A Bay couple who bought a property in Mount Maunganui eight months ago say they bought mainly because of its prime location, and it was also a financially viable investment.

Krista Plews and her husband Timothy John bought a 559sq m small beach bach property in Tay St in June last year.

Ms Plews said she and her husband, who own The Paper Plane design store in Mount Maunganui, looked widely before deciding to buy the bach property.

They planned to eventually demolish the house and rebuild a home on the section, she said.

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Ms Plews said they were renting out the Tay St property to three young professionals, who were existing tenants when they bought and were renting another Mount property close to their store.

The bach was at least 60 years old, she said.

Ms Plews said she and her husband bought the bach property at a Eves Reality auction and paid in the high $600,000s which was around market value but had been prepared to pay more.

"One of the reasons we bought it was because it was exposed to the road whereas some other Mount properties are tucked behind other houses and structures, and have no street views.

"It was also important for us to buy a property which was financially viable investment in terms of the prices being asked for at the Mount, and a property we could build a really beautiful home on which had unobstructed views," she said.

"We're both designers so we really wanted to buy something which had street appeal. " Ms Plews said when she and her husband do rebuild it was likely to be a two-storey home which " would possibly give them a view of the ocean.

"We would certainly have gained financially based on the fact that some of the properties in the same area are selling for significantly higher prices now. That includes a slighter bigger property around the corner with no street or ocean visibility going for over $1 million," she said.

QV homevalue Tauranga Registered Valuer David Hulme said well-located Mount Maunganui properties were setting new benchmarks.

"The recent sale of a renovated three-bedroom 1950s bungalow on a 309 square metre section for $905,000 at auction earlier this month is a good example of this."