We’ve found this in Auckland, Christchurch and Wellington.

On top of that, properties in good school zones don’t sell any faster, or attract a premium rental yield.

So again, it’s one of the things you may pay for, but don’t get an outsized return from.

#5 – Storage

Tenants care about storage. Everyone needs enough space to store their stuff.

But tenants don’t typically need as much space as homeowners.

Here’s a true story to demonstrate what I mean.

I was talking to an investor. They were looking at a 3-bedroom townhouse with a car-park.

With a straight face they asked: “But where will the tenant store their jet ski?”

The answer is – most tenants don’t have jet skis.

Some homeowners pack their garages with toys, bikes, and boats.

Generally, tenants don’t have these. They’re at a different stage of life so their storage needs are different. Although if you’re looking at New Build, remember they usually have more storage than you think.

For example, modern kitchens are designed to maximise the amount of storage available. There are often cupboards above the sink, below the sink, and below the kitchen island.

This isn’t always immediately obvious when looking at a floor plan.

What’s the harm in buying an investment property with a few extra features?

I hear you. There are some people who think: “If I can afford to pay a little extra for some nice-to-haves … why shouldn’t I?”

There are two main reasons –

#1 – It will affect your return

The more features you add to a property, the more expensive it will be.

Higher priced properties tend to have lower yields.

All these extra features make your property more expensive, but they can decrease the return you get.

A more expensive property fetches a slightly higher rent, but it’s often not enough to make it worth the extra spend.

#2 – It stops you from building a portfolio

Here’s the other harm. You go after all these features and spend more money, but then you’ve got one expensive property rather than a couple of affordable ones.

That can make it harder to diversify your portfolio, so you’re stuck with a lot of money invested in one property market.

For instance, we worked with one investor who was looking at investment properties.

Then went on holiday to Wanaka and ended up spending $1.4 million on an investment property there. No doubt, it’s a beautiful home. But the owner now has a large mortgage with a poor rental return.

The issue is that they now have one property in Wanaka rather than two properties in different parts of the country. That means they’ve missed out on the opportunity to spread their risk.

What property should I buy?

The key message isn’t to buy a property:

• With no sunlight
• right next to a Kāinga Ora house
• that is tiny
• in a bad school zone, and
• has no storage.

The point is to ask “where should these be on your priority list?”

And before you consider any of these factors, you’ve got to first ask yourself:

• Does this property get a good rental return?
• Am I going to be able to hold onto it for the long term. Does the cashflow work?
• Is it affordable for my tenants?

These other factors can distract you from making a good investment decision.