After nearly two decades running Indian grocery stores, Rajesh Thakkar sold up in 2018 when his wife, Smita, was diagnosed with cancer. Encouraged by her, he turned to property investment.
“My wife said, ‘What are we going to do, just sit around?’ She was the one who pushed me into property, buying a rundown house, refurbishing it and renting it out.”
That first Auckland house became the start of a portfolio of developments – some retained as rentals, others sold for profit – with another project under way.
ANZ Home Loans Manager Rong Qi showed Rajesh how to use equity in the properties he already owned, forming the foundation of his strategy.
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Equity is the difference between a property’s value and the mortgage still owed. “If you own a property for a number of years, the chances are the value will go up, and that increase in value is called equity,” says Rong. “Many investors use that to purchase another property without needing to sell their current home.”
One common misconception, Rong says, is not knowing your property’s current value. “They might have bought for $600,000 five years ago and still think it is worth that, when it could now be $1 million. That difference is equity, and it could help them buy their next property.”
Homeowners can access equity in several ways. “You could do a top-up on your existing home loan, or take a new loan to buy the next property. It depends on your situation,” says Rong. Under current Reserve Bank rules, borrowing is generally limited to 70% of the value of an existing investment property, with exceptions up to 90% for a brand-new build.
“You could do a standard top-up with principal and interest repayments, choose a flexible facility like an overdraft, or take advantage of our 10 years' interest-only repayments option,” he explains.
Affordability still matters. “We’ll need to assess your income, financial position and debts before approving a top-up. And before you go ahead, talk to your accountant or lawyer so your lending is structured well for you.”
As an ANZ Mobile Mortgage Manager, Rong meets clients wherever it suits them, including after hours, at their workplace or online. He’s committed to making the investment property buying journey as smooth and accessible as possible, so clients can focus on finding the right property with confidence.
There is demand from both seasoned investors and first-timers. “Mum-and-dad investors often think about their children’s future and see property as a way to provide for them. We help them match their budget to the right area and property type.”
Rong advises buying in areas you know and avoiding deals that seem too good to be true without checking demand and rental trends. He says the market has been recovering since late 2023. “We still have population growth and housing shortages, especially in Auckland, so long-term demand could remain strong. Rental returns of around 3 to 4.5%, and in some cases 5%, may be attractive compared to other investments.”
Recent Government changes have added to the appeal. “Changes to the bright-line test and interest deductibility have definitely increased interest from investors,” says Rong. Since April, all residential rental properties are eligible for full tax deductibility, with new builds meeting Healthy Homes standards from day one.
“I have learnt that property is a long game,” Rajesh says. “It is about making smart choices with the right advice, and equity has been my way forward.”
With recent rate trims borrowers can access more flexibility to explore options in today’s changing market.
“Come talk to us,” Rong adds. “Equity is only useful if you use it wisely.” He says buying a rental property is one of the more common ways people use their existing equity, and that there are no obligations when speaking with an ANZ Mobile Mortgage Manager.
Rajesh believes his late wife would be proud. He is now exploring broader opportunities. “Some of my friends have invested in Queenstown… there is a lot of development going on there,” he says. He is also considering whether investing there could be an option for him.
Thinking about investing? Start by finding out how much equity you might have, understand deposit requirements, talk with an ANZ Mobile Mortgage Manager or visit anz.co.nz/personal/home-loans-mortgages/investment-property/.
ANZ lending criteria, terms, and fees apply. Minimum 30% deposit may apply to property investment lending. This material is general nature and is for information purposes only. The opinions in it are not financial, investment or tax advice. Please talk to ANZ if you need financial advice about your situation and goals. See ANZ’s financial advice provider disclosure at anz.co.nz/fapdisclosure.
