#3 – Wanaka, Queenstown Lakes
Here’s a controversial one. I’m putting Wanaka in third place as one of the areas I wouldn’t recommend for investment.
Let’s be honest, Wanaka is one of the most beautiful parts of the country. It’s a great place to visit.
But it’s also one of the most expensive small towns in the country. Less than 10,000 people live there. Yet, it has an average property value of almost $2 million (CoreLogic, March 2024).
What’s the harm in that? One of our financial advisers, Kathy, worked with an investor who wanted to build a property portfolio for retirement. He went on holiday to Wanaka and bought a property for $1.45 million that he’d use as a rental property.
In his mind, Wanaka was beautiful and popular with tourists.
That is all true.
But in that moment, when this investor bought the property, was he in “investor mindset”, where his primary concern was buying a property that will contribute to his retirement? Or, was he in “homeowner mindset” where his primary concern was buying a beautiful place?
He was likely in homeowner mindset.
What’s the issue with that? It’s not just that he might overpay for one property, but that by buying one single expensive investment he couldn’t grow a portfolio of properties around the country.