July 10, 2025
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As Kiwis, property is in our cultural DNA as a pathway to security and generational wealth.
But in 2025, house prices have quadrupled since 2000, there are more regulations, and new investment options are on the table.
So it’s reasonable for investors to ask: Is rental property still a good investment?
Our position is that investing in rental property still works – but you need the right strategy, timeframe, and support.
In this guide, we break down the pros, the pitfalls, and where we see genuine long-term opportunity for investors in Auckland.
Always talk to a licensed financial adviser before making any investment decisions, to ensure they’re right for your situation and goals.
If you already own a rental — or know you’re ready to invest — talk to us about smart, stress-free property management in Auckland.
In this article…
- Why Kiwis still invest in property
- The challenges of property investment
- Where investing in property still makes sense
- Investing in property vs term deposits, managed funds, shares
- Choosing to invest in residential vs commercial property
- Where are the investment opportunities in Auckland?
- Who should (and shouldn’t) invest in property
- How property managers protect your rental property ROI
- Answering your questions about investing in rental property
Why Kiwis still invest in property
Even with economic shifts, property remains one of the most trusted ways New Zealanders build long-term wealth.
It’s not just about numbers – there’s something deeply ingrained in the Kiwi psyche about owning land.
- Tangible and familiar: People feel more secure owning bricks and mortar
- Powerful leverage: Use your equity to borrow and amplify returns
- Passive income potential: Especially in retirement or with low mortgages
- Long-term growth mindset: Property rewards patience
This preference for long-term wealth building is echoed by many of our clients:
“We have used Harper Properties for close to 20 years… they have always given us superb service, excellent reporting and tenant selection.” – Google review by Mary Hedges.
The challenges of property investment
It’s important to be realistic about where the market stands today:
- Auckland rental yields average around 4% before costs
- Most investors still top up their mortgage each month
- Healthy Homes upgrades, rates, and insurance push up expenses
- The bright-line test is now 2 years, and interest deductibility is being phased back (80% in 2025, and 100% in 2026)
- Long-term capital growth is steady, but not explosive — around 3–4% a year
We’re not in a golden age of easy gains. But for the right investor, property is still a strong play.
Where investing in property still makes sense
There are still many reasons why rental property remains a smart investment, especially in Auckland.
1. Leverage amplifies gains
One of the biggest advantages of property is leverage. By using equity in your home, you can borrow to fund the deposit on a rental, just like seasoned investors do.
For most investment properties, banks require a 30% deposit, so $200,000 in equity could support a purchase of around $666,000. With new builds, some lenders may accept a 20% deposit, though this depends on your financial position.
A 5% gain on a $666k property = $33,000 in growth – on a deposit you only partly funded.
Leverage can grow your returns faster, but it also increases risk. Before diving in, talk to a financial adviser to understand your borrowing power.
2. Auckland rental demand is strong
Demand for rentals in Auckland remains strong.
Migration has dipped but is still high, with over 110,000 people arriving in the past year alone, and most are looking for homes in the city.
That keeps the pressure on supply in the Auckland rental market, protecting rental income for landlords.
3. Long-term investment logic still holds
The classic “buy, hold, improve” strategy still works — especially in New Zealand’s long-term housing market. Especially with a professional property manager guiding you.
As one overseas-based landlord shared:
“Harper Properties have managed my house for 7 years… especially when I had to initiate the house sale while I am based overseas… they were so very helpful… I’d recommend HP to any landlord wholeheartedly.”– Google review by Eunchim Choi.
Short-term profits might be thinner at first, but many property investors are playing the 15-20 year game. Over time, rents rise, mortgages shrink, and cash flow improves.
Investing in property vs term deposits, managed funds, shares
While shares and managed funds can outperform property in percentage terms, property lets you use the bank’s money to multiply gains.
| Investment type | Average return (pre-tax) | Liquidity | Leverage potential | Risk profile |
| Term deposits | ~4.5-5.2% | High | None | Very low |
| Managed funds | ~5-7% | High | None | Moderate |
| Shares | ~8-10% | High | None | High (volatile) |
| Property (leveraged) | ~4-6% + long-term gains | Low | High (up to 80%) | Moderate (cost-intensive) |
Bonus: your tenants help pay the mortgage.
Choosing to invest in residential vs commercial property
Some investors are turning to commercial property for its higher yields, but it comes with bigger risks.
Let’s break it down:
| Residential property investment | Commercial property investment |
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Harper Properties’ long-term commercial clients also appreciate our consistency and care:
“Harper Properties have been managing our commercial properties for over 5 years. They always provide competent staff who do a fantastic job.” – Google review by Ryan Balemi.
For first-time or time-poor investors, residential property investment still offers a more accessible path.
Where are the investment opportunities in Auckland?
Based on rental data, affordability, and our on-the-ground experience, we often recommend:
West and South Auckland: the affordability corridors
West Auckland suburbs like Glen Eden, Te Atatū and South Auckland suburbs like Māngere and Papakura offer a strong balance of:
- Affordability (lower buy-in prices)
- Capital growth potential (proximity to city)
- Higher rental yields (compared to central suburbs)
New builds for passive investors
Townhouses in these areas are often built to Healthy Homes standards, are low-maintenance, and appeal to tenants.
They suit those seeking a long-term, low-touch investment.
Value-add properties for hands-on investors
Converting a standalone home into a multi-income property can improve both cash flow and value.
Talk to a property manager in your area to understand the code compliance and cost requirements upfront.
Who should (and shouldn’t) invest in property
Investing in rental property might be right for you if:
- You’re ready to invest for the long term (10+ years)
- You have usable equity or savings for a deposit
- You prefer tangible, income-generating assets
- You’re happy to outsource property management
As one first-time landlord put it:
“They made the process very smooth and easy and found us a tenant within 2 weeks… I also like the one commission fee that covers everything.” – Google review by Ken.
Investing in rental property might not suit you if:
- You need fast or guaranteed returns
- You don’t want to deal with tenants or compliance
- You’re already over-leveraged
- You’re more comfortable with diversified or passive investments
How property managers protect your rental property ROI
Partnering with an experienced team like Harper Properties can make all the difference. We help you:
- Maximise rental income with market-aligned appraisals
- Attract and retain great tenants
- Stay fully compliant with changing legislation
- Handle inspections, maintenance, and emergencies
- Avoid vacancy risks with proactive marketing
And with our transparent pricing, there are no surprises. Just straightforward support from people who care.
Rental property is a solid investment – if done smartly
Rental property remains one of the few investment vehicles where you can borrow, earn, and grow wealth with a relatively predictable asset.
But in 2025, it takes planning, patience, and the right team.
Want to find out if it could work for you? Request a rental appraisal or talk to a Harper Properties property manager.
Answering your questions about investing in rental property
Is rental property a good investment in 2025?
Yes, but only with a long-term view. Rental yields are lower than they used to be, but with smart management, strategic property choice, and patience, rental property can still deliver both income and long-term gains.
What is the average ROI on rental property in Auckland?
Net yields in Auckland are typically around 4.2%. ROI increases over time as equity grows and mortgage repayments reduce.
Many landlords also gain value through capital growth, but that has slowed in recent years.
Is property investment still worth it compared to shares or funds?
It depends on your goals. Property is illiquid but tangible and leverageable. If you’re after a passive, physical asset and long-term return (especially with professional property management), investing in rental property can still be a strong option.
What are the biggest risks of rental property investment?
The main risks are:
- Vacancy or tenant issues
- Unexpected repairs or compliance costs
- Interest rate rises
- Poor property selection
But these risks can be managed with professional help.
How can I make rental property a more passive investment?
Work with an experienced property manager who can handle:
- Tenant selection
- Maintenance and inspections
- Rent collection and compliance
Explore our services to see how we help investors stay hands-off while maximising return.