1. Property Hoarder

There is nothing wrong with holding onto good quality investment properties.

The mistake here is when the property you are holding onto is of poor quality.

There are two indicators of poor quality investment properties, poor yields and not bank friendly.

A rental property with a rental yield of 2% is not ideal.

You should consider selling that property & purchase a higher-yielding property.

For Auckland, a rental yield of 5% is ideal.

Non-bank-friendly property include hotel units.

Generally, banks may only lend you 50% of the purchase price.

If the purchase price is $300k, you will have to come up with $150k.

You can buy that hotel unit for $150k, or you can purchase a $750k newly built townhouse.

The latter may be a more valuable asset & can help you reach your goals quicker.

2. Running The Numbers With Old Figures

For example, you purchased a property for $800k.

It has now appreciated to $2.2m.

That property brings in $45k in rental income per year.

Using the purchase price, the gross yield comes to 5.6%.

Which is great.

However, when using the current value of the property, which is the figure you should be using, the gross yield comes to 2%.

In this case, you should consider selling the property & purchasing a higher-yielding one.

3. Bank Monogamist

The third mistake Kiwi investors make is having all their lending with one bank.

What does this mean for investors?

Having all your lending with one bank generally means you can’t borrow as much & your home is less secure.

If you are unable to pay the mortgage on your rental property, the bank can sell your home.

In short, having all your lending with one bank hinders your ability to grow your portfolio quickly & forces you to become more cautious as you’re worried about your home.

4. DIY Dealer

Many Kiwi investors manage their own properties.

They don’t utilise property managers to save money.

By managing the properties yourself, additional investment properties means more work for you.

Your focus should be on growing the portfolio, not on managing the property.

5. Not Keeping Up With The News

If you’re looking to enter the markets or you’re already in the market, you must keep up with the news.

Why? :

• Provides you with insights for making informed decisions about buying or selling

• Keeps you aware of government policies & regulations affecting the housing market

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