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Maximizing Your Wealth: The Power of an Investment Property in NZ

Your next greatest gain is lying in wait. The property market in New Zealand may have seen some turbulence in recent times but that doesn’t mean the opportunity has dried up. Buying a house in NZ could be the chance you were looking for!

With an unprecedented rise in the cost of living expenses across the globe, the world is waking up to the real estate market again and we’re here to let you know the ideal way to go about your first investment property before you decide to take the dip.

The broad strategy for your investment can be based on two approaches. ‘Buy and Hold’ or ‘Buy and Flip’. While both have their own advantages, they both come with their own pitfalls that you will need to be wary of before stepping into the property ring.

1.  Buy and Hold
Much like its name, this strategy is a long term grind and requires some prudent thinking before making your foray into it. While more low maintenance than the ‘Buy and Flip’ model, this strategy requires some foresight and could benefit from advice from experts like those at MortgageDesign.

Advantages of the Buy and Hold Model:

  1. Easier to Activate
    With banks looking favorably upon long term investments, the deposit terms for loans on this strategy are usually more manageable than any other. To anyone looking to enter the market as new entrants, this presents a significant advantage as the pool of prospective properties is considerably enlarged as an opportunity.

  1. Low Day-to-Day Commitment
    The Buy and Hold strategy doesn’t require any regular upkeep, as once identified as an opportunity, the investor will only be required to maintain the property to local council standards or as per the terms of the lease as opposed to actively renovating the property.

    If renovations are deemed to be the need of the hour too, these can be phased over a longer term not stretching the investor liquidity by too much.

    However, if you plan to rent out your property, even in a buy and hold model, this might mean hiring a property manager. A cost that you could do with factoring in while considering the opportunity.

  2. Buffer from Potential Mistakes
    Much like any other market, a first time investor is bound to stumble before they can run. As such, this strategy allows you to remain insulated from any temporary dips or spikes in the property market.

    In the longer term, the property market has shown great resilience and returns are almost assured provided the considered duration of investment is long enough.

Disadvantages of the Buy and Hold Model:

While multi-factored and a reasonable advantage to those looking to stay invested long term in the market, the buy and hold model has its own shortcomings.

Primarily, the ability to realize gains is a hurdle. With it being tough to liquidate large valuation quickly, the buy and hold strategy carries with it a substantial period for investors to draw fruit from this tree.

Why People Choose to Buy and Hold?

With most New Zealanders looking at investment as a secondary source of income, the buy and hold strategy sets a relatively low entry barrier for those looking to foray into the market and provided the investment has started with some level of consideration and due diligence.

With advice from industry experts like MortgageDesign and negotiated interest rates that give allow you a great opportunity, the buy and hold model is one that you can definitely consider over the long term.

2. Buy and Flip

The Buy and Flip model is for those looking for more of an active engagement in the house ownership market and, while rewarding, carries with it considerations of its own that anyone will need to consider before coming into it.

The Buy and Flip model inherently relies on the ability of an investor to improve the nature of property after purchase to make it more accessible or attractive to buyers after renovations. While the degree of satisfaction from such projects remains incomparable to any other, so are the potential pitfalls.

Advantages of Buy and Flip Model:

  1. Quick Exit and Equity
    A buy and flip project is perhaps one of the few projects which if undertaken with proper inputs can yield a high return rate in the short term.

    This, however, comes with its own challenges. While selecting a property may be easier considering the condensed time window, the effort put in on a single property is infinitely more than is for ‘buy and hold’ properties. This also translates into higher requirements for renovations, but with well executed projects, the rewards are often commensurate.

  1. A Sense of Pride and Satisfaction
    A New Zealander’s pride and joy will always lie in their ability to grow their work and showcase the progress they have been able to make. The ‘buy and flip’ allows investors tremendous opportunity to create value with their properties and to grow their reputation as a part of the market.

Disadvantages of the Buy and Flip Model:

  1. Lump sum Payout
    Unlike the ‘buy and hold’ model, this investment only means that your payout, while significant, will be in a single bullet payment and will not accrue as time goes on. While liquidity may be your priority, this also means considerable investment on your part even despite its initial allure.      

  1. Large Time and Effort Commitment
    With the ‘buy and flip’ model, the need for supervisory direction is significant. This means naturally that the time that one would spend on a project of this level would be significant and will indeed require that the investor play an active role in its development.

  1. Heavy Capital Investment
    With financing taking center stage in projects of this nature, expert help is naturally appreciated. While industry leaders like MortgageDesign will readily step in to help with the growth in such investments, banks usually require a heavier deposit to approve such commitments. Renovations too eat into the cost of the project over the cycle.

It is generally advisable that if you are picking to ‘buy and flip’ a property that you ensure a certain level of proximity with the project to keep a closer check on the progress to ensure it’s proceeding as per your vision

Why People Choose to Buy and Flip?

Imagine that a north shore property in Auckland is lying vacant on a lot near you. Aware that the location is primed for an influx in the years to come, you put up a property, renovate it with advice from the best property advisers in Auckland and manage to make returns in the space of 8 -10 months! We’re not joking! It is possible!

However, advise from industry leaders and a clear vision for the project is an input that for such projects cannot be ignored! Granny homes present the ideal stepping on point for anyone looking to make their first foray into these projects, but make sure you check your local council zoning regulations if this interests you!


With the Auckland market reflecting a 6.17% growth year-on-year from 2003 to 2023, the market has clearly shown great scope for investors willing to take the plunge. [1]

With MortgageDesign by your side, it always helps to have the help of Auckland’s top mortgage brokers at your side through your journey. Make sure to give us a call and you’ll be sure to have us to help you through your investment journey, whichever path you decide to take.

Frequently Asked Questions

The deposit required for an investment property typically ranges from 20% to 35% of the property's purchase price. Lenders often require a larger deposit for investment properties compared to owner-occupied homes. However, the specific deposit amount can vary depending on your financial circumstances and the lender's policies and the type of property you intend to buy.

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We take into account your long-term financial goals, turning our focus to ensure that your mortgage structure is well-suited to enable your property portfolio to perform.