Property Investor
Fill out the form and receive a personalised and complimentary report sent to your email offering you a better insight into your current property portfolio.
WHAT’S AN INVESTMENT CAPACITY REPORT?
The Investment Capacity Report has been designed and developed to help you understand where your weaknesses and strengths lie with your current personal balance sheet (accounting speak for “what you own and what you owe”).
When we combine that with your personal and rental income, it is easy to form a picture of where your strengths lie regarding your borrowing power and the type of property that is best suited for your next purchase.
You will be stronger in one of two categories;
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Income
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Equity
Based on this report we can advise you on the most suitable property for your situation to prevent you from running out of buying power in the future.
INCOME - YOUR DEBT SERVICE RATIO (DSR)
Your bank will assess your personal and rental income and use both today’s and forecasted interest rates to calculate how much debt you can afford to service. Most banks use 35% of gross personal income and 75% of rental income to calculate your DSR (maximum debt you can service with your net income). This percentage can vary for lower/higher income earners.
When we create your Investment Capacity Report, we calculate your current borrowing power using your current income and help you understand the type of property you need to buy next, based on your circumstances. If you are weaker on income (DSR) than equity (LVR), then buying higher cashflow, higher yielding properties in locations where rents will appreciate faster is a key strategy.
EQUITY - YOUR LOAN TO VALUE RATIO (LVR)
Your bank will assess your current equity based on your usable cash savings, your KiwiSaver account, First Home Buyer Grant (for First Home Buyers), and the equity you have in both your personal and investment properties. Banks will typically lend to 80% on personal homes (90-95% for First Home Buyers), 80% on brand new investment property and 60% on second hand investment property. These percentages can vary based on how much lending you have with a single bank and the locations your properties are in.
When we create your Investment Capacity Report, we calculate your borrowing power based on your property values, mortgages and cash savings and help you understand what your buying power is. If you are weaker on equity (LVR) than income (DSR), then buying at a discount, early stage in a project or properties in locations where values will appreciate sooner/faster is a key strategy.