Property investment guide
How to buy an
investment property in NZ
RS
Remy Sandoy
Investment Finance Advisor
Reviewed by: [TBC]
General information, not financial advice
On this page
Buying an investment property in NZ comes down to three things: a deposit, a bank that will lend the rest, and income to cover the costs.
Deposit. On a qualifying new build, banks often look for around 20%, because new builds are exempt from the Reserve Bank’s investor lending limits. On an existing property, it’s usually around 30%. If you already own a home, the deposit can come from the equity in your home rather than savings.
Lending. The bank tests your income against all your debt, including your home loan, at a higher interest rate than you’d actually pay.
Costs. If the rent doesn’t cover the mortgage, rates, insurance and maintenance, the gap comes from your income.
Here’s how to buy an investment property in NZ, step by step:
1
Check whether the numbers work. A bank tests your deposit, income and total debt.
2
Work out your usable equity. The bank values your home and sets how much it will lend against it.
3
Get pre-approval. A lender agrees in principle how much it will lend.
4
Choose the right property. Location, rental demand, running costs, and new build or existing.
5
Decide whose name it goes in. Personal, joint, trust or company.
6
Make an offer and do your due diligence. Check the property before you’re committed.
7
Settle, then set up for tax. The property becomes yours, and the rental joins your tax return.
For the bigger picture, see our guide to property investment in NZ