Setting up your rental

• Getting a deposit, choosing a home loan and extra costs to consider – Look to your property investment plan when choosing a home loan that best suits your goals. Keep in mind some expenses you might need to consider including professional services, insurance, property management fees, maintenance and taxes.
  
  As a guide, we will lend up to 95% of the value of your first owner occupied home, so you can then borrow up to 90% on your first four investment properties. Any more than four properties are reviewed on an individual basis (a Low Equity interest rate may apply). On apartments you can borrow up to 75%.
  
  For more information call the Property Investment Team on 0800 269 009.

• Ownership structures - some of the more common ways of owning a rental property are personally, jointly, in a partnership, as a trust, as a standard company (Ltd) or as a Loss Attributing Qualifying Company (LAQC).
  
  You should get advice from your accountant, lawyer and/or financial adviser before deciding which structure would best suit your plan and your goals.

• Tax considerations – Owning a rental property is like owning a business and with any business, income (in this case rent) is taxable, meaning you will have to complete a tax return each year. Tax laws change at any time – for more information on taxes visit the Inland Revenue website ird.govt.nz or ask your accountant.
  
  
• Gearing & yield – A positively geared property means that the income you receive from your rental property (rent) is greater than all of the costs of owning it (interest, rates, insurance etc) combined. Yielding is the return as a percentage that you will get on the cost of the property after expenses but before tax.

For more information on finances, ownership structures, gearing and yielding, download this section (PDF 81KB) from our How to buy a rental property guide.