[jumpingjackflashman2]

Hi Folks, Is It Viable To Buy More Than One Property And Rent One Or More Out? What Is The Rental Market Like Over There (wellington Particularly) Here, I Could Buy A House For £100k And Rent It For 6 - 7k Per Annum. If I Bought A House In Wellington Area For $150k What Rent Could I Expect?

[GeorgeM]

Having one or more 'investment properties' is a very common way of investing for kiwis. Because of the high level of house price inflation over the last couple of years many people have got into this, often negatively geared (paying more in mortgage than they get back in rent hoping to compensate in capital gain), and this has led to a bit of a glut in rental properties.

It is very unlikely at the moment that you would be able to buy a property and cover a full mortgage with the rent paid to you - probably half cover it would be more like it. There are some tax benefits that you can take to ease the load, however. You can depreciate the buildings part of an investment property's value by 4%pa, and if you hold the property under a LAQC (Loss Attributing Qualifying Company) you can offset the company's loss against your personal tax which at least brings the annual cash flow incomings and outgoings a bit closer together.

And at the moment there is no capital gains tax on the sale of investment properties, so if you do turn a profit over time you get it tax free (although you do have to pay back the value of the tax benefit you have had from depreciating the property).