SearchWorthwhile investment?
J asks:
(updated on Monday, January 11th 2016)
We have used the equity of our Auckland property to buy one rental in Hamilton East which is 4.98% net per year income. I think we are paying extra $2000 per year to cover rates. It is on an interest only mortgage with a bank.
The bank have given us another equity of around $200/250k for rental property number two. We are looking in Hamilton area again as we can't afford any Auckland property at all.
We have one child and we are both working full time. Our combined income is $115k gross.
Our questions are:
1. Is it worth buying rental property number two (price $200/250k)?
2. What are the pros/cons of buying rental number two?
Our Experts Answer:
In response to your questions:
1. This comes down to what you are trying to achieve. Also, you need to assess what, if any, cash flow burden this will put on the family.
2. The pros are that you should still get some growth in the Hamilton market with more investors getting locked out of Auckland due to the introduction of the 30% deposit requirements. A negative is that in the price range you are looking I expect your options will be reasonably limited. Probably mainly to two bedroom units. So you need to make sure that if you go down that path that you expect the property to meet your goals.
Most Read
| Unity First Home Buyer special | 3.99 |
| ICBC | 4.25 |
| SBS FirstHome Combo | 4.29 |
| Co-operative Bank - First Home Special | 4.35 |
| TSB Special | 4.39 |
| Co-operative Bank - Owner Occ | 4.45 |
| ASB Bank | 4.49 |
| SBS Bank Special | 4.49 |
| Unity Special | 4.49 |
| Westpac Special | 4.49 |
| Kiwibank Special | 4.49 |
| Westpac Special | 4.45 |
| SBS Bank Special | 4.49 |
| BNZ - Std | 4.49 |
| Kiwibank Special | 4.49 |
| TSB Special | 4.49 |
| AIA - Go Home Loans | 4.49 |
| ASB Bank | 4.49 |
| Co-operative Bank - Owner Occ | 4.49 |
| ICBC | 4.59 |
| Wairarapa Building Society | 4.59 |
| Unity Special | 4.65 |
| SBS Bank Special | 4.99 |
| Westpac Special | 4.99 |
| ICBC | 4.99 |
| BNZ - Std | 4.99 |
| AIA - Go Home Loans | 5.15 |
| ASB Bank | 5.15 |
| Co-operative Bank - Owner Occ | 5.19 |
| ANZ | 5.39 |
| TSB Special | 5.39 |
| Kiwibank Special | 5.39 |
| Kainga Ora | 5.49 |
| SBS FirstHome Combo | 3.29 |
| AIA - Back My Build | 3.34 |
| SBS Construction lending for FHB | 3.74 |
| CFML 321 Loans | 4.25 |
| 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 |
| ANZ | 5.69 |
