RSS Feed

Ryan Smuts: I own a Kiwibuild, how do I make a start at investing in property?

Tuesday, September 22, 2020


If you’ve bought yourself a Kiwibuild property you may find yourself in a position where you’re unable to get additional lending on the property, or rent it out for a certain period of time (often between 2-3 years depending on the development & agreements signed).

While things certainly seem rather restrictive, in reality you’ve just bought yourself ample time to get to a stronger financial position. The embargo period goes by quickly when you are focusing your energy on saving up for a bigger deposit, strategising and paying down your debts.

Once you are free to invest, you have two options (in general) to weigh up:

1. Keep living in the Kiwibuild and buy an IP: You could look at topping up the mortgage on your home with the help of a registered valuation to fund a deposit towards your IP. This is particularly the case for many properties in the current market where prices are appreciating quickly. Many homeowners are finding their homes worth more than what they had paid for. This coupled with any savings and debt reductions over time could put you in a strong equity position to continue borrowing. In terms of serviceability, some lending criteria has gotten slightly easier (depending on financial position) for certain clients, so your serviceability may also be in a stronger position too. It’s worth getting this part checked out by your mortgage adviser if you’re planning on purchasing IPs in the future.

2. Keep the Kiwibuild as an IP and buy yourself a new home to move into: By the end of the embargo period, your Kiwibuild building is likely to still be in very good nick saving you maintenance and repair cost in the long term. Lower operating costs can certainly alleviate the financial and emotional stress on first-time investors. Also, since May this year many banks (not all) are now willing to top up an investment mortgage to 80% instead of the 70% previously giving you a bigger buying power to get into your next home.

Both options have their own merits and drawbacks. I strongly recommend that you take some mortgage advice to determine which is best for you. In the meantime, keep on working and saving hard. Any extra dollar you can put away now will end up being a great help when it comes to borrowing for a second property later!

I’ve been really enjoying interacting and helping APIA investors achieve their goals. If you would like more information or arrange a consultation please do not hesitate to email me at [email protected].


Ryan Smuts 

Ryan is a Key Accounts Manager at Kris Pedersen Mortgages and Insurance as well as a property investor. 





Recent Posts


productivity rent arrears damage travel bubble legal apia covid-19 rent nzpif Sponsored post cash-flow Zodiak Management privacy ventilation shortland chartered accountants data security recycling equity sale and purchase bad tenant shower dome ring-fencing first home buying scotney williams asbestos Investment tip Investor story tenancy issues property value house prices financial advisers act anz cgt TCIT CCC Case study building renovation boarding house wins finance meth insurance development bankruptcy equity ocr mindset rent increase debt enforcement government property inflation Guest blog property maintenance robert kiyosaki capital gain election 2017 positive cash flow daikin initio Kris Pedersen Mortgages and Insurance rtaa2020 mortgage Editor's Choice twg report rent control maintenance ird property cycle auckland lvr HHGA fixed-term tenancy heating holiday house skill shortage Jeff Bezos Standards New Zealand banking property management CoreLogic legal cost housing package water bill opes partners unitary plan early termination property apprentice LIM negotiation kiwibuild short term rental Holler sublease heat pump rental market HHS RTAA 2019 Must knows Must know anti-social behaviour quiet enjoyment principal and interest termination Question and answer interest deductibility market brightline beginner investor buying rules bond housing bubble Gluckman Level 4 Landlording p lab minor dwelling partners subdivision interest only bond form parry v inglis How to Property (Relationships) Act short-term rental sale and purchas education airbnb RBNZ letting market rent warren buffett interest limitation buying worksafe rental wof commerce commission Tribunal case study re agent investor Q&A landlord letting fee election2020 watercare advice rta will trust HSWA khh return ask an expert heater management tenancy services yield winz debt to income personal growth retaliatory notice trespass tenancy tribunal tenant speculator off the plan warm up new zealand auckland council barfoot and thompson rta reform smoke alarm insulation investment strategy buyer's agent Market report trademe inspection cat income relationship gluckman report wealth creation reserve bank clnz extractor fan tax meth contamination interest rates business television structure DTI housing affordability


Introducing Our Partners
Principal Sponsor - Kris Pedersen Mortgages & Insurance logo Gold Sponsor - Barfoot & Thompson logo Gold Sponsor - CoreLogic logo Property Apprentice logo The Insulation Warehouse logo The Renovation Team logo The New Zealand Property Investors' Federation logo