by Nick Gentle on
Article appears under: About Property Investment, Due Diligence, Investment Strategy, The Numbers, Your Power Team

Introduction

It’s confusing to be a brand new property investor in New Zealand today. The good news is that it has always been overwhelming to start, yet plenty of people still do very well. 

I remember being lost when I started in 2008, and just about everybody who makes a start in property investment soon realises there are a lot of things to understand all at once in order to make a good decision. There is a lot at we've seen go wrong across actual NZ investment purchases, so here's the minimum we believe you should take on board, or get help with, to achieve predictable success. 

This article is a long one, and it’s still not going to tell you:

  1. how to uncover the deal of the century
  2. where the single best place to buy in New Zealand is today
  3. whether you should use a trust or a company
  4. whether to go interest-only or P&I

All of that falls into the deal-by-deal basket that you can figure out as you go. There’s plenty of material on our website, in our course, and loads of experts out there who’ll give you great advice for your own situation.

As you work through a well-thought-out sequence of preparing to buy, building a team, buying, and owning, a lot of your questions will be answered. This article gives you that sequence.

I wrote it as a mini-framework. If you follow the steps, you can move forward with confidence that you’re not missing any “why didn’t I think of that” gotchas, which could otherwise rise like an iceberg from the depths and sink your portfolio dreams later.

What’s Covered in This Article

Who is this for

This article is for people who’ve already decided to invest in property and want to know how. I’m not going to make the case for property over shares or anything else. That’s financial advice, and if you’re putting a wider financial plan in place, go and see a fee-paid financial adviser.

So we’re on the same page, here’s who I’m writing for:

  • You’re buying and holding. Trading and developing are completely different strategies, different businesses, with different tax and structure considerations. I can’t cover both in one article without doubling the length and adding a whole lot of “if you’re doing this then X, otherwise Y” carve-outs.
  • You’re investing for the long haul. Think 10 to 20 years, not 10 to 20 months. Almost every piece of advice below changes if you’re looking for a quick result.
  • You have a deposit, or equity you can borrow against. You don’t need to know exactly how much yet (that’s Step One), but you need something to work with.
  • You’re buying residential property in New Zealand. Commercial is a different animal, and so is buying offshore.
  • You’re not expecting a shortcut. There isn’t one. There is a sequence, though, and doing it in order saves you money.

I’ll give some detail on each area, and I’ll also refer you a lot to the video and audio property course I’ve published. Most topics here have a 15 to 30 minute video where I go into a lot more detail.

If you’re after the book version, there have been many popular “how to invest in property” books published over the years. Property 101 is probably the one I’d recommend today.

If you’re starting today, do these three things to get a good foundation:

  • read this article
  • watch or listen to the course material
  • pop along to your local Property Investors’ Association and meet some people

Do those and you’ll be ready to put a team together, make plans, ask the right questions, and execute as a property investor.

Let’s begin.

Why invest in property at all?

To me, the main reason to invest in property is leverage. Leverage is using other people’s time (OPT) and other people’s money (OPM) to get an outcome that you own the benefit of. It multiplies the outcome you could expect otherwise.


When done well, leverage benefits you. When it moves against you, it doesn’t. So everything from here on in can be summarised as “learn to use leverage well so it benefits you, and avoid getting into situations where it doesn’t.” Simple, no?

Other People’s Money (OPM)

The first part of using other people’s money is borrowing from the bank to buy a property. That’s 70% or 80%, depending on your deposit requirement, and as much as 100% if you borrow against equity in your own home.

If you have a lot of equity in your home and you’re borrowing against it, you may be using 100% of the bank’s money to buy the investment property.

You can’t do that with many other assets as a retail investor, so it’s a big advantage of real estate: banks will lend on property.

The second aspect of other people’s money is that you earn rental income from the asset. So when a property deal is done well, OPM buys it initially, and OPM pays for it.

The Risk With OPM

Leverage is a double-edged sword. It magnifies outcomes, and it’s your job to make sure it’s a positive outcome being magnified, because it can just as easily multiply the downside.

Here is a simple example that, looking just at value & equity and ignoring cashflow for a moment, shows how the use of OPM can dramatically magnify your own gains and losses. 


Of course, when you invest you should make a long-term bet of 10-20 years and focfocususing on cashflow paying down your debt for you, which if you get right makes short term fluctuations in value easy to ignore. 

Other People’s Time (OPT)

Kiwis have a very DIY-centric approach to life, which is good for resilience, but I think it also causes us to miss out on opportunities sometimes.

There are a lot of people ready to help you succeed:

  • Your lawyer
  • Your accountant
  • A buyers agent
  • Other real estate agents
  • A property coach
  • A mentor
  • Builders
  • Building inspectors
  • Lead testers
  • Property managers
  • Mortgage advisers
  • Insurance advisers

These people become your team.

On this team, you’re the captain and you make the decisions. When you don’t have a team and you try to do everything yourself, you’ll make mistakes, or run out of time to get all the information you need to make a good deal.

You might have difficulties with the bank because you put all of your property with them and they won’t lend any more, or you might pay too much tax because your accountant isn’t a specialist.

A good coach, mentor or buyers agent will help you set up and work with a team the right way. It’s not something you need to know how to do like a seasoned professional from day one. Just be aware that it’s coming.

The Risks With OPT

Other people’s time usually isn’t cheap, so the more you know about how to help people get results for you quickly and efficiently, the better. The other risk, of course, is knowing who to work with, which I address both in my course and later in this article.

Know Your Why (and Get Your Partner On Board)


The first thing, which I think everyone skips over, is to have a compelling reason to do this property thing at all.

You really need to know why you’re doing this, because to put it simply, you’re taking on risk with any form of investment. Stuff will go wrong. Other people are going to rent your house and break things, you’re going to be let down by people, there are going to be world events, and politicians you haven’t met are going to call you names to get people they haven’t met to vote for them.

You need a good outcome that you’re working towards, and you and your life partner need to agree on that outcome and on the fact that you’re going to do this. Things will invariably go wrong, so I encourage you both to be well on board and aware of what’s involved.

Even if one person drives it, they need a supportive partner rather than someone who’s constantly saying “I told you so”.

That doesn’t mean you can’t be cautious. A voice of caution will help you avoid rushing into the first half-good deal that you come to regret later.

I have a module in the course on the mindset side of this: finding your why and acting accordingly.

Now let’s get into the concrete stuff. You understand leverage, you and your partner are comfortable with the idea, and you know why you want to do it. Here are the steps.

Step One: Know your Budget

I start here because it’s normally free to find out how much money you can spend. I’d go to a mortgage adviser rather than directly to a bank, because a mortgage adviser looks across the different banks and brings you the best option. A bank will simply say yes or no.

One popular strategy is split-bank lending, so you don’t get stuck with a single bank that holds all the cards and can turn the lights off on you. No bank will ever advise you to take some of your lending elsewhere, so for this reason alone I advise getting a mortgage adviser into your team early.

Your adviser will also walk you through the current lending rules, including LVR requirements and the debt-to-income (DTI) limits that now apply alongside them. Both affect how much you can borrow, and they’re the sort of thing that’s much better to hear about now than after you’ve found a property you love.

If you’d like a mortgage adviser referral, get in touch.

My approach is to find out the maximum number of dollars I can spend. Your “max” is probably more than you want to spend, but it means that if a great deal comes along that’s outside what you had in mind, you can take a swing at it instead of watching it go by.

Step Two: Build Your Knowledge

Once you have a budget in place, let’s build your knowledge and start thinking about property strategies. That way, when you evaluate deals, the words and terms and concepts start to make sense. They link back to what you’ve watched, heard or read about.


I recommend our course for new and intermediate investors. It’s free, and there’s a ton of material in there.

The other place I recommend getting information is the library. Have a look through the investment section. There are several good books, including:

  • Property 101 by Matthew Gilligan
  • The New Zealand Property Guide by Lisa Dudson

Both are pretty comprehensive, and even if they’re a few years old now, the fundamentals don’t really change.

Just start to absorb ideas without worrying about becoming an expert in all things in week one. Every little bit of knowledge helps you know a bit more of what you “don’t know”, so if nothing else you’ll ask better questions later.

Probably the cheapest education you can get, outside my course, is talking to other investors. Lots of great people hang out at the monthly Property Investors’ Association meetings, and they’re a friendly bunch, so go along. There will be one in your town; there are 17 local associations under the New Zealand Property Investors’ Federation (NZPIF).

Membership fees vary by association, so check with your local one. Membership also gets you free access to RentSkills, the NZPIF landlord education programme, which non-members pay a few hundred dollars for. Ask your accountant about deductibility.

It’s really good value.

Step Three: Choose an Ownership Structure

For tax efficiency and asset protection reasons alone, the standard recommendation I hear from just about every accountant is to own things in an entity.

I recommend you work with a property-specialist accountant. Accountancy is quite broad and there are specialities. An accountant who does a lot of property work has seen people get things wrong, and will be focused on property tax law when they recommend a structure.

We work with property-specialist accountants at iFindProperty. If you don’t already have a relationship with one, get in touch and we’ll refer you.

Expect to pay a fee for an initial consultation. You don’t usually need to work with that person long term, though. What normally happens is that you get some advice, and then your accountant goes on to set up your entity.

Whether that’s a company, a look-through company or a trust is something to discuss with them. It’ll have less to do with what’s “normal” and more to do with what else you have going on, plus your plans for the future.

You can hold off setting up the physical trust or company until you’re a little further along, but don’t leave it too late. Your lending needs to be completed in the name of your new entity, and if loan documents have to be changed over, setting up the entity and updating the lending can take a few weeks.

Step Four: Choose Your Strategy


By now we have a budget, and hopefully we know a little about how this works. We certainly have a reason to go ahead, and we’ve put some money into getting advice on a structure, or at least had our initial planning meeting.

Now we move on to strategy. This is where your path could split based on several factors:

  • What do you want out of property?
  • Where are you starting from?
  • By when do you want to get there?
  • What’s your budget?
  • What are you comfortable with?
  • What is your partner comfortable with?
  • Are there any areas the property must be in?

And etcetera.

There’s a surprising amount of questions to tick off, but each makes it easier to focus on what you should do. Your investing approach might end up different from the crowd... I don’t mind being different, because there’s less competition for deals.

The above are guiding principles and I find that if I talk to somebody for 15 minutes and go through those questions, a strategy falls out of the conversation. That’s why we offer a free strategy session for new investors.

I can also question their assumptions and say, “Look, what you want, what you’re prepared to do and where you’re starting from don’t align.”

We then need to change the approach, the strategy, or something else.

Experience helps you avoid wasting a lot of time only to discover there’s a constraint you didn’t know about.

What is a "Property Investment Strategy"?

With property, a strategy could mean:

  • Buying a new build
  • Buying an existing property
  • Buying an existing property that’s relatively nice and needs nothing done
  • Buying a two or three unit existing property for higher cash flow
  • Buying a property with some land you can add a dwelling to
  • Buying a rundown property and renovating it

When I say “renovating it”, I mean project-managing the professionals who do the work, under coaching and guidance from people who know how to scope it.

You don’t have to become a renovator yourself. I’ve renovated a lot of properties and I barely know how to pick up a paintbrush. What I do know is how to run the numbers so that it makes sense to hire a painter.

Having a strategy linked to your goals means you make good buying decisions, and having a trusted team helps with this.

Your buyers agent, coach or mentor can guide you on strategic principles, and your mortgage adviser can then say, “Yes, this is going to work, you’ll be able to keep investing,” or, “No, you won’t. You’ll have to do this or that instead.”

As a side note, some investors use a mix of buying to sell to raise cash and buying to hold as an investment.

There’s an article called The Balanced Portfolio Approach that outlines how that can look.

Rest assured it’s possible, but you need proper tax advice, because they’re very different beasts.

Step Five: Choose a Location

You have a budget, an accountant, an idea for your structure, and a strategy in mind.

Out of that should come at least one location where you can execute. If not, it’s worth pausing to consider a different approach rather than charging ahead.


You probably have multiple options, and I see people worrying that they won’t choose the absolute best market, or confusing the best market with the hottest market right now.

What “best” means could be an equally long article, so go easy on yourself and frame it as: “Where can I make a good purchase with an eye to making another good purchase later?”

To show you how quickly this stuff moves, here’s a snapshot as at August 2026. The softest market among the main centres is Wellington. Public sector cutbacks have hit the city hard, yields are high and prices have come down. The hottest is Christchurch. Everyone seems to want to move there, rents are up, prices are up, and yields are down.

Five years ago it was close to the opposite. Five years from now, who knows?

There are projections for a large increase in school leavers, and as a university city with two major campuses, Wellington is due to benefit.

What’s true today won’t be true in five years, and you’re investing for the next 20.

My point is that it’s very hard to make the correct 20-year call on location if you treat it as a zero-sum game.

Thankfully, even if you buy in the second-best market you’ll probably do very well, and nobody comes along later to take your property away because you didn’t win at investing.

Let’s keep it simple with the old adage: buy well in a market where the numbers work for you and there are solid fundamentals around population, schooling, employment and industry.

Do that and you’ll be fine.

There are always choices, so don’t overthink it. Just make sure the numbers work now, because if you buy somewhere the numbers don’t work, you’ll struggle to build a portfolio.

It doesn’t matter how nice your house is. You won’t be able to buy another one.

The person who buys three properties will eventually do a lot better over 20 years than the fella who bought one trophy place.

Step Six: Find and Secure a Deal

The strategy is in place, the budget is in place, and the team is largely in place, at least enough to get you to the starting line.

Now we’re going to find and secure a deal.

It’s worth pointing out that we’re more than halfway through a very long introduction to property investment and we haven’t yet looked at a house. That’s intentional.

I have a whole video in the course on the process of finding and securing a deal, so I won’t repeat it here. But if you’re hunting out of town, my advice is to get some help.

There are a number of people who can help you:

  • A buyers agent
  • A property coach
  • A mentor
  • Local real estate agents
  • Local property managers
  • Local tradespeople and inspectors

Buyers agents are one option. iFindProperty is a buyers agency, so that’s the service I run.

You can also network with local sales agents if you want to try to do it yourself.

If your target market involves flying, just be very aware that while a selling agent will bring you deals, their job is to get as many offers on the table as possible and the highest price for their vendor.

They don’t really mind whether you buy it or somebody else does. A buyers agent is only paid if you buy.

If you’re looking in your local market, or somewhere you can easily get to, it’s a lot easier, because you can start to learn the market and understand what’s happening.

Even then, you’re still going to need a local team to help you evaluate deals and conduct due diligence.

If you’re working through a coach or buyers agent, they’ll give you access to their team of trusted local experts. Otherwise, it’s time to start networking and finding good people.

The course has a whole section covering questions like how to choose a property manager and how to choose the other people you need. If you’re ready, jump over and watch or listen to that lesson.

Step Seven: Complete Your Due Diligence

You make assumptions when you offer on a property. Due diligence is where you check those assumptions. New Zealand property operates on the basis of buyer beware. You buy it, you own it, and your main opportunity to avoid a mistake is before you go unconditional.

Due diligence does cost money, and it can be very frustrating to spend money on it and then miss out. Just remember you'd rather walk away out a few hundred $$ of DD costs than a costly repair bill.


Here is an old article with a long list of due diligence items you can work through, so you don’t have to reinvent the wheel.

Planning your due diligence comes down to three questions:

  • What should I always check?
  • What extra things should I check for this deal?
  • Who do I get to check those things?

If it’s not an auction or another situation where you’re making an unconditional offer, you get the property under contract and then circle back to complete your due diligence.

The list linked above isn’t exhaustive and it isn’t deal-specific. What you need to investigate for each individual deal will differ. 

A couple of other things to keep in mind:

  • Insurance approval - is particularly important for older properties and properties with unusual construction, previous damage or unconsented work.
  • Healthy homes - most good property managers want an independent Healthy Homes report rather than a self-certification, simply because the liability involved is too high. If you turn up with your own checklist and say you’ve inspected and certified everything yourself, don’t be surprised if the property manager says no... so ask them first.

Step Eight: Prepare for Settlement

You’ve bought a deal. Whoop!

From here on in, if you and your team are organised, things should flow smoothly.

You should immediately do the following:

  • Let your property manager know about settlement and get your paperwork with them underway. They’ll help you plan the transition. If you’re out of town, that usually involves them collecting keys on your behalf.
  • Let your insurance adviser know, so they can make sure the correct cover is in place from settlement.
  • Plan your pre-settlement inspection.

If you bought through someone such as a buyers agent, they’ll help you with the pre-settlement inspection, particularly if the property is remote. Otherwise you’ll need to plan for this yourself.

At your pre-settlement inspection, you’re looking for things that have changed since you went unconditional.

You generally can’t bring up new issues that already existed when you confirmed the contract, so do your due diligence early.

The second thing to know is that if the property is tenanted, you’re not automatically allowed to complete a pre-settlement inspection at all.

That’s a little legal quirk, so request the right to complete one at the time the contract is prepared.

Step Nine: Put Property Management in Place


Your property manager will take over a little before settlement.

If your property is vacant, they’ll photograph it for advertising. If it’s tenanted, they’ll meet the tenants, introduce themselves, get the bond and tenancy information from the previous managers, and get the bank accounts changed over for rent payments.

Your property manager is an important relationship, and if you buy through iFindProperty we’ll refer you to somebody good.

Again, check the course for advice on how to pick a property manager if you haven’t chosen one yet.

My main piece of advice is to go with a dedicated property management agency.

The owner of that business is generally focused on property management, as opposed to running a sales business where property management is a secondary revenue stream sitting in the background.

If the property is already tenanted, the property manager will handle:

  • The transition of the tenancy
  • The transfer of rent payments
  • The transfer of tenancy information
  • Communication with the tenant
  • Changing the bank account used for rent payments
  • Ongoing inspections and maintenance

If the property is vacant, they’ll generally:

  • Get it photographed
  • Advertise it
  • Run the tenant vetting process
  • Run the letting process
  • Handle the move-in

A good operator should make things fairly hands-off for you from here on.

For Self-Managers

If you’re local to your property and want to manage it yourself, upskill a bit to make sure you’re across the rules, regulations and systems.

There are popular apps such as MyRent that help a lot, and the New Zealand Property Investors’ Federation offers RentSkills, a landlord education programme that’s free to members of a local association.

Your accountant should also help you set up a system for reporting your income and expenses.

If you self-manage, you’re probably going to need a separate bank account for the rental property, and you’ll need to keep all of your communication, invoices and documents.

Step Ten: Allow for Maintenance

Most property managers will ask you to name a figure up to which you’re happy for them to spend on maintenance without bothering you.

I normally say one week’s rent, which covers most smaller jobs. I used to have the figure lower, but then I realised I’d never actually said no to a request, so I increased it.

A good property manager will also aggregate jobs where it makes sense. If there’s a small handyman job, they might wait and arrange for somebody to address several minor jobs at the same time.

In your cash flow figures, you’ll probably want to allow around 5% of the rent for maintenance.

You won’t spend that every week, month or year, but over a 10-year period you’ll eventually replace things like carpets, and the allowance takes care of that.

I encourage you to stay on top of maintenance, stop small problems becoming big problems, and keep the property rentable.

When your tenants move in and feel valued, they’re more likely to stay.

Rent is expensive in New Zealand, and your tenants are your customers. If you look after them they’ll generally be more appreciative, although unfortunately not all the time.

Step Eleven: Work Towards a Portfolio


If you’ve done your planning in a logical way with the next purchase in mind, that next step is going to be a lot easier than if you haven’t.

That’s why we made it more than halfway through this article before we looked at a property at all.

At iFindProperty we’ve helped numerous people buy one property, then two, then three, growing and evolving their strategy as they go.

Some clients, after completing a couple of deals, have gone off and started buying on their own. Others have been happy to build a portfolio through us.

Knowing what the bank wants to see so you can keep investing, understanding your wider financial position, and being clear about your goals makes the whole deal flow easier.

You have more confidence that you’re doing the right thing overall, and there’s a lot less friction when you circle back to go again.

I hope you enjoyed this article, and I hope you enjoy the course.

Happy investing.

Nick Gentle

Nick Gentle
Business Owner & Operations Manager
nick@ifindproperty.co.nz
027 358 3855