Plenty of people in New Zealand have invested in rental property for various reasons. For some it is to fund their retirement years, for other it is a business which provides their living while others use rental property as a means to provide for their children's university education. Whatever your reason for investing in property, you need to make sure that your investments are safe and that they are fully up-to-date with tax obligations. If you do not have properly established ownership vehicles you may be in for a nasty surprise.
There are lots of different ways you can own, control or manage rental properties but that gives rise to plenty of opportunities for mistakes that the IRD is increasingly chasing after. It is essential that you are set up correctly otherwise you could discover that your investments do not provide enough income for your pension or you are paying too much tax. So before you sign an agreement with a real estate agent you should speak to a property accountant about property investing. We are a small business ourselves, and we specialize in small businesses like rental properties, sole trader/owner operators, contractors, partnerships and limited companies staff excluding the owners. The whole taxation system with all its laws is so vast; no accountant could be an expert in all areas.
Generally speaking, residential rental property investment is a long term and low risk investment. Gross yields vary according to the type of property and the affordability of housing in general. As a rule of thumb a good residential rental property investment should have a gross yield in excess of the average floating interest rates. A property will be cash flow positive before tax if the rent received exceeds cash expenses including interest, rates, and maintenance and property management fees.
Rental property investment is a long term strategy to create financial independence. Being relatively low risk, with regular and reliable income, and with values and income yields generally inflation proof property investment is suitable for most retirement plans. While based in Auckland, we specialize in providing Rental Property Accountant New Zealand and overseas based property investors investing in New Zealand property. We offer expert tax advice and reliable accounting services. Our personal approach ensures that you get the great service that comes from being an important client.