How investing outside of Auckland can turn into a 'nightmare'

Just because housing in the regions is affordable doesn't necessarily make it a good investment, a property expert has warned.

With the average price in Auckland somewhere around $1 million, first-home buyers and investors are setting their sights on the rest of the country.

Debbie Roberts of Property Apprentice says while long-term capital growth is always going to be better in the main centres, the regions offer their own benefits.

"In the regions you tend to get better cashflow. If you're looking for an investment property for cashflow, the regions are a great alternative," she told The AM Show on Thursday.

That's because rents are more likely to be enough to cover the mortgage - bringing in cash every week, rather than waiting for a big payoff when the property is sold.

"Capital gain is only one part of the equation when it comes to property investment," said Ms Roberts.

"Yes, it's important in the big picture, but having your cashflow covering your costs is more important. If you've got a portfolio of properties that cover their costs, you don't have to keep topping it up out of your own back pocket each week. It's a combination of balancing capital growth and cashflow."

But while low purchase prices in really small towns might be attractive in the short-term, she says they are a much riskier investment than they might look.

"My advice would be stay away from the small towns with shrinking populations, because over the long-term that doesn't make for a good investment.

"If there's only one main industry in that town and that industry goes broke, there goes your tenant pool."

And with less demand from buyers, getting rid of an empty property can quickly turn into a "nightmare".