Pointers for cash investment

Our Experts Answer:

Firstly with your current property I would recommend either restructuring the mortgage as a revolving credit and putting your cash in there to save on interest costs or you could use an offset facility instead. In regards to how many properties you should buy it isn't the number that matters but what you are trying to achieve from them. Note that the number of properties is quite irrelevant as someone may own 10 properties in a small town yet still have a lower overall asset base than someone with a waterfront Auckland property for example. You state that capital growth is more important than cashflow so ideally you want to stay away from the smaller towns and focus on the cities (not withstanding the earthquake risks at the moment) but keep in mind if you are starting a new business you may have periods where your cashflow is tight so you need to be careful about putting more pressure on with a negatively geared portfolio. Potentially look to lock rates in as well so you have some certainty around your payments