1. Take that first step

Try getting a ‘gift’ from mum and dad, going in with family or friends, and foregoing KiwiSaver as a deposit to purchase an investment property instead of a home.

All these are strategies you can use to speed up the process of getting your first step on the property ladder – and if you’re just starting out, working with a professional can help. That way, you can get the right structuring advice early, to protect your wealth for the future.

2. Add value for capital growth

Renovating houses is a tried-and-true way of adding value that can then be used as equity for your next purchase.

You can reduce the cost of renovations by doing some of the work yourself, or pay the professionals to do it. But whatever your strategy, it is important to consider what you are doing, how much you are spending and the value that it will add.

3. Find lenders that work for you

Taking the leap towards your first investment property can be a straightforward process if you have the equity. But what if you don’t quite have enough equity, or, what if this is your second or third investment property?

Working with a mortgage broker to split your lending across more than one bank can mean the difference between an investment property and multiple investment properties.

4. Go second-tier

Second-tier lenders can unlock equity in your portfolio that isn’t usable at main banks.

Knowing which lenders have the credit policy that suits you best and what properties to shift will unlock equity to allow significant growth across your portfolio.

5. Climb the complexity ladder

Moving a step up from purchasing rental properties, you could try new-build townhouses to subdividing or even to developing a site.

It’s important that you have an experienced team who can provide you with advice on the specialist lenders, the type of finance and the specific requirements that the lenders will have for the development.

6. Go commercial

Diversification into commercial property comes with a unique set of challenges but get it right and the cashflow from these investments can outperform residential investment.

Using equity in residential property to reduce the reliance on commercial lending can dramatically increase your return on investment (ROI) from commercial investments.

7. Time in the market

Often, we see people who hold off entering the market hoping to time a drop in house prices so they can purchase a ‘better’ property.

Our advice is that investment is about time in the market versus timing the market.

Most of the time buyers waiting to time the market end up missing out on houses and paying more for a house that they could have bought more cheaply six months ago.

To get help on your journey up the steps to wealth, contact the team at Lighthouse, info@lighthousefinancial.co.nz