How to Analyse an Investment Property (Before You Fall in Love With It)

Here's the most dangerous thing that can happen when you're buying an investment property: you fall in love with it. You walk through, you notice the big section, the sunny aspect — and suddenly the numbers start looking better than they actually are. The antidote is a disciplined analysis process.

Step 1: Start With the Gross Yield

Gross yield = (Annual rent ÷ Purchase price) × 100. If a property is listed for $450,000 and you estimate it'll rent for $450 per week, the gross yield is 5.2%. In the current market, anything above 5.5% gross is solid for a regional property.

Step 2: Calculate the Weekly Top-Up

Get realistic about your out-of-pocket costs: mortgage repayments (use current test rates), property management fees (8–10% of rent), insurance, rates, maintenance reserve (1% of property value per year). Then subtract your weekly rent. If you're in negative territory — which most NZ investors are in 2026 — that number is what you're topping up every week.

Step 3: Model the Renovation Cost Honestly

A cosmetic renovation can cost $15,000–$40,000. A structural renovation can blow out to six figures and destroy your ROI. Our AI vision analysis looks at property photos to flag renovation level, roof condition, kitchen and bathroom age — but always get a building inspection from a qualified professional before you commit.

Step 4: Calculate After Repair Value (ARV)

Flip ROI = (ARV - Purchase Price - Renovation Cost - Holding Costs) ÷ Total Investment × 100. Look at comparable sales in the same suburb for properties in good condition. Be conservative — don't assume your renovation adds dollar-for-dollar value.

The Emotional Test

“After you've run the numbers, ask yourself: if these numbers were on a boring grey box instead of this lovely villa — would you still buy it? If yes, you're investing. If no, you're decorating.”