Copy to clipboard


Property investors often get cold feet just before they are about to commit to buying an investment. It’s a huge decision… and you might wonder “am I really making the right call?”

Because we work with over 1,000 investors every year here at Opes Partners we often see would-be investors getting cold feet, which stops them from building the investment portfolio they want.

Often these aren’t outside factors – like the bank saying “no”. They’re emotional factors where you talk yourself out of investing … even if you really want to.

In this article, you’ll learn the 7 most common hurdles that can trigger cold feet for investors, and how to jump over them so you don’t talk yourself out of a good deal.

Do you have a question or comment about getting cold feet? Feel free to leave your thoughts in the comment section at the end of the page.

Hurdle #1 – investing in an unknown city

Some investors stall when it comes to buying in a city they don’t know or don’t live in.

For instance, Johnny and Sam live in Auckland and are considering investing in a 2-bed townhouse in Christchurch.

They’re a bit hesitant to seal the deal because, well … they've never been to Christchurch. They think: “How can we be sure this is a good investment decision?”

However, it’s common for seasoned investors to invest outside the city they live in. And as truly unfathomable as it may seem to a first-time investor, there are people out there who own homes they have never seen in person.

The reason is you aren’t necessarily going to get the best deal for your situation in your own city.

Because it adds diversity to the property investment portfolio. Having all of your properties in just one city risks putting all your investment eggs in one basket.

And in this example, investing in Christchurch may be the right fit for Johnny and Sam as investing outside Auckland means they can buy property more cheaply.

How do I jump this hurdle?

The way to combat this is to start research on the area. If you are investing with Opes Partners significant research will have already been conducted and will be included in your property pack.

So a good question to ask your property partner is: “What research have you done on the area?”

For instance, here at Opes we target areas that are currently undervalued, and where infrastructure and population are on the way up.

If you would like to find out more about how Opes scopes out good investment locations, have a read of our article here.

The second way to tackle cold feet is to travel to the city you’re considering an investment in and visit the site. This does cost money (flights, taxis, maybe accommodation).

From our experience working with hundreds of investors each year, this can help them get the confidence they need to go ahead with a purchase.

Hurdle #2 – following family advice over a financial adviser

As convincing as Uncle so-and-so’s opinion on investing was at last week’s BBQ – it’s often not a good idea to place his opinion above a financial adviser.

For instance, Toby and Glen have second thoughts about investing in their first investment in Wellington because their family had a great experience buying in the Hawke’s Bay.

They think: “Well, maybe I should do what they did”.

But here’s the thing, your family love you and they want to protect you, but their opinions are often based on previous experience rather than facts and data or the current market.

If Uncle John says Hawke’s Bay is a great investment location because it’s served him well, that’s great. Hawke’s Bay may have been a good investment location at the time he purchased. But, it’s not necessarily going to be the best place to invest today.

Especially because by our analysis Hawke’s Bay is 10.17% overvalued.

To be clear, your family’s experience may be relevant, and can certainly help. But, what worked for someone 10 years ago, may not be relevant today.

Here at Opes we have a list of 97 developers to choose the best investment for you based on our conversation around goals and what you want.

Hurdle #3 – wanting to spend on yourself

Sometimes an investor will be excited about purchasing a property, and then feel like “it’s not the right time” to invest because they want to spend money on something else.

Here is a real example of why one couple didn’t go ahead with an investment. Steve and Jo were considering an investment property in Christchurch.

They thought: “Great, I’m going to have a tenant paying off my mortgage. Easy!”

But in practice most recently acquired investment properties will be negatively-geared, which means the rental income doesn’t cover all the costs required to run a property.

This is why investors need to pay a contribution to their property – known as a “top-up” – because the rent doesn’t cover all the expenses.

The property that Steve and Jo looked at required an average top-up of about $120 a week for the first 9 years worth of ownership.

They decided not to go ahead with the investment because they had just bought a new puppy (true story). And they were concerned how this would impact what they spend week to week.

Ultimately, the decision not to go ahead with the investment probably wasn’t about the puppy, or how much the couple would spend on dog food.

It was about putting money into the property. Spending $120 a week on the property, rather than on personal expenses.

Property partner Toby Pascoe says the best way to think about this contribution is: “No investment is free. Whether it be savings, shares or property, it’s all about finding the best return on your money.”

Some people will call it a sacrifice: sacrificing short-term goals over long-term gain.

But that word ‘sacrifice’ is a misnomer

“... because sacrifice is giving something away with nothing in return. With investing, you are putting cash in now for a greater return later.”

This doesn’t mean you have to get rid of your puppy. But it is about prioritising investing for your future.

Hurdle #4 – “I’m too busy”

Some investors will decide not to go ahead with buying a property because they are “too busy.”

It’s true. Life is busy, especially if you have a family, work, kids, pets … and some well deserved “me time” scrolling Facebook, Instagram, Tik Tok or Netflix.

Parents Jo and Simon fell into this trap. They considered against investing right now because they’ve got a young family, and both work full-time during the week. They felt they didn’t have the head space to make an informed decision.

And it’s true, they were busy. And while there are ways to minimise the time taken to invest in property, it ultimately comes down to priorities.

Most people will create space and time for something that is really important.

If you bring it back to Jo and Simon, in the end they thought about their financial future and how they were preparing for retirement.

They realised,If we don’t invest now, when will we? We’re always going to be busy”.

And in the end they minimised the time and head space needed to make an investment by working with a financial adviser from Opes.

That way the research, the property-finding, and a lot of the heavy lifting was done for them.

They’ll also use a property manager so they don’t have to spend time thinking about the tenant or sorting maintenance for the property.

This means they can still invest and prepare for their future, while leading their busy life.

Hurdle #5 – trying to time the market

It’s really (really) easy to invest in property when house prices are on the rise. But the market is currently in a downturn.

And that leads some investors to try and time the market perfectly. To wait until the exact point where the market is at its lowest.

Mark and Anna were considering an investment and after looking at a property thought: “The Reserve Bank predicts that house prices will fall further. Why don’t we just wait? Wouldn’t that mean we can get an even better deal?”

It’s great that Mark and Anna are educated and reading economic forecasts.

But there is a real danger in dogmatically following economists’ predictions.

As our own in-house economist Ed McKnight says, Economists often get it wrong.”

For instance, the Reserve Bank initially predicted property prices would bottom out in March 2024. Three months later they pulled this forward by 6 months to September 2023.

So predictions often change.

The issue is that no-one can time the market perfectly. You won’t know when the bottom of the market was until 6 months in the future when the data comes out and shows a consistent pattern.

In the end, Mark and Anna decided to go ahead with their investment because they realised they were already timing the market.

They’re investing at a time when property prices have fallen substantially and they are getting a good deal.

And although prices could fall another 0.5% next month, they could also stabilise, or go up by 0.5%. Locking in a deal today gets them a step closer to the financial future they want.

Over the long term an extra 0.5% either way won’t make a major difference. What matters is getting a good deal in the current market.

Hurdle #6 – media headlines

The media loves a Doomsday headline about the housing market. I know, I’m a journalist and worked at Stuff. We love a good negative headline.

But the unintended consequence of this is that investors are scared of making a decision.

This can mean investors don’t prepare for their retirement and then get scared by headlines that read Most Kiwis not prepared for retirement”. It’s a never-ending cycle.

For instance, Jeff and Jamie were considering an investment property. Then they read the headline “Rents are falling”.

They sent this to their property partner and asked what he thought.

Once their property partner had the chance to go through the article they realised rents were in decline across most of the country.

However, rents were actually rising in the area Jeff and Jamie were investing in.

So, if you were like Jeff and Jamie, you might get freaked out by that headline too, and miss out on a good deal. You’ve got to look past the headline and dig into the detail.

This isn’t said to bash the media. It’s just to point out that news content is not there to help you make an informed financial decision.

This is why you need to speak to your adviser about alarming news headlines like these.

Financial advisers keep abreast of the news, and they will be able to give you a more balanced and accurate take on events.

And even if rents were falling in the area they were investing in, it’s important to note that rents and prices fluctuate. They might go down 0.5% this month and up 1% next month.

The individual bumps along the road don’t matter. What matters is the long-term trajectory.

Hurdle #7 – interest rates and uncertainty

There’s no missing it: Interest rates, like prices of everything else, are rising. Record low interest rates have sent inflation soaring to 7.3% in June 2022.

This has forced the Reserve Bank to increase the OCR in an attempt to temper the economy.

One of the knock-on effects of this (as well as a higher mortgage repayment) is a much higher weekly top-up.

The top-up amount is what scared Sally and Sione out of signing a deal in South Auckland. They figured it would be worth just waiting it out a year or two, for when interest rates go back down and they could afford the top-up.

In practice, a temporary hike in interest rates may not actually translate to a huge increase in the top-up amount.

Let’s say you budget for a 5.75% interest rate next year. What would happen to the amount you have to top up a property if the interest rate increases to 6%?

If you buy a property worth $800,000 (and borrow all of the money), then you will pay extra interest of $2,000 a year, or $38 a week.

The question you need to ask yourself is, If that happens, will I pay an extra $2,000 for this property if I wait and interest rates start coming down?”

In this case, Sally and Sione realised that when interest rates start coming down the property price could easily increase 10x that.

So, even if they did have to put in an extra $38 a week, it would be worth it in their eyes.

If you are struggling with the top-up for an investment property, learn the 7 strategies to manage your top-up as interest rates rise.


How to handle emotions in property investment

This article isn’t about us telling you what to do, or telling you not to have concerns, questions or emotions about investing.

Investing in property is a big commitment.

However, if your goal is to build a property investment portfolio, then it’s important that you manage your emotions so you can make an informed investment decision.

Opes Property partner Toby Pascoe says he feels a “pit in his stomach” seeing a client pull out because of cold feet.

“I hope they will press on. They’ve worked so hard to get to that point – to see it all fall over is disappointing for the investor, more than anyone else,” he says.

Write your questions or thoughts in the comments section below.

Opes Partners
Laine 3 001

Laine Moger

Journalist and Property Educator with six years of experience, holds a Bachelor of Communication (Honours) from Massey University.

Laine Moger, a seasoned Journalist and Property Educator with six years of experience, holds a Bachelor of Communications (Honours) from Massey University and a Diploma of Journalism from the London School of Journalism. She has been an integral part of the Opes team for two years, crafting content for our website, newsletter, and external columns, as well as contributing to Informed Investor and NZ Property Investor.

View Profile

Related articles