Renters United, a tenancy advocacy party based in Wellington sparked a new discussion on PropertyTalk recently; namely their recent pre-election initiative asking all political parties to respond to questions on their housing policy.
The answers were then published in traffic light summaries with links to each party’s full response on the website. It was a clever initiative and it got the respect to property investors Renters United for the initiative and it generated a new discussion on just where the (WOF) warrant of fitness for houses should and could go and how some of the tenant desired recommendations would impact on tenants and landlords if they came into law.
In law now is the fire alarms and insulation requirement and like most property managers a spokesperson at Pedersen’s Property Management said their landlords are up to speed on the Residential Tenancies Amendment Act 2016’s insulation and fire alarms requirements with most already complying in some form or another.
Rental property investment in New Zealand has evolved and matured over the years with the majority of landlords using a third party property management firm to manage their rentals from tenant selection, to the tenancy agreement, lodgement of bond and regular property inspections.
Arguably it’s a very small percentage of rogue self managing landlords with rental properties still below par. There are of course Investors whom have been caught out with older housing stock but so has Housing NZ.
Getting back to the property investors response to Renters United wish list – a PropertyTalk forum member has all the answers:
Here’s my response to any changes or what I’m anticipating as a Landlord.
1#Rent increased to 1 per year
No big deal if you were planning on increasing the rent by $10 every 6 months. No problem increase rent by $20 for the year -problem solved.
2# Long term tenancy
This is a good thing, the longer you have a tenant the less vacancy the better the return on investment.
Again no big deal, we have all made capital over the past few years a $10k investment isn’t going to break the bank…think long term.
4# Capital Gains Tax
Let’s say you make $100k in capital and Jacinda wants her $30k…that’s fine, be patient wait until you make $150k in capital, there’s your $100k..and look to Oz (Australia) they work it into the sale price.
5# Getting rid of negative gearing
This will not affect landlords already in the game because (I suspect) it will not be implemented for 5 years (if at all ) and that’s enough time to raise rents; pay down debt or increase equity to at least break even or turn a profit. .
As for new investors in 5 years? Well there won’t be as many investors meaning less rentals and more tenants to chose from and higher yields. Did I forget to mention there’s an America’s Cup in 4 years in Auckland . .watch this space.
In summary, change is on the way and property investors need to adapt and evolve accordingly. Just how much change is coming in the short term is the question on all our lips.