Is a rental property still a good investment option?

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#2197828 14-Mar-2019 11:24

tdgeek:How suitable is your house for renting? Does it comply with the new regulations for dry and insulated rentals? Landlords can be up for biggish money if they have sub standard houses, I imagine yours might be good as you live in it

Good question. Double insulation in the roof, but not wall or underfloor insulation, and windows are single-glazed. The reason there's no underfloor insulation is that the sub floor is too tight to get under there and do it, so I don't think getting an exemption for that would be a problem.

We did have some quotes for home ventilation systems a while ago, but opted against it at the time as multiple people who came in to quote commented that the house felt quite dry. It seems the only real benefit would be less window condensation for a couple of month each year.

Paul1977

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#2197833 14-Mar-2019 11:27

gbwelly:

I wouldn't be doing it now.

I do like watching the unintended consequences Labour will be suffering for their meddling. Rents will be going up as rental properties get sold to first home buyers reducing supply, due to lower headcounts in owner occupied houses. Ring fencing losses will also require rent to increase to cover the true cost of running the property.

The reason I wouldn't recommend it is house prices will be remaining flat for a while yet, and increasing rents will make it difficult for tenants to afford so higher chance of problematic situations.

People can argue all they want with me that rent can't go up any higher, but when you get over 80 people turning up to view the property you know that the upper bounds are still yet to be found.

What do you mean by this, what sort of "problematic situations"?

tdgeek

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#2197838 14-Mar-2019 11:31

gbwelly:

Paul1977:

What are peoples thoughts these days on a rental property as an investment?

I wouldn't be doing it now.

I do like watching the unintended consequences Labour will be suffering for their meddling. Rents will be going up as rental properties get sold to first home buyers reducing supply, due to lower headcounts in owner occupied houses. Ring fencing losses will also require rent to increase to cover the true cost of running the property.

The reason I wouldn't recommend it is house prices will be remaining flat for a while yet, and increasing rents will make it difficult for tenants to afford so higher chance of problematic situations.

People can argue all they want with me that rent can't go up any higher, but when you get over 80 people turning up to view the property you know that the upper bounds are still yet to be found.

Its long term so flat house prices isnt relevant

If rents rise as rentals turn to sales, thats a benefit. Its also a very slow process to date if you are referring to Kiwibuild

Problematic is due to certain tenants not prices

tdgeek

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#2197841 14-Mar-2019 11:32

Paul1977:

gbwelly:

I wouldn't be doing it now.

I do like watching the unintended consequences Labour will be suffering for their meddling. Rents will be going up as rental properties get sold to first home buyers reducing supply, due to lower headcounts in owner occupied houses. Ring fencing losses will also require rent to increase to cover the true cost of running the property.

The reason I wouldn't recommend it is house prices will be remaining flat for a while yet, and increasing rents will make it difficult for tenants to afford so higher chance of problematic situations.

People can argue all they want with me that rent can't go up any higher, but when you get over 80 people turning up to view the property you know that the upper bounds are still yet to be found.

What do you mean by this, what sort of "problematic situations"?

Non payment, shooting through, damage , I assume

gbwelly

1243 posts

Uber Geek

#2197843 14-Mar-2019 11:35

Paul1977:

What do you mean by this, what sort of "problematic situations"?

Unpaid rent:

They don't pay, you give them until end of the week. 2 days lost.

They don't pay, you give them a 14 day notice to remedy, plus 2 business days for delivery, you're now 18 days without rent.

They pay some and promise to catch up. Rent doesn't come. 7 days lost.

Log it with the Disputes Tribunal, 21 days, maybe more for a hearing, they don't answer their phone for the 'mediation' session.

House hasn't been vandalised, but hasn't been looked after either, bond doesn't cover it or the lost rent.

Most people say 'well it's your own fault for getting a crappy tenant' but it's not really like that. You are at the mercy of all sorts of other factors, e.g. a relationship breakdown or redundancy for example. Their problem becomes your problem.

gbwelly

1243 posts

Uber Geek

#2197844 14-Mar-2019 11:41

tdgeek:

Its long term so flat house prices isnt relevant

If rents rise as rentals turn to sales, thats a benefit. Its also a very slow process to date if you are referring to Kiwibuild

Well it is relevant, would you invest $600,000 into a savings account with 0% interest for 10 years? No?

First home buyers benefit from the conversion from rental to owner occupied, but not for everyone who rents. Are you saying that is worth it?

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