Am I ready to buy an investment property?

Are you keen to get into the rental market? But aren’t sure exactly how to go about it? The first thing you need to consider is how much equity or how much deposit are you going to need for your next investment?

A common misconception is that for every investment property, you require 35% deposit or equity to purchase. However this isn’t always the case. If you are purchasing a new property, or something with a new code of compliance certificate, then you only need 20% deposit.

One thing to consider if you own your own home, is that when you are purchasing your next property, you leave at least 20% equity in your own home. So that’s 20% in your owner-occupied property and up to 35% in your rental property, depending on whether it is an existing property or new build.

If you would like me to do the calculations to see how much spare equity you have in your home and whether owning an investment property is possible, give me a call. It will only take about 5 minutes and we will know whether purchasing an investment property is doable and how what price range you can look in.

Phone 021 662 205 or email ryan.amoore@loanmarket.co.nz