If you missed Enableme and Opes Partners’ Buying Property Like a Pro seminar, here are some top tips to get you thinking

These days it seems like you can’t go anywhere without people discussing the housing market. How hard it is to get into it, how much money people have made off it, and who is moving to another part of the country because they simply can’t afford it.

Home ownership is considered key to the Kiwi Dream, but it is also used as a way to realise other dreams because of the way housing can work as an investment.

Not because the capital gains are currently (usually) tax free, what really distinguishes property from other forms of investment is leverage.

You put up 20% (or 40% in some cases) of the purchase price, the bank puts up the rest, but you get to keep 100% of the gains. You can’t do that easily with the share market anymore – this is not the 1980s!

That said, property is not risk-free or a one-way bet. You can be affected by bad tenants, gaps in tenancy, big maintenance or repair bills and interest rate rises to name a few.

Property should be treated with the same degree of caution and consideration as any investment and you should seek appropriate advice. But here are a few rules of thumb to keep in mind.

• Don’t buy a lemon. Seems obvious, but there are more lemons out there than worthy property investments, so you need to know how to buy right
• Understand the numbers. Some properties will get you a good rental yield, but cashflow often has an inverse relationship to capital growth potential. It pays to aim somewhere in the middle of this ‘cashflow spectrum’.
• Interest rates will rise. It’s not a case of ‘if’ but ‘when’
• Property investment (as distinct from property speculation) is not a get rich quick scheme, you need to assume you will hold the property for at least 10 years.
• Understand your own financial situation and your tolerance for risk. Do you have money left over after you’ve paid all your bills? If your cash surplus is low, your tolerance for risk is low. If you have less than 10,000 a year surplus, now is probably not the time for you to buy property.

If you missed Wednesday’s seminar with Hannah McQueen, founder of Enableme and Andrew Nicol from Opes Partners, it will be up on the Enableme website for a limited time.