currently our savings get transferred regularly to PIE term deposits and I get over 6%pa interest (6.15 at ANZ and 6.05 at Westpac, split it between the banks to get some safety from that Govt insured deposit of $100k). The PIE rate is 28%. Enough to say this is lower than the personal tax rate, hence the option to go for PIE term deposits as opposed to standard term deposits.

Anyway...

I feel this is not a very happy place for the money, everyone says that, keeping money in the bank is stupid... etc... etc... so I am looking to get a cheap rental unit. I have no intention to still have a mortgage on this investment in 10 years as I do not intend to retire with a mortgage, so it has to be REALLY cheap (or a good balance of rent vs mortgage payments). Mainly this is why I am not looking to invest in a proper standalone house ($800k - $1M at least); I am not looking to make any money out of the rent (like get the rent and spend it), all I want is to be able to say in 10 years time that it was a better place for my savings than the term deposits. Kiwisaver is a disgrace, you put in say $10,000 per year, your fund goes up say $6,000 after one year and they claim they make money for you!!?? They use that $6k to calculate how much your fund went up! The fund value gets up less than you put in and they still calculate a gain, when it is clear they actually lost some of your money?

gold, currency, art, shares, are all out of reach to me as I do not consider I will ever be able to learn or to understand what is needed to make money in that environment. 

Looking at the TradeMe property listings they also show an estimate for rent level and an "Estimated rental yield" . Honestly, I am guiding myself by that yield only. Say my 6.15% from term deposits gets taxed 28% so I am left currently with 0.72 x 6.15 = 4.4% pa after tax. If the "estimated yield" is not at least 5 - 5.5% then I see no reason why I should look at that property, considering the trouble when you start dealing with tenants, etc...

Is this a wrong angle to look at it, which might prevent me from making a wise decision? The capital gain might be there in 10 years, or not, depends what government is in power. Fussy tenants and regulations asking for more and more comfort and maintenance will only add to the costs. And I do not expect value to go up constantly at 5% pa to get that back in capital gain after 10 years... and if the rates go up then my deposit rates go up too. I am not considering inner city apartment, it will be a small 2-bdr unit in West Auckland somewhere.

would you buy an investment unit now, or would you say the economic outlook might be more favorable in 6 - 12 months? To be clear, I acknowledge that "economic outlook" actually means "is the marked going down"? Not what most want to hear but I am looking to buy, not to sell, so...

Thanks.