We meet clients regularly who are looking at getting into property investment and are wondering how much money they need to get going. There are many answers
to this question. Much will depend on your intention and financial position. That said, here are some considerations to help you arrive at the appropriate
range.

  1. If you are buying properties for the first time, you will be pleased to know that right now is perhaps one of the easiest markets for new entrants
    for a long while. There are no LVR restrictions (subject to review in May 2021) which mean most major banks are open to lending up to 80% LVR on
    a property. You’ll need to come up with the other 20% of the purchase price. (At the time of writing, KiwiSaver cannot be used for investment properties).
  2. If you are looking at more specialist properties (multi-units, smaller apartments, leaseholds etc), the LVR may be reduced so you’ll need to come up
    with a higher deposit. In many cases, 30%-50% depending on the nature of the property. Some properties are so unique that banks often wouldn’t
    lend anything on them at all.
  3. If you already own a property with useable equity, you can use that to fund the deposit on another property. If that is the case you won’t need to
    put in any of your own cash forwards the next purchase. For example, you want to buy a $500K property and you already have a $750K property owing
    $500K to the bank ($250K equity), this is generally how you would tackle it:
    • Get a loan for 80% of the purchase price ($400,000), secure the loan against the new property;
    • Top up your original loan to 80% of...