Stephen Knight

Now, to be fair, some of that difference in asking price is because we actually tend to see more home and income properties in Auckland.

And of course, Auckland properties tend to be more expensive than the average in New Zealand.

If we look at a suburb by suburb comparison about like normal property versus home and income,

it's about an extra 10% for home and income properties.

Now, if your average property in Auckland costs a million bucks or just over, add an extra 10% off and you do get to that kind of 1.15 million average that Andrew was talking about.

What are some of the other potential downsides?

And then as I mentioned before, if you are buying a property, like a block of five flats, call it,

Typically, who are you going to sell it to?

Again, it's going to be an investor.

It's going to be valued based on the rental increase as opposed to house price increases.

If I think about the average rent increase in New Zealand, it's been about 4% per year.

House price growth has been about 6% per year.

So that's the reason why we talk about the difference between yield properties and growth properties, because there does tend to be a difference.

And now we've gone through the pros and cons, I really want to look at an example to see what the returns look like.

Because I know that you recently ran some numbers for an investor who was looking at a property in Queenstown.

What did you find?

Now, that might be appropriate for this specific investor if they're a bit younger, they're planning on making more money out of the house price going up as opposed to the rental yield right now.

But if this person was, say, 65 or 60 to 65, transitioning

into making their golden goose, the golden goose strategy we often talk about on the show where you're living off the rental income for your properties, then that's probably the appropriate stage where you'd look at something like this.

I suppose the key message here is that a property might be a good property, but is it going to be the right fit?