How will rising real estate prices affect my investment?

News that Auckland real estate prices have soared by an average of 33 per cent in the past three years is heartening for investors who are interested in capital gains over the long-term.

But we also know from basic economics that rising real estate values could result in shrinking rental yields over time. What does this mean for investors?

For those who want to own investment property that is 100 per cent leveraged, it means they will have to dip deeper into their pockets to 'prop up' their investment.

While this isn't necessarily a bad thing on its own, prospective buyers will need to make sure that they carefully consider the affordability of any investment they choose to make, as well as the returns they are likely to gain from it.

This is why the right New Zealand real estate investment advice is crucial. The best advisers are always tuned into the latest property trends – they know how to analyse past performance to predict future yields, and can also help you build your portfolio carefully in a way that protects and grows your wealth.

If you already own – or are about to own – an investment property in Auckland that is experiencing a lot of growth at the moment, remember that this is good news in the long-term.

But it is also important to keep your commitments manageable, which is why you should keep a good amount of equity in it before you invest in another property.

Investing in property is not something you do everyday, and whether you are just starting your portfolio or adding to it so you can build wealth for the future, it's only natural that you will have questions about the process.

Your adviser can give you the information you need to make smart and manageable decisions about investing in Auckland real estate – the team at Goodlife are more than happy to help!

Here's to your financial independence!

Daniel Carney
Authorised Financial Adviser / Investment Property Expert