What would you do in the property market with 300k?(New Zealand)-Young investor

[enemypotato]

Hi Everyone,

I've only been reading MMM since February, but these past few months of financial enlightenment has been an absolute blast!

I'm 22 years old and in my first year out of Uni.
I have a steady job making good money for a university graduate, and that will only climb as i get more experience.

I'm in the fortunate situation where my kiwisaver (similar to the 401k for the Americans out there) has almost 300k in it and I'm looking to make a property purchase soon.
What i'm asking is what fellow Kiwi's think of the current property market, any advice of what people might do if they were in my situation etc etc.

[Faramir]

Congratulations, that's a huge amount in Kiwisaver for a 22 year old. 

I think Kiwisaver money can only be used for a home you'll live in, rather than an investment property, but I may be wrong.  Does that mean it's for a house you'll live in? 

I wouldn't buy a house to live in unless I knew I was going to stick around for at least 10 years, due to the costs of buying/selling (real estate agents fees, LIM report, builders inspection, moving costs etc.).

Also, is it NZ$300K or US$300K?

[nora]

If it is kiwisaver you have, then can you access it for a property purchase? Here is a link which might help https://www.superlife.co.nz/resources/articles-guides/buying-your-first-home-with-kiwisaver

If you decide not to purchase property then as a generic answer with no further info from you, I would suggest opening a Superlife kiwisaver account and investing the lot in index funds. A lot of kiwisaver accounts with big banks have big fees and this makes a big difference to your balance over a lifetime.

If you are considering property then there is a great rent or buy calculator online for nz here http://www.theshapeofmoney.co.nz/general-resources/calculators/rent-versus-buy-calculator.asp
Consider having flatmates in the spare rooms to cut down costs for either option. There will only be certain areas in NZ where buying makes sense. And do you want to own a property in one of these places? That depends on your situation. Renting gives a lot more freedom at a young age when you are building your career and may want to move around for work.

If property is something you decide on, then consider getting a mortgage and using only a small portion of your own money for the deposit, and leaving the rest invested.  See many threads on here about paying off mortgage vs investing. Of course, if you are planning to retire early then it may be to your advantage to get all of your kiwisaver out now to buy a property as otherwise you can't access it until you are old.

If you have debt with high interest rates then paying that off with the money may be the way to go, before investing for a lower return. That is assuming it is not in kiwisaver, and is actually accessible to you now.

[enemypotato]

Hi all, Thanks for your comments.

To fill in the story further;

- I have no student loan
- I will be living in the home, while simultaneous viewing it personally as an investment. I have plans to maximize the ROI of the property.
- I have family that can look after the property if i was away for an extended period of time.
- I am located in Christchurch, NZ
- It is 300k NZD

Is purchasing within the next year a right move for me?