Capital Concepts specialise in working with property investors, whether first time investors or experienced.

Over the years, we have conducted property investment seminars in conjunction with three different real estate companies throughout the Wellington region along with specialist property advisers such as accountants, solicitors and property managers.

Not only have we financed many investors into property, we have also helped many investors find suitable property and therefore acquired extensive knowledge of the Wellington property market.

There are many aspects of property investment to consider but we’ve put together a list of the important things:

If you are considering investing in property for the first time or are an experienced investor considering your next move please contact Frank here for advice and information.

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  1. Security in your investment


Quality is a massive aspect ensuring you have an asset that is rentable and easy to sell when you need to. It’s important to get a builders report and make sure you’re not purchasing a property that could end up costing you a lot of money if it’s not planned; such as a leaky home.

At Capital Concepts, we often recommend buying renovated or new property because they have;

  • Low or no maintenance
  • Premium rents – tenants will pay $50-100 per week more for a nice place to live
  • Less tenant issues
  • Maximum depreciation claim on chattels
  • Growth potential based on replacement costs

If you own a quality property in a great location that people want to rent, you will have a property that other people will want, and it will be relatively easy to sell when the time comes. This provides you with a high level of security. Proximity to the city and hospitals, university and other major employers are demand areas for tenants.

Therefore, our advised target area is to invest is within one or two suburbs from the CBD. In Wellington, this means suburbs such as Te Aro, Mount Cook, Newtown, Kelburn, Thorndon, Wadestown and Mount Victoria.

Get in touch with Capital Concepts for more information on quality property investments in Wellington.

  1. Growth

It’s important to think about growth on investment in the future, and there are many factors that contribute to this.

Land scarcity

Where there is a shortage of land, there will always be pressure on land values.

Population growth

If there is a shrinking population, there will be an oversupply of housing, weaker demand and flat or negative property prices. In contrast if there is population growth, this creates an under supply of housing, greater demand and increase in prices, especially where there is already a shortage of land.

In the major metropolitan areas in NZ there is expectation of population increases over the next 20 years. Investing in these areas would be wise for people wanting capital growth as all the ingredients for growth are present.


This is a very important factor as certain parts of any town are always in more demand than others and grow at a better rate. Walking distance to the CBD is always a contributing factor.

Traditionally property has doubled in value every 10-15 years. However, it does not go up at an even rate year by year. Traditionally, property will have nil growth or even negative growth for 5-7 years and rapid growth over the next 5-7 years. This was exactly the case in Wellington from 2009-2015. Property prices were stagnant in this time, but then took off the years from 2015-2019.

Now is a good time to buy!

Prices will probably never be cheaper and will keep rising over time. Interest rates are still low and the outlook is for that to continue for the medium term.

Contact us to enquire regarding finance for property investment.

  1. Personal control

Buy property on your own if at all possible rather than jointly with other people.
This makes it much less complicated for the following reasons;

  • You decide if you want to manage it yourself
  • You decide whether to appoint or change a manager
  • Choose the tenants yourself if you wish to
  • Live it yourself if you choose to
  • Renovate when and if you choose to
  • Sell when you want to

If you choose to buy something with limited control, for example with a body corporate or serviced apartments, make sure that there is a trade off. There needs to be higher yields, better cash flow or greater potential for growth.

  1. Yield

Property should be considered on balance. The main things to consider when buying a property are;

  • Quality
  • Location and rental demand
  • Attracting and keeping good tenants
  • Yield and cash flow

If all of these things are satisfied, we are happy with a 7-7.5% gross yield.

Around 7% is the average interest rate over a 10 year period. A gross yield of 7.5% will cover your average interest costs and probably the fixed costs of rates and insurance. When interest rates are low, there is enough left over to bank some against future interest rate increases.

Using gross yield to determine purchase price

A quick and simple method to work out how much you should pay for a rental property is as follows. Take the annual rent and multiply it by 14 for a 7% return.

For example, if the rent is $500 per week, this equates to $26,000 annual rent. Multiply $26,000 by 14 and you would pay $364,000 for the property. If you were happy with a 6% return, multiply the annual rent by 16 times. This means that you would pay $416,000 for the same property.

The amount that you are prepared to pay, and the yield that you are looking for will be determined by current interest rates, the location and condition of the property.

Always remember the two main considerations are;

  • Rental demand
  • Resale
Yield versus cash flow

Too many investors get caught up with the yield of a property. It’s better to focus on cash flow.

The gross yield of one property may be better than another. However, if there are vacancies and maintenance costs on the first property, this could detract from the overall viability of the property and make it worse than the one that had a lower gross yield. We do a cash flow analysis on each property taking into consideration factors such as;
vacancy, interest, costs such as rates, insurance, property management, body corp fess, repairs and maintenance etc. We then allow for chattels depreciation and tax rates to show how the property will perform before and after tax.

  1. Tax effectiveness

Tax must also be looked at on balance. Make sure that you sit down with a specialist property tax consultant and ensure that your structure is correct prior to buying a property. There have been a lot of changes in the last few years and a good property accountant is more important now than ever. Capital Concepts can point you to a very good property tax specialist.

  1. Cost versus valuation

Some investors are looking for immediate equity in a property. So in other words they look to buy a property for less than its market value. If you are prepared to undertake renovations to property, you can often buy well and build in equity through the renovation. Capital Concepts take a long term approach, and believe that equity is achieved as property increases in value over time.

  1. Exit strategy

Start with the end in mind. If you buy a good quality property, in good rental demand locations, when the time comes to sell someone will want to buy the property for the same reasons that you did. Buy well and hold it for the long term.

Case study 1

Colin in Wellington had several rental properties and when we met him he had nearly $3m of borrowing with the ANZ. He was making principle and interest payments and was very happy with his portfolio and his overall position. However when we started to review Colin’s situation, it appeared that he was neglecting to do any other than urgent repairs and maintenance to his properties.

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Case study 2

John had a lot of property in Wellington and wanted to buy more. Unfortunately for John, he didn’t know how much he could buy. When he saw a property that he was interested in, he made an offer subject to finance and crossed his fingers until he heard back from the bank. Even though the bank never said no, John had no confidence in his borrowing ability and when we met him was very reluctant to look at buying more property, even though he really wanted to.

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Case study 3

A Christchurch couple that we met felt that they had reached the maximum amount of property that they were able to buy. They had a number of investment properties that were financed with different banks. While they had a small to medium amount of equity with each lender, it was not enough on its own to allow them to borrow against to increase their portfolio.

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Case study 4

Peter is a property investor/property manager who has a large number of rental properties and chose to have all his loans on a variable interest rate. He did this as he wanted to be able to reduce debt when it suited him and also to repay loans if he sold a property.

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