Investing in Hamilton 101: Our best advice for newbies and seasoned investors

First things first, as a new or seasoned investor, you should join our Investors Club. 

Your go-to source of information, the Lodge Investors Club has all the tips and resources for everything related to property investment in Hamilton.

As an investor, it can be hard to tell what the right property is and what features to look for to maximise your returns. When you become a member, you’ll receive the latest insights on the Hamilton property market, advice from industry experts, and my personal recommendations on investment opportunities new to the market.

Debt-to-income (DTI) ratios have recently been restricted by the Reserve Bank. DTI ratios link your income to how much you can borrow to buy property, and the current ratio for investors is that you can apply for lending up to 7x your income. 

Determining your DTI ratio as an investor can get complex if you have other mortgages (from other properties) you’re also paying off. This debt, plus any other debt you have, then becomes part of the equation, as well as the gross yield of the property you intend to buy. We’d recommend getting in touch with a mortgage adviser to work out what you can borrow under the new rules.

New restrictions on loan-to-value ratios have also changed, lowering the amount of deposit needed to buy an investment property. LVR measures the amount of debt a property has compared to its market worth, and the LVR restriction is where banks can only lend within a certain LVR. Investors now need a 30% deposit, instead of 35%, to purchase an investment property. 

It is worth noting that the DTI and LVR restrictions do not apply to new builds.

You can learn more about these restrictions here.

Rental yield is indicative of the cash flow a rental property will generate over the cost of purchasing the property. If you want to use your investment to generate a day-to-day income, rental yield is a top priority. If you’re interested in making long-term gains, yield is still important, however, you should also consider a property’s capital gain potential. 

In general, apartments and flats offer better yield than houses, but houses tend to generate better capital gains in the long term. As a rule, it’s a good idea to diversify your portfolio with more than one type of property as it can help protect your assets from a changing market.

Read more, and learn about the top 5 Hamilton suburbs for rental yield, here. 

Get to know the areas of Hamilton that are popular with tenants. Right now, we’re seeing huge expansion across the whole city (we are the fastest-growing city in New Zealand after all), but there are certainly areas that resonate with tenants the most.

As a guide, suburbs that contain easy access to amenities and schooling are universally popular. We’re seeing areas with new builds and townhouses such as Peacockes to the south of the city, and Rototuna and Flagstaff to the north, becoming increasingly popular thanks to their easy maintenance and lock and leave aspects.

1 July 2025 is the deadline for which all investment properties must adhere to the national Healthy Homes standards. This means minimum standards must be met regarding heating, insulation, ventilation, moisture and drainage, and draught stopping in rental properties. It should be noted that this is a very real standard, and the standard will be enforced with heavy financial consequences for those found not adhering to it.

At Lodge, our compliance level is sitting at 80%, and we have a strict plan in place to meet 100% well ahead of the official deadline. As a landlord with us, we’ll make sure your home fits the standard – we’re big believers that all tenants deserve warm, dry homes to live in.