How to invest in property if you are a high income earner

Magnifying glass, house

If you are on a big fat salary but don’t have the time to invest in property (but want to take advantage of this market) have you thought about using a Property Finder? On the mortgage front there are also some attractive packages available for high income earners that can help keep your borrowing costs lower.

Property Investment Opportunities

If you read a lot of blogs, you’ll no doubt have come across the bloggers who expect property prices to fall 30% to 40%. In this context how on earth could investing in property in this market be a good thing? From my perspective, there is still good buying around even in this depressed market. The market is not one big amorphous beast so generalisations are dangerous. I’m not saying that all property makes a good investment. I’m also not saying that I expect prices to increase. Far from it -  I still think property overall will fall at least another 5% but not in all parts of the market. Some parts of the market will fall much further and some might even go up. Look at Mt Albert over the past 2 years bucking the trend as Ponsonby families outgrew their bungalows and needed more space. Two areas that look interesting to me are:

  1. Auckland Freehold Apartments
  2. Auckland Emerging Fringe

Apartments

If you can buy an apartment below the cost to build, in a good watertight apartment block, and generate a net yield of 8.5%, how can that not be a good investment? Apartments are harder to borrow on, but that is precisely why the returns are good.

Auckland Fringe

First Home Buyers have become the largest part of a fairly quiet market. In the mid 2000’s they represented less than 10% of the housing market. Today I think they’d be closer to 30%-40% of the market. As they buy into the city fringe, First Home Buyers can gradually transform a suburb (away from low end rentals) making it more desirable for other buyers. If you want examples, Birkdale, parts of Glenfield, Te Atatu South, and Glen Eden have the potential to do this. The good thing with these suburbs is that you can find good deals as over-leveraged investors try to get out. The demand in some suburbs (Onehunga, Ellerslie, Sandringham, Hillcrest) is still too high to regularly find good deals but the odd great deal still seems to be popping up if you're patient.

AQQUIRE: Developing an overall Property Strategy

As with any form of investment it is a good idea to start with some written goals. You can then work backward to figure out how to get there. "Aqquire" are a group of Independent Property Strategists that work with their busy clients to develop an overall investment strategy as well as find you properties. They tend to operate at the top end of the market with busy professionals. Alan who is the driver behind Aqquire is a Chartered Accountant and a significant Property Investor himself.

If you have a high income (minimum $200,000 household income), want to build up a passive property portfolio, then I’d recommend talking to Aqquire. Alan has offered our clients a free no-obligation Property Planning session. This usually costs $550!  If this sounds like you then I'd encourage you to take advantage of this limited time offer.  We got this off Alan for free because of the caliber of our client base. To get this offer simply email Alan at  alan@aqquire.co.nz and tell him you're interested.

Why use a Property Finder?

The problem is that none us have the time to find these properties and do proper due diligence. I’m a fan of using a Property Finder (or a Property Strategist) and there are some good ones around. They are good at sniffing out deals and they know what to look out for. I've mentioned Aqquire above who offer a full service. They can also simply find you a property and specialise in the Auckland market - Auckland City and Waitakere. If you want to buy an apartment then talk to Paul Reid at Iconicity. I have never dealt with Paul personally but a number of our clients deal with him (and I see the results.) If you are looking for a small commercial property or block of units you could try Hadar Orkibi or you could try Maree Mortimer for higher yielding (low end) provincial rental properties. Property Finder will charge you an assignment fee. They purchase the property and negotiate the price, then assign the contract over to you for a set fee. This usually ranges from $5k-$10k depending on the property but can be higher on larger transactions.