Property Investment NZ 


Are you a property investor (or planning to be one)?

When it comes to wealth creation, there are really only three ways to make money:

  1. Business - start or buy a business, grow it and eventually sell it or live off the profits.
  2. Shares - buy to hold or buy to sell shares.
  3. Property investment (see below).

GRA focuses on property and business. If you are involved in small to medium sized businesses, and/or have an interest in paying less tax and creating wealth through property investment, we can help you.

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Why is property a good investment?

New Zealanders are rampant property investors for many reasons.

  • Property offers the ability to create wealth through adding value. Kiwis buy property and add value to it, creating a ‘step up’ in value, often in the first four months of ownership. This allows deposits to be recycled (returned and used again in subsequent investments.) It also makes money, often much more than you make from a salary or self-employment.
  • Property provides investors with the benefit of leverage.
    • If you purchase, say, $1m  of property with a $300k deposit, you get growth on $1m, while only investing $300k of your own money. This represents 70% leverage.
    • You can even borrow the $300k against your existing home. So that represents 100% leverage.
    • Say the $1m of property doubles in value over 10 years, which has been normal for the last 40 years in New Zealand, in nearly all of the main centres. Then you get $1m of growth, on either $300k invested or $0 invested (if you borrow the deposit). This is the benefit of leverage.
  • Property is tangible ‘bricks and mortar’ - it physically survives a market meltdown. Often paper assets like shares disappear when businesses fail.
  • Careful selection of property by choosing the right asset, can produce excellent cash flow in New Zealand, with net yields (after operating expenses) routinely exceeding 5%, depending on area and asset type.
  • Property gains are non-taxable in New Zealand for most long-term investors, and we have no stamp duty or specific land taxes.
  • The ability to create wealth through buying property, recycling deposits and re-investing, creates some very large investors out of small households, and enables a path to a better retirement for many Kiwis or foreign investors in New Zealand. This would be otherwise unattainable in unleveraged equity or cash savings schemes, if they took that path to save for retirement.
  • Even your family home, if purchased sensibly, can provide excellent capital growth, which again is untaxed in New Zealand.

Using a variety of reliable strategies to create a portfolio of investment properties is a proven way to build wealth, and at GRA we can show you exactly how to do it.

To facilitate this, we have a number of related partners and subsidiaries, tools and education programmes that assist clients with:

  • Tax structures
  • Finance
  • Education
  • Property analysis tools
  • Area research tools
  • Property mentoring

Talk to our GRA team if you want to learn more - we can assist you if you are time poor, or show you how to do it yourself by helping you get educated and providing you with the tools you need to purchase property at the right price.

Click the buttons below to learn more about these topics directly, or read about the investing process and example strategies further down the page. Or watch one of our pre-recorded and comprehensive Property Investment &  Education Seminars.

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Services to help with
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Ways to learn about property with GRA

  1. Education: We have cloud-based and in-classroom learning available, with a huge volume of videos and online learning.
  2. Property Investment Mentoring: Use our property mentors in our subsidiary, NZ Property Mentors, a GRA mentoring business that provides supervision from experienced investors.
  3. Analysis Tools: Use our cloud based property investment analysis tools, that forecast returns and help you focus on what’s important, like purchase price discount, capital recycle, cash yields and net operating income. Use our client property analysis tools for different types of investment, and different strategies, including:

    • Residential
    • Commercial
    • Buy to hold
    • Trading
    • Houses of multiple occupancy (HMOs)
    • Subdivision and development
  4. Research Tools: We have outstanding property research tools that allow you to prepare a current market analysis, and determine quickly what values in an area are, by doing a radius search. A radius search is a search of recent sales in an area, with defined parameters.
    • For example, sales of properties within the last 12 months, within 1 km of a house you are interested in, that are of similar characteristics

Property analysis tools and research tools make sure you get all the numbers into your property analysis, and don’t leave important information out, or use incorrect numbers.

Property Investment Strategies

Where do you start in property?

There are so many opportunities for small investors and business people to get stuck into. Typical strategies that GRA and NZ Property Mentors can help with are discussed below. Work your way through the strategies, and if something resonates, give us a call, or start using our online education.

But don’t get too excited; talk to us before you buy anything, so we can:

  • Check the deal is ok
  • Check your tax and legal structures
  • Assist you with the best investor finance solution
  • Provide consultancy over the asset, strategy and area

SAP – Strategy, Area, Property

When investing, consider SAP (strategy, area, property), a common approach to optimising your property selection. 

Strategy – what are you doing? Holding, trading, developing?

Area – Based on your strategy, what area is best?

Property – Having picked your strategy and area, what sort of characteristics of a house are you looking for, to meet that strategy? Find the house, and perform verification of the numbers, viability and strategy being applied to that property.

By starting with strategy, then picking the appropriate area, and then picking the property, you get a better outcome. For example, you generally won't find cash flow properties in high growth areas.So if you are chasing high growth, you pick a growth area, then the property. If you are after higher cash flow, you choose a typically high cash flow area, then pick the property. Another example if you are looking for high cash flow, is to consider a boarding house or ‘rent by the room’ strategy, collectively referred to as HMOs (houses of multiple occupancy). These only work in certain areas. So Strategy: HMO Area: Near universities, language schools, or centers of employment. Property: Large house with lots of rooms.

Reducing risk through verification

Use experts to verify, and reduce risk. At GRA, we have a one-stop-shop of advisers, partner organisations and people to assist in due diligence and strategy execution, along with clever chartered accountants and tax people, advisory services, and cloud based learning.

Builders say measure twice, cut once. At GRA we say, check twice, buy one. Get it right the first time, and avoid traps and novice mistakes.

Common Property Investment Strategies

Buy & hold property, for long-term investment

As the name suggests, this is about buying property and owning it long-term while renting it to tenants. Generally there are two main types of buy and hold properties, and you need both to create a successful portfolio:

  1. Cash flow property: These properties provide you with income (cash flow). The rent covers all the costs of owning the property (including loan payments) and provides a surplus above this. If you get enough cash flow to replace your job, you become financially free. You choose to work or not, the choice becomes yours. Which is what this is all about.
  1. Capital growth property: These are the properties that increase in value markedly over time, due to their location.
    • Often the rental income does not cover the costs of ownership for capital growth properties, so you have to inject money from elsewhere to cover the loan payments.
    • These assets tend to be higher value and in better areas.
    • Your family home should also come under the category of capital growth property. 

The capital growth properties will substantially build your wealth and the cash flow properties give you the means to do so. You need a balance of both in a portfolio, and there are a few tricks to doing this successfully, which our team at GRA and NZ Property Mentors can show you. 

Instant Equity: Making money when you buy 

Whether you are trading or buying to hold, one of the keys to being successful in building a lager property investment portfolio is adding value when you buy.

When done correctly, ‘adding value’ allows you to make instant equity (gains) in the first 3 to 6 months of ownership. This de-risks your investment, because if the market falls, you lose profit, not cash. You also make money, which is what it is all about.

For example, if you have purchased a house for $400,000 and spent $50,000 on a renovation, and it re-values at $600,000 on completion, you have made $150,000 of instant equity (after revaluation).

  • If the market was to fall 20% ($120,000), you would lose $120,000 of your $150,000 instant equity gain. In other words you lose your profit, not your cash invested.
  • With the right finance in place, you can borrow against the increase in value, and return much of your cash invested. In this case you might borrow up to 70-80% of the $150,000 gain, returning most (or all) of your cash invested into the property.
  • This allows you to ‘recycle’ your deposit and renovation money into another property, and grow a larger portfolio. GRA and NZPM can teach you some strategies for doing this. 

Strategies to add instant equity

Common examples of adding value include renovation, adding a room, sub-dividing land off the back and adding second dwellings (within the house, or building in the front or back yard).


Let's say you find an Auckland property in an investor area, that was once a 4-bedroom house, but past owners have opened one of the bedrooms up to provide a bigger lounge. The property is run down and shabby. It is currently owner-occupied, and the owner either doesn’t notice the mess, or doesn’t have the money or inclination to fix the property.

You buy it for $550k, and renovate it for $50k. Included in the renovation is reinstating the wall to make the house 4-bedroom again. Putting a wall up costs very little, and $50k is a pretty standard renovation budget in Auckland for a trade or rental. For that you should be able to get a new kitchen and bathroom, repaint, re-carpet and do some basic landscaping. And address any wiring or plumbing issues.

You borrow 100% of the purchase price using another property you own, (say your home), as security for the purchase. Or maybe you use a relative's property, or get some vendor finance - you find the deposit however you are able.

On completion, two things happen:

  1. The house re-values at $725k, over the cost you paid of $550k plus $50k renovations (i.e. a total of $600k). You make $125k on $725k, which is a purchase price discount of 17%.
  2. The rent increases to $600 per week.

Below is a summary of the cash flow of this investment example, using our investor Property Analysis Tool in our Wealth Suite.

Note that sometimes it won't be possible to borrow the entire purchase price upfront. In the future, the asset should grow in value and you can recycle your deposit out. In the meanwhile, at the stated interest rate the asset is positive cash flow $6,300 at 80% LVR, and if you borrowed the deposit, $2,100 positive cash flow overall. So you have a renovated, asset in Auckland producing positive cash flow. Not bad.

Looking at the way we approach finance and using our Property Analyst Tool in the Wealth Suite, the financing looks like this:

Key points

  1. The investor needs to fund the 20% deposit in this example, plus the other costs including renovation and settlement.
  2. 20% is possible through using a specialist finance broker, who can obtain 80% loans. (Normal LVRs at time of writing are restricted by the Reserve Bank at 70%.) Our finance broker can show you ways to lawfully and easily borrow more than 70% for investment property.
  3. On completion, the investor can borrow against the re-valued property and get $140,000 of the $162,000 recycled back, leaving $22,000 cash locked up.

Not every property (especially in high capital growth areas) will generate enough cash flow to be able to pay for itself, like the one in our example. But it is something that a good investor should be aiming for.

Learn more about how to find, analyse and do deals like this in our Property School, or hire our mentors from NZ Property Mentors and get them to teach you the safe way to do this. Start with our Property Investment & Education event for a free introductory seminar with our resident expert and author, Matthew Gilligan.

Trade property

Property trading involves buying a property and then on-selling it for a profit.

The main ways investors make such profits are by buying property that is suitable for adding value to, and then selling at market value. There are many ways to add value, e.g. through renovations. Here are some examples of one of our NZPM mentor’s ‘value add’ properties in Rotorua.

1. Te Ngaire Road

You can see the investor has cleaned up and repaired a house that was in very poor condition. New kitchens, bathrooms and floor coverings, repainting, and making the house healthy and secure, increase the value. The key is to project the end value, and make sure you don’t spend more than the house is worth. That’s called over capitalising, and instead of getting instant equity, you get equity loss.

2. Clayton Road

With this property, the investor reinstated an internal wall to convert the house back to three bedrooms, from two. This, along with a cosmetic renovation increased both rent and market value.

3. Thomas Place

Sometimes a simple bit of painting and landscaping makes all the difference, like this unit in Thomas Place.

Painting the exterior was quick, cheap, easy, and above all, effective. 

Rent by the room / Houses of multiple occupancy (HMOs)

Buying a property with many rooms and renting it out on a room-by-room basis, is a very effective way of increasing cash flow. As part of the arrangement, you provide internet, shared facilities, and agree that each tenant is only liable for their single room. Here are some figures to illustrate how such an arrangement might look. 


  1. Say the property is worth $550 per week as a 5-bedroom house.
  2. On a rent-by-the-room basis, you can get $250 for each room, or $1250 per week, which represents a vast improvement in cash flow. 
  3. From this you deduct the operating expenses, power, water, internet and outgoings. 
You will find that if you learn this strategy, it is a great way to increase cash flow. However, the rent-by-the-room strategy will not work with every multi-bedroom property, it is best suited to properties in areas popular with students or near employment.

You also need to be careful when you cross over into boarding house territory, which is more complicated with regard to regulations and tax, but can provide better income again. You do need to be mindful of the implications and costs of the regulations, and changes in tax and residential tenancy laws that affect a boarding house. Talking to one of our team or learning through our Property School is a great way to get into HMO investing in New Zealand.

Learn more about this strategy with our mentors and in our online education programmes.

Property development

Development covers a broad spectrum of activities including:

  1. Subdivision (turning a larger piece of land on one title into two, three or many lots, with their own separate titles)
  2. Infill housing (subdividing and then building on the new lots), or larger development projects for commercial or residential property 
  3. Developing sections
  4. Building houses

Our resident property expert, Matthew Gilligan, has developed over 230 sections and built many houses for resale. His expertise in development, strong background in taxation and legal structures, and on-the-job experience in property make him a great adviser to have in your team for planning and conducting property developments and putting your fundamentals in place.

Getting the tax structures right, getting the banking right, and planning the costing and project management are things GRA and NZ Property Mentors can start you off in the right direction with.

Lease options

Lease options are like rent-to-buy arrangements. You find someone (called a tenant-buyer) who wants to own their first home. You enter into a legal agreement whereby they will purchase the home from you for an agreed price, at a specified date in the future, and in the meantime they can live in the property and pay rent.

The lease option contract states that they pay the landlord a market value rent, plus a second payment, called an 'option consideration'. When they are ready or able to, they exercise their option to buy, and you credit them with all the option consideration paid to date.

If you have a house that cost you $250K and they sign it up at $350K, you pick up the margin and their option consideration payment makes the property well and truly cash flow positive all the way through.

If they do not strike the option, you get to keep the option consideration and can do it again with a new tenant-buyer. While they make excellent opportunities to create cash flow, lease options are complicated and you need expert advice before entering into one, so talk to the GRA or NZPM team first.

Taxation and legal structures

Working out the costs involved (including taxation implications and GST), is fundamental to being a good property invsestor. GRA and NZ Property Mentors  can provide expert advice in this area.

We use of a blend of mentors, accountants and good finance brokers, that together make up our clients' team of experts. Using our recommended team de-risks trading and investment, because experience stops you making expensive mistakes.

Identifying all the costs and the likely selling price, is part of the science of property investment, and the Property Analysis Tools in our Wealth Suite are a great way to identify costs. Coupled with experienced people, this significantly reduces risk for investors.

Everything you might be considering doing has been done before. By taking advice from experienced investors who are in the game themselves, you can avoid many of the pitfalls and mistakes that people make. Click here to meet NZ Property Mentors. For taxation, structures and accounting assistance, click here to meet with GRA. 

Why have GRA as your property accountant?

  1. The first key to successful property investment is to be set up correctly for asset protection and tax. This is a specialist area for which you need professional advice. GRA are experts in this field, and can help you structure your investments in a way that minimises your exposure to risk and maximises your returns. This includes forming LTCs, trusts or whatever is the recommended structure. Read more about the asset planning process here
  2. The second key to successful property investment is to make sure the numbers work, and running any prospective purchase past an expert property accountant is highly advisable. It's easy to make mistakes when analysing deals, leave costs out, overestimate the value on completion - especially when you are first starting out. This is where the experienced team at GRA can really help, and coupled with NZ Property Mentors and our Wealth Suite with property analysis tools, you have a complete team to keep you safe.

In general we have fixed fees for compliance accounting, setting up tax structures including LTCs, trusts and companies.

Key tools we use

Wealth Suite property analysis tool

This is a multi-functional tool. It is a paid subscription product, designed and owned by GRA, and licensed to NZ Property Mentors.

  • You can project/forecast your rental properties' results, looking at cash flow, capital growth, yields and all outputs. An essential piece of equipment.
  • You can track your statement of position, forecast your wealth increases and graph when you might be able to retire.
  • We have research tools, like Property Guru that allow you to do a radius search and analyse values in an area, an essential tool for tracking potential values in an area.
  • We have over 80 hours of learning in videos and Property School cloud education.

Click here to review the tool.

Services to help with
your property investing

Client Testimonial

Morning Matthew, Quick note about Salesh Chand. I have been extremely impressed with his actions with regard to the mutual client of ours in Auckland Abrasive Blasting and Coatings 2005 Ltd. He has been a pleasure to deal with, provided accurate information in a timely manner and most importantly is giving the client the right advice as far as I am concerned.  He is very personable and I would certainly recommend his services to any ANZ client. Kind regards
Grant Clune - ANZ Relationship Manager - Auckland South



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