Building an Investment Property
If an investment property is part of your long-term plan, have you considered building instead of buying?
New builds make great rental properties and can help to reduce your initial costs and ongoing maintenance.
Building an investment property
For many Kiwis, an investment property is an important part of their long-term financial plan. While purchasing an existing property might seem like a quick and easy option, there are plenty of advantages to building instead of buying.
The advantages of building to order
When you build a new property, you can choose the perfect size and number of bedrooms for your budget and your ideal tenants. This helps to keep costs down, as you aren’t paying for space you won’t use. There’s also still significant value in building compared to buying, even when you take increased land prices into account.
Building also removes the risk of purchasing a property, then discovering costly issues in the future; you’ll know exactly what you’re getting, from Day One.
Healthy Homes compliance
New Zealand’s Healthy Homes standards are designed to ensure that rental properties are warm, dry, and safe for tenants to live in. Older properties often need significant upgrades in order to meet the standards, and it’s the landlord’s responsibility to cover the costs.
Today’s building standards mean that all new homes are built to meet the Healthy Homes requirements, so you won’t need to spend additional time and money getting your property up to scratch.
Lower maintenance costs
Maintenance is one of the biggest ongoing costs for investors. New homes require less ongoing maintenance in general, and you can also make some smart choices during your build to keep your long-term costs down.
Choosing durable appliances, fittings, and finishes throughout the house will reduce your maintenance costs over time. Here are some key areas where your build choices can have a significant impact on your long-term costs.
Appliances
Your appliances don’t have to be top-of-the-line, but we also don’t recommend choosing the cheapest option; instead, go for a mid-range brand that’s known for reliability and won’t cost too much to repair. As an added bonus, your appliances will be under warranty for the first few years, providing another opportunity to save.
Bathrooms
The biggest decision in the bathroom is choosing between a tiled shower, or an acrylic and vinyl option, and both have their advantages. Tiled showers will last longer, but will be relatively expensive to repair or replace. Acrylic and vinyl showers don’t have the same longevity but are much cheaper to replace.
Carpets
We recommend choosing a good-quality, medium-spec carpet – ideally a solution-dyed nylon, which will stand up to wear and tear better than wool or polyester. Avoid a high-weight carpet as it will show patches over time.
Cladding
Cladding is an area where you can make some significant savings, without impacting the overall value of your property. Brick cladding is a good option for investment properties; it’s low-maintenance, and still looks good without frequent cleaning (unlike plaster or linea painted houses). Brick is also more durable than timber cladding, and more affordable than stone.
Door handles
Door handles are often overlooked, but they get more use than almost anything else in the house! Don’t skimp on your door handles; choose solid handles that you won’t have to replace every few years.
Kitchens
Kitchen benchtops will see frequent use, so you’ll want to choose a durable option. Stone and stainless steel are both practical choices that will last longer than laminate equivalents.
Outside areas
While it can be tempting to add decking to your outdoor areas, concrete is a better option when it comes to managing cost. As well as reducing the initial build cost, concrete is incredibly low-maintenance, with no restaining required.
