Recently I read an article by a well known property expert who stated recently that you should not be investing in real estate unless it had a 10 per cent net yield. – forget about anything at the Mount then.
Another very well known author stated that you should only invest in anything for the yield and if you expect anything else you are not an investor, you are a speculator – don't invest in Tauranga Mount Maunganui then just in case you're deemed a speculator instead of investor.

I also read that in Australia, research from BIS Shrapnel are suggesting that house prices will rise by nearly 20 per cent in the next three years. Based on the average house price in Australia this would add more than $100,000 to the average house price. According to the article in The Herald Sun, BIS Shrapnel indicate that house prices will rise by three per cent this financial year and eight per cent in each of the following years due to a shortage of dwellings and the soaring population which were combining to create the perfect environment for property investors. (According to the author in the paragraph above that kind of information is irrelevant because you should only be interested in yield.)
And so it is with no wonder that people become confused and disillusioned by the real estate investment market.
In my opinion, real estate makes a great investment, as do shares, managed funds and fixed interest. However, real estate is one of the easiest investment classes for us to understand because we all live in a home of some description and so we can relate to real estate.
We also find it pretty easy to understand things like the relationship between why real estate will increase in value in one area, suburb, town or city and it won't in another. After all it's pretty easy to answer this question when it is posed to you, "Which town or city will increase in value faster over the next 10 years, Mount Maunganui or Tokoroa?” Compare that to trying to figure out why those Telecom shares won't go up.
We also understand why we have to pay more rent for something on the beach front at the Mount than we do for something in say Te Puke and so real estate becomes an easy investment for most people when compared to the whys and wherefores of company shares for example.
So why is it that so many of the experts and commentators in the industry try to make property investing so difficult? Most of us have bought a home and then sold some years later for an amount that is greater than what we originally paid, so that we can move to another home. We made a profit. Now imagine if someone was paying our mortgage off over that period of time via rent and tax benefits, so that it cost us very little to own – so far so good. And then when we sold it we walked away with all that profit. Wow, that sounds pretty good to me and I can't see what has to be so complex about the whole scenario.
Sure there are some details that need to be determined such as whether you need to buy your property in your name, a company or a trust. You need to determine whether the property should be a high yield, high capital growth or a mixture of growth and yield type property (Think Tokoroa, beach front Mount or suburbs Tauranga) and you might want to consider what type of lending structure you need, but other than that, real estate does not have to be confusing, it does not have to be difficult and you certainly don't have to be getting 10 per cent net from a property to make it work for you.