If you’re looking to start building an investment portfolio, using the equity you have built up in your home can be a good way to do so.  Even better, if you built enough equity you won’t have to save for a hefty deposit. In some situations, you can invest without having to find any additional cash.

If you’re ready to start, the first step is to understand how much you need for a deposit. Then, you can decide whether you could use cash or just equity to fund the purchase. 

Calculating the deposit

When buying an existing investment property for rental, you generally need a 30% deposit, which is usually higher than the deposit needed for a home you live in. The type of property you plan to buy affects how much you need for a deposit, so do your homework and check with potential lenders on industry and regulator requirements.

What is equity?

Equity is the difference between what your property is worth according to the market and the bank’s valuations and your outstanding mortgage balance. If your home’s value has increased since you bought it, you might have enough equity to use as a deposit without needing any additional cash. This could especially be the case if you have paid off a good chunk of the mortgage.

If you don’t have enough equity, you might be able to use savings, cash gifts and loan guarantees from relatives to build up your deposit. If you own more than one property, you might also be able to combine equity across them, provided you meet the lending requirements set by your bank or lender. For example, if you have $300,000 of equity in your primary property and $100,000 equity in a rental property, your total equity would be $400,000.

Be aware of the risks

Using loan equity can be a useful way to buy an investment property, but there are risks you should be aware of:

• It can provide greater financial flexibility by allowing you to keep your cash savings intact. However, you need to be comfortable with the potential for market conditions to change and the need to manage the additional debt if property values drop. Additionally, you must be able to make additional payments if interest rates increase.
• It’s important to plan for more than just the deposit and mortgage repayments. Owning an investment property also comes with other ongoing costs such as maintenance, insurance, council rates, and other expenses.
• Also ask yourself: Could you top-up the repayments on your investment property if the rent isn’t enough? Could you cover the costs if your property is vacant for a period, or if unexpected costly repairs are needed?

At the end of the day, using home equity to purchase a quality, well-located investment property can be a promising opportunity to explore with a qualified accountant or licensed financial planner.

Whether you want to buy, sell or rent a property, don’t hesitate to contact your local Raine & Horne office.

Property sales activity has continued to strengthen across the country signalling growing buyer and seller confidence in the market.

Cotality’s latest Housing Chart Pack shows that property sales volumes continued to strengthen in May, with volumes about 5% above the 10-year May average and surpassing average levels for a third consecutive month. Sales volumes for the month were 16% higher than in the same month last year and rose for the 24^th time in the past 25 months.

Cotality Chief Property Economist Kelvin Davidson noted that property sales had been trending upwards for around two years and that sales activity was now back at normal or slightly above normal levels. It was now clear that confidence in the market was slowly returning, supported by falling mortgage rates and inflation being back in the 1%-3% target range, he said.

Meanwhile, the latest Trade Me data has identified Fendalton in Christchurch followed by Wellington suburbs Hataitai and Mount Victoria as being the country’s ‘hottest seller markets’ as measured by the shortest ‘for sale’ periods on Trade Me’s website. According to the latest Trade Me report there are more buyers than available homes in the three suburbs which has led to quicker sales times of between 34 and 45 days.

When it came to the strongest buyers’ markets, where demand is lower and buyers have more choice and time to consider options, Masterton in the Wellington region was the strongest with 80 average days advertised on Trade Me per property. The runners up were nearby Carterton and Cambridge in Waikato, which both averaged 78 days on the market.

Raine & Horne National Compliance Manager James Shepherd said that whether people were buyers or sellers now was a great time to get into the market and explore options.

“In many cities and towns vendors will be buoyed by the fact there is more demand for real estate due to stronger market conditions and lower interest rates,” James noted.

Whether you want to buy, sell or rent a property, don’t hesitate to contact your local Raine & Horne office.

Improving elements of your property so you can charge more for rent makes economic sense if the long-term gains will easily offset the improvement costs. However, before embarking on a makeover be sure to do your cost-benefit calculations and consider whether your current rental charge positions your property at the bottom, middle or upper end of the market.

If you are charging below the average rent for similar age and size units, then it is much more likely that renovating your property will help you make significant gains. Here are some of the best improvement options to add value to your investment property.

Boost first impressions

The outside of your property and front yard are the first things potential tenants see. You can enhance first impressions by enhancing curb appeal. Basic landscaping such as adding plants, laying down mulch, trimming hedges and mowing lawns all make a difference. Enhancing the entrance way with lights, paint and potted plants make it more inviting and upgrading the look of windows with modern but relatively inexpensive blinds will make your property more desirable.

Add a bedroom or separate dwelling

Adding an extra bedroom within your existing property floor plan will allow you to target tenants you might not have previously been able to interest and to charge more. Subject to consenting and district plan requirements, there are a number of ways to do this, from dividing a large bedroom into two to converting a study, dining room or second lounge into an extra bedroom.

In rental properties with large back yards owners can consider building a granny flat or turning a garage into a self-contained unit. This effectively turns the property into a two dwelling residence and when rented out considerably increases cashflow and the property’s value.

Refresh the kitchen and/or bathroom

The state and quality of a kitchen and bathroom are often deciding factors for prospective tenants and usually colour how they perceive the entire property. If either are looking old a renovation may be the best way to increase appeal as well as returns.

Kitchens should be clean, modern and functional, but you don’t need to overspend and completely remodel. Small upgrades such as replacing counter tops, installing new cabinet doors and energy efficient appliances as well as a shiny refrigerator and dishwasher can go a long way in transforming your space.

Similarly, a bathroom can be refreshed by replacing fixtures such as taps and showerheads and installing energy efficient modern lights. A new vanity with storage options increases functionality while regrouting existing tiles can make the room look fresher. 

Change fixtures and replace flooring

Old doorknobs, ceiling fans, light switches and other aging fittings should not be overlooked. They may seem small but they quickly date and devalue your property. Most of the time, replacing these items is cheap but can quickly add value.

The state of flooring also has a significant impact in your property’s appearance. Carpets can be made to look newer with deep steam cleaning and by polishing boards. Floating floors can also be cost effectively installed by DIY landlords.

Paint, if nothing else

Adding a fresh coat of paint is one of the easiest ways to revitalise the look of a property and is something landlords can do themselves or do the preparation for to lower costs.

Whether you want to buy, sell or rent a property, don’t hesitate to contact your local Raine & Horne office.

Kiwis are famous for their ‘she’ll be right’ attitude. But, when it comes to landlords, being too laid back can mean inadvertently falling foul of the law – unless someone like a friendly Raine & Horne property professional is there to warn and protect them.

Let’s look at two examples. It has been a busy summer, and our ‘do it yourself’ (DIY) landlord is looking to escape the coming winter cold by holidaying in a warmer climate. Our DIY property owner is older, retired and can afford to spend more than a month away, combining it with a side trip to see a family member.

Hotels, and air tickets are booked, and off Mr and Mrs DIY go, except no-one reminded them of what the Residential Tenancies Act (RTA) requires of landlords heading overseas. If a landlord will be outside Aotearoa for more than 21 consecutive days, they must appoint an agent to act on their behalf while they are away.

This is not a ‘nice to do’, it is a legal requirement with penalties of up to $1,500 payable to the tenant, and a fine of up to $3,000 if an infringement notice is issued.

If forewarned, our Mr DIY can ask any friend or acquaintance to act as his representative, but they would need to be well-informed of tenancy obligations to manage the property effectively and meet legal requirements. For many, these may be more onerous than they had bargained on.

The good news is that if Mr DIY hires Raine & Horne as property manager he is fully covered and nothing else needs to be done. Enjoy your holiday!

Example two: Without Raine & Horne, Mr DIY may have forgotten one other important thing. According to the Healthy Homes Standards deadlines, every rental property in New Zealand must have been inspected and be fully compliant from 1 July 2025. 

There are no exceptions to this, and any non-complying property cannot be legally rented out. If tenants move out and the property is non-compliant, landlords will be facing an extended vacancy period until everything is up to standard. Non-compliance can also cost a landlord significantly more than just getting repair work done, as the Tenancy Tribunal can impose financial penalties – not to mention the loss of rental income while the repair work is completed.

If Raine & Horne had been retained as Mr DIY’s property manager his rental would have been assessed and any repair work carried out well ahead of the deadline, when it may have been harder to find contractors.

With Raine & Horne on the case Mr DIY could really relax, knowing we have his back, while helping him make the most of his rental asset.

Whether you want to buy, sell or rent a property, don’t hesitate to contact your local Raine & Horne office.

After an impressive run of rental growth there are indications Aotearoa is shifting into a more balanced rental market as we head into 2025.

 The latest Statistics NZ report on rental price movements across the motu show landlords can still make decent returns, but that tenants in Auckland and Wellington in particular are able to choose from a larger pool of rental options. Slowing net migration is also contributing to a flattening of the rental market, CoreLogic says in its latest housing report.

Infometrics chief forecaster Gareth Kiernan said the latest Statistics NZ data showed landlords were having to “compete harder in terms of the rents they are charging to attract tenants to take up rentals”.

 With more choice for tenants and slowing demand the key to continued landlord success is to keep existing tenants happy. Staying on top of property maintenance is crucial in keeping tenants satisfied.

 Regular inspections with your Raine & Horne Property manager are essential to identify problems with your rental early, issues such as leaking pipes, or mould that can be more costly to repair if left but can also lead to tenant dissatisfaction. Once faults are identified have them fixed quickly, while your property manager will follow-up to see if the repairs are holding.

 At Raine & Horne we prioritise ongoing training for our property managers to ensure they remain responsive, respectful and attentive to your tenant’s needs. They are your representative and having a positive relationship between your property manager and tenant is at the heart of long-term rental success.

 A good quality tenant pays the rent on time and treats the property like their own. To retain such tenants, consider fostering a long-term relationship by rewarding their dependability and respect for your property.

 Consider proactively offering your star tenant a long-term lease. This stability can appeal to tenants, and in return, it helps reduce vacancy periods, ensuring consistent returns while saving landlords the time and effort of finding new tenants.

 If your budget will stretch to it, consider upgrading older appliances such as ovens and cook- tops, replacing old curtains and adding new amenities such as heaters or a high-speed internet modem.

Spending wisely to hang onto a great tenant and positioning your property to attract the best candidates when it does become vacant is one of the best investments a landlord can make.

 Whether you want to rent, let, sell or buy a property, don’t hesitate to contact your local Raine & Horne office.

The changes to the residential tenancies legislation passed through New Zealand’s Parliament at the end of last year and came into effect on January 30, 2025, with further changes scheduled for later in the year.

Here is a summary of what tenants and landlords need to know about the amendments, which the government says were introduced to create a more modern and balanced rental market and provide more certainty for all parties.

90-Day ‘no cause’ terminations reintroduced

Landlords will be able to end a periodic tenancy with a 90-day notice and will no longer need to provide a reason. Landlords have also regained the right to give notice to end a fixed-term tenancy at the end of its term without requiring a specific reason.

Shorter notice periods for landlord

Landlords can terminate a periodic tenancy with a reduced notice period of 42 days for specific grounds, if certain requirements are met. These grounds include if the owner needs to use the property as their principal place of residence or for one of their family members, or if there is an unconditional sale of the property.

Shorter notice periods for tenants

Tenants can terminate a periodic tenancy with only 21 days' notice instead of the previous 28-day requirement.

Upcoming – renting with pets made easier, pet bonds and technical changes

In March 2025 further changes will come into effect, including confirming that an email address can be used as an official address in tenancy agreements and that agreements banning smoking indoors are enforceable. 

If a tenant or their child/dependent experiences family violence during a tenancy, they will be able to remove themselves from the tenancy by giving at least two days’ notice.

Effective later in the year, there will be other changes such as provision for pet consent rules (consent is required but landlords can only refuse pets on reasonable grounds), pet bond requirements (up to two weeks’ rent) and tenant liability for any pet-related damage. Disability assist dogs will be exempt from pet consent and pet bond requirements.

These are just key highlights. To explore the changes in more detail please visit the Tenancy Services website here.

Whether you want to rent, let, sell or buy a property, don’t hesitate to contact your local Raine & Horne office.