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young people entering the property market for investment

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  • young people entering the property market for investment

    Hi. I have a couple of properties which is enough for me as getting older. I tell my kids they must get into property, not just for a home but as an investment. But with the tax deduction rules changing, it really turns a place quickly into negative gearing. What would you be suggesting to your 20 year old kids in the way of type of investment property. To buy a reasonably new place to enable them to claim on interest once they rent it out means the property probably is limited in the way they can add value. both my kids are looking at going shares in their first place and i will probably help with the deposit (a secured deposit i think it's called). We are in CHCH and would like to buy locally. Who do you suggest we go to for advice? Thanks

  • #2
    No one has any thoughts on property investment strategy for young people starting out?


    • #3
      My 2 bobs worth, is just wait and see for now things are changing quickly, see what 2022 brings from Feb, March onwards I think there could be some turbulence in ALL markets which will affect the property game as well. These brand new town houses (interest deductible) which are being built on every street corner could become a lot cheaper especially if we see a brain drain out of NZ overseas again.


      • #4
        I would not be looking at new townhouses. Way overpriced at the moment. I think the interest deductibility is a bit of a smoke screen. Buy something that has a bit of a twist. ie You can either add extra rooms or open up the layout. A bonus could be a big backyard that you can build on. Land value goes up and house value go down. This can accelerate capital growth, There is also a very useful property group on Facebook that is Christchurch based, You will find some very experienced investors who are willing to share their stories at meetups.


        • #5
          Moving Houses TV series is a good watch. Why not move an old home onto land, do the Healthy Homes tasks and if the land is a reasonable size put two homes on it (eventually) for the 2 incomes.


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          • #6
            Hard question to answer that.
            Can you sub divide any of the land that you all ready have, you keep the old rental and the kids can build on the back ?
            That way, you keep your income, they get the land cheap and can deduct the investment interest, they learn the development process and everyone's a winner.
            Deducting interest might be a mute point in a few years time anyway if the stupid rules get reversed.
            If this idea works on paper, you don't need to rush, rather slowly work on it and see what opportunities come up in the mean time with a possible change in government or rising interest rates forcing sales.
            Who knows?