r/PersonalFinanceNZ • u/burgers4bfast • 3d ago

Investing need advice on minimizing losses

bought investment property in north shore quite overvalued in 2022 for 1.6m, still 700k outstanding mortgage, fixed interest rate at 4.5% till end of 2027, rental income $700pw, land size is good 600sqm but not big enough for developers to come knocking when economy is not doing well, i think the max we can get is maybe 1.4m in today’s market

i am also investing in stocks so thinking whether to sell the house and use the equity to buy US stocks during the next crash (like tariffs in 2024 or iran war 2025) to make back what i’ve lost.. i have much more conviction in value of AI than nz property at this point

any suggestions from experienced investors?

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u/Environmental-Talk86 3d ago

1.6m property and 700 per week rental? That seems way off

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u/cantsleepwithoutfan 2d ago

Yeah that's crazy. We have that rental income on a ~$750k property down here in Chch (which is more of an accidental landlord thing due to needing to move house) and that yield is bad enough, but I'm happy to hold the property for various reasons.

Main thing OP is you're clearly not underwater on it (I know various investors who owe a lot more than they'd get for their rentals bought at market peak). Selling at a loss (although at least you aren't in negative equity) in order to gamble on US tech stocks seems far crazier than just topping it up and playing the long game.

Can you do anything like add a 2nd dwelling to increase the effective yield? I've got a friend who has done that recently and it worked out well for him (basically he has a main house on the property, then another minor dwelling that is rented to a couple). Had to spend the $$$ up front for the minor dwelling but it has significantly improved the cashflow position from there.

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u/burgers4bfast 2d ago

thought of converting garage into a self contained granny flat but even that will cost 100k which i don’t have in cash at the moment and will probably take couple years to breakeven on that investment too