Property investment still makes sense, expert says - The Prosperity Project

Many commentators suggest property investment is dead – killed off by high prices, rent constraints, regulatory changes, lending challenges, and little capital growth.

But one high-profile investor argues it’s still alive and kicking, if you do it right.

“Capital growth doesn’t pay the bills,” Ilse Wolfe told Nadine Higgins on The Prosperity Project podcast. “You can’t eat bricks.”

After two decades as a property investor, which included surviving negative equity and punishing interest rates early on, Wolfe believes property investment still stacks up, but only for those willing to rethink traditional strategies.

“I do believe that yields are relatively dead,” she says, pointing to high purchase prices and affordability constraints. But rather than abandoning property, she argues investors need to find ways to create value, rather than sit and wait for capital gains.

“What can I do to manipulate this building to force appreciation and value and the rental cash flow?” she says.

Her strategy focuses on older homes, where small, strategic changes can dramatically boost returns, like reconfiguring the layout to add a bedroom.

“In many cases, we could be going from a $500 per week rent to $750 per week.”

She aims for renovations to be cosmetic and completed within six weeks – ideally not requiring council consent.

While she rolled up her sleeves to DIY it in the early days, she says she’s now off the tools.

“After three or four of those, you start to get pretty fatigued. I’m still getting the benefit of the renovation, but it’s not me doing it.”

She also looks for properties with further potential to generate a gain.

“My favourite repayment plan is being able to subdivide the land off, sell off that section, and pay off the original debt from that purchase.”

Ilse also challenges the belief that owning your own home is always the goal. She recently sold her central Auckland home, instead opting to rent a high-end beachfront property that would cost “five times the rent we are paying” to service a mortgage on. That cash, she says, can be better deployed into income-generating assets.

She argues property investing isn’t dead, but passive property investing might be.

“I want to dictate or determine my own outcomes,” she says.

Watch or listen to the full episode of The Prosperity Project for more.

The Prosperity Project is hosted by Nadine Higgins, an experienced broadcaster and financial adviser.

Follow the show at iHeartRadio, Apple Podcasts, Spotify or wherever you get your podcasts. New episodes are released every Monday.