Property Investment
2 min read
Author: Andrew Nicol
Managing Director, 20+ Years' Experience Investing In Property, Author & Host
How do you know if a property is a ‘good’ investment or not? Is it:
For years, I searched for a simple way to figure out if a property stacks up as a good investment.
It didn’t exist. So I’ve had to create it myself.
You plug a property in, and it tells you whether it's a
Here’s the link to check it out. (It’s free)
Let’s say you’ve been eyeing up this property on Trade Me.
It’s a charming 2-bed standalone house in Māngere Bridge for around $760k. It’s a character home, a 1940s build, on a nice street in a good neighbourhood.
But once you run the numbers with the rent and expected costs.
You see that the property Requires Review.
The projected return is lower than what I’d expect to see in that area.
Then you could compare it with another property I’ve been recommending to investors. It’s also in Māngere Bridge. But it’s a 2-bed townhouse for around $740k.
Once the rent and all the costs are factored in, this one is a High Opportunity.
Why the difference?
Because it’s a higher yield. It’s more affordable, and because it’s a New Build, the investor doesn’t need to put in as much deposit.
So less money put into the investment.
The most important question property investors need to ask is: “For every $1 I put into this property… how much might I get back?”
Remember, there are lots of ways you could make money from a property. Like, through the house going up in value, renovations and cash flow.
And you can put money into the property in different ways too, like your deposit and topping up the mortgage.
Put that together, and you get your return on investment (ROI).
Most people look at a property and pay attention to the property. Not the investment.
They think about the street, the neighbourhood, and whether they'd live there themselves. But none of that tells you what your return on investment actually is.
Two properties on the same street, at the same price, can have completely different returns. That's because of differences in rent, deposit size, and holding costs.
The only way to know is to run the numbers.
If you’re curious about a property you’ve seen (or that you already own), you can run the numbers for free.
Head into Opes+ {link} and add a property in. That’s how you get the Opes Property Rating.
Most investors will never run this comparison. They’ll just buy the property that feels right.
But the difference between the right property and the wrong one can be hundreds of thousands of dollars over time.
Managing Director, 20+ Years' Experience Investing In Property, Author & Host
Andrew Nicol, Managing Director at Opes Partners, is a seasoned financial adviser and property investment expert with 20+ years of experience. With 40 investment properties, he hosts the Property Academy Podcast, co-authored 'Wealth Plan' with Ed Mcknight, and has helped 1,894 Kiwis achieve financial security through property investment.
This article is for your general information. It’s not financial advice. See here for details about our Financial Advice Provider Disclosure. So Opes isn’t telling you what to do with your own money.
We’ve made every effort to make sure the information is accurate. But we occasionally get the odd fact wrong. Make sure you do your own research or talk to a financial adviser before making any investment decisions.
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