| Kiwibank - Offset | 5.65 |
| Kiwibank | 5.65 |
| Kainga Ora | 5.69 |
