New information from MBIE shows there are 120,330 residential landlords in NZ. Based on our current population size of approximately five million2 that means only about 2.4% of New Zealanders are property investors. Which I suspect is a lot less than most people would think.

The statistics from MBIE showed that most investors in NZ (approximately 78%) only own one rental property, about 16% own between two and three rentals, and landlords with four or more rentals make up less than 6%. That means that less than 0.5% of NZ’s total population own more than one rental property. If you own two rental properties you are in the top 1% of property owners in NZ.

MBIE data also shows that the number of property investors in NZ is decreasing, with a drop of over 10,000 (8%) since 2015. No surprise then that rents are rising due to the imbalance between supply and demand, and the number of people on the emergency housing waiting list is increasing. In late 2019 the waiting list was nearly 15,0003= and the latest figures from the Ministry of Housing and Urban Development show there are now over 22,000 on the list. In my opinion, we need MORE private landlords, not less, or this problem will continue.

Most property investors invest as part of their retirement plan, which I think is admirable, not greedy as some politicians and media personnel would have you believe. You are providing housing for someone who isn’t yet in a position to buy their own home and also ensuring you will be less reliant on future taxpayers to fund your retirement. By improving your financial position, you will be better equipped to help your children into their first homes. With savings account interest lower than the rate of inflation, saving is one of the fastest ways to go backwards financially. If you have equity in your home that you are not putting to its best use, you are missing out on an opportunity.

While buying one investment property is better than not buying any, as a qualified financial adviser, I believe most Kiwis can do better than that. You might think you can’t afford to buy more than one rental, based on what the bank has told you and based on current house prices. If that sounds like you, your assumption could be wrong.

One rental property might increase your equity more than if you just own your own home. But even if it is mortgage free by the time you retire, the cash flow after tax and expenses is only likely to be enough to cover your grocery bill. You don’t need to own lots of rental properties, but you will need at least two if you want to be comfortable financially in retirement. The amount of money you can borrow will be determined by your available equity and the rental return of the property you are looking at purchasing. If you get that balance wrong, you will be severely affecting your potential to buy more than one rental property.

In NZ in 2020 there were 208,384 people with net wealth of more than US$1 million4 or NZD$1.37 million, a little over 4% of the population. To be in the top 1% of New Zealanders for net wealth, you need US$2.8 million (NZD$3.8 million) including the value in your home.

Your personal goals don’t have to be that high, but don’t set the bar too low either simply because you don’t know what your potential is yet. Join me online for a free education event. Register at www.propertyapprentice.co.nz.

Property Apprentice is 100% NZ owned and operated, and is NZ’s leading property and real estate investment coaching program. With their lifetime coaching support program, and no vested financial interest in any property you purchase, they are there to help you to reach your property investment goals.