The government has changed. There has been a dramatic change in attitude to landlords also.
Once being a landlord was something to aspire to and be proud of. You worked hard and had enough equity in the family home to buy a rental property. You spent your precious spare time preparing your rental property. You could have refurbished it, so it would be a place you would be proud to call your home.
You took on the risk of vetting tenants and checked their credentials and background. You met your legal obligations to the government, insurance company, tenant and bank.
The return on this investment (which you put your entire life savings into) you were lucky if you broke even, and didn’t top up the bank loan. There were no major repairs, damage, or insurance claims. Tenants would always pay the rent, would never abandon your rental property, and it would be passed back in the same condition you rented it.
The fairytale is over. Today, the being a landlord is increasingly a tough business to be in. Yet with the right bank, accountant, lawyer and property management company – you will do well.
Remember the Positives:
- Auckland has a short supply of quality rental properties. A property marketed at the right price will get a quality tenant.
- Banks are still interested in lending to those who have shown they are disciplined in saving and repaying debts/loans.
- Capital gain may have slowed. Yet, over a 10-year period – property is still one of the best investments you can make.
- Changes to the bright-line test from two to five years has meant some small investors have exited. So competition is less for the serious investor.
- You have the ability to improve your investment property. You could subdivide your property to gain another rental unit.
- You are in control of your investment. You make the decisions on how to improve it, manage it, and grow your portfolio over time.
Get in touch with Kerry Kirwan about us managing your Auckland rental property, or portfolio of properties: