We did Way #2. Took the long slow route but after 30 years now have 4 freehold rental properties plus our own freehold house. Nice to now have choices in our mid 50 s
4% net return highlights why residential property isn’t a great investment for cashflow or income purposes. You are better off in a balanced managed fund averaging 5-7% net returns and not have to deal with tenants or property hassles.
You can borrow money from the bank for houses, not stocks. My first place was 15k down for a 300k house about 10 years ago. What would have been better invest, 15k in a managed fund or 300k property?
@@thedon9670 actually leveraging is possible with managed funds too (e.g. the Geared Growth fund from Booster). Leveraging carries additional risk whenever and wherever it is used, when property or share markets fall leveraging is the undoing of many an over aggressive investor that chose to ignore this risk
@@jeromesolanki9670 did you conveniently ignore the cost of borrowing in your scenario? Plus you can leverage within managed funds if you want to. Long term market stats show that growth funds outperform residential property over the long term. If it wasn’t for the capital gains tax break on residential property in NZ, it wouldn’t be nearly as popular. Commercial property is a different story, particularly for those wanting a reasonable yield or cashflow which this video is focused on.
Many investors need to top up each month because expenses exceed income. This was made worse by the previous Governments decision to disallow loan interest costs. Actual net rent returns were just 0.3% according to one tax advisor based on 2021 tax data.
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thank you for the calculation! It helps to keep the goal clear!
We did Way #2. Took the long slow route but after 30 years now have 4 freehold rental properties plus our own freehold house. Nice to now have choices in our mid 50 s
You guys should do a video on ownership structures especially now that trust tax rates have gone up to 39%
no music would be good
Also dont forget property needs to be maintained and maintenance costs are going through the roof.
This is my friend he has an investment property that he rents and a commercial property that he leases.
I hope to be like him one day
Owning commercials the fucken dreeeam!
4% net return highlights why residential property isn’t a great investment for cashflow or income purposes. You are better off in a balanced managed fund averaging 5-7% net returns and not have to deal with tenants or property hassles.
Managed funds can't be leveraged which is the true power of property.
You can borrow money from the bank for houses, not stocks. My first place was 15k down for a 300k house about 10 years ago. What would have been better invest, 15k in a managed fund or 300k property?
@@thedon9670 actually leveraging is possible with managed funds too (e.g. the Geared Growth fund from Booster). Leveraging carries additional risk whenever and wherever it is used, when property or share markets fall leveraging is the undoing of many an over aggressive investor that chose to ignore this risk
@@jeromesolanki9670 did you conveniently ignore the cost of borrowing in your scenario? Plus you can leverage within managed funds if you want to. Long term market stats show that growth funds outperform residential property over the long term. If it wasn’t for the capital gains tax break on residential property in NZ, it wouldn’t be nearly as popular. Commercial property is a different story, particularly for those wanting a reasonable yield or cashflow which this video is focused on.
Many investors need to top up each month because expenses exceed income. This was made worse by the previous Governments decision to disallow loan interest costs. Actual net rent returns were just 0.3% according to one tax advisor based on 2021 tax data.