The good landlord
Too many Kiwi landlords do as they please, says one investor who is looking to Europe for ideas. As told to Brad Flahive.
Anneke Vandenberg believes landlords who want to profit from the community must be prepared to look after it.
New Zealand’s rental market is troubling – not only for would-be tenants, but also for many landlords, who fear and loathe the ever-changing rules and diminishing profits, prompting some to pull their properties from the market.
But not all landlords see the changes as a drug-induced road trip to Las Vegas – others are looking to Europe for ideas on how to perceive their proprietary role differently.
Here, three landlords share their thoughts on New Zealand’s rental squeeze.
It’s not just about making money
Anneke Vandenberg, landlord in Hawke’s Bay
I own 10 rental properties myself and I make sure that tenants are happy. I do this by fixing issues the same day, when possible, and set up easy communication lines between the tenant and myself.
I prefer to have the same tenant long term as I am happy to know they are secure, which makes the rental income stable as well.
Being a landlord gives you a special responsibility in society to ensure people live in safe, dry and stable living conditions.
If a landlord is to make money from the community they need to ensure their house is kept healthy.
I prefer to raise the rent a little bit every six to 12 months to cover rates and insurance rises and explain to the tenants the reason for such a rise.
I think greed harms society in the long run and will eventually catch up with you.
The situation we have in New Zealand should encourage us to look at other solutions and change our expectations.
Study the overpopulated places such as Holland – young people never look for ‘‘houses or flats’’ to rent, but they look for rooms, called
kamers. Usually these room have a small kitchen and bathroom facilities built within the small space.
I think changing expectations is the first thing we need to do.
Maybe the Government could introduce tax incentives for homeowners to convert a room into a living space with all facilities such as bathroom and kitchen included.
These tax incentives could become tax deductible, and would be cheaper than building student flats – garages can easily be converted into small dwellings complete with all the facilities needed. Again, tax incentives could be introduced.
Structural changes such as converting unused commercial buildings into [residential] rooms/ spaces. Unused warehouse complexes or buildings should be bought by the Government and converted into modern living facilities.
In Sweden and other northern European countries it is common to convert shipping containers into living spaces. If they run out of space to build on the land, these living spaces are built on water, such as canals. If you have lived in these overpopulated countries you are likely to have the opinion that we have plenty of space in New Zealand to build, instead of individual houses.
Apartments can be built in an attractive way with parks and facilities. I don’t understand why there is a rental or housing crisis in New Zealand.
In Holland and Germany, longterm leases such as 10 years is very normal and creates stability and content tenants. Rent rises there are also controlled by the government.
In New Zealand there are far too many rogue landlords who do as they please without having any concern for the [tenants].
Each time I purchase a flat I improve the quality and fix what needs to be fixed. I place myself in the tenants’ shoes and think how would I like things to be when I live in the flat.
These are just some ideas and I hope we as a nation can get together and help those who need help with accommodation.
I am talking about more than having shelter or a roof over your head – I am talking about a space that each person can call their home, no matter the size.
Fear of escalating compliance costs
Shawn Adriel-Ai, landlord in Auckland and Hamilton
It seems like the drop we are experiencing in the number of available rentals and corresponding increase in price was expected by our current Government.
I’m grateful to them for enabling me to raise the rent that I charge for my properties – I generally look at the lowest-priced property in the same suburb with the number of bedrooms and bathrooms and subtract a small amount from that when trying to set a fair price.
But fear of excessive future compliance costs has forced me to pull my best rental property from the market, despite me believing this particular property to be my best one. It has minor issues that may cause it to cost me more.
While personal circumstances permit me to live in the property, I have given serious thought to listing the property on Airbnb or Bookabach when I need to move elsewhere in the future.
The primary reason for this is fear of additional costs being imposed by a Government that gives me the impression that they believe that increasing compliance costs is good policy.
At this point every change that the Government makes to the rental laws makes me worry that there will be even more expensive ones to follow.
If I can rent the place out for 90 peak days – holidays, concerts, and events – during the year I would make more than I would from renting the place out to a long-term tenant for the whole year. This makes renting to a long-term tenant an unappealing option.
Once you add in the increased difficulty that the new rental laws have added to the processes to evict bad tenants and raise rents – it simply makes no sense to continue renting a property out.
Who would want to be a landlord?
Robert Lilly, former landlord in Tauranga
The rental market has become a very unattractive investment option, and, while it was never a great property investment, it has come under fire from successive administrations.
Under National they cut out the ability to claim depreciation on the rental – this normally accounted for about 50 per cent of outgoings and now with WOFs that is going to be another cost.
Then to top it off this current Government has upped the notice period from 90 to 120 days. Who would want to be a landlord?
I let go of my rentals and moved on when I saw a lot of costs coming towards me.
The solution is to back off a lot of these ridiculous measures, allow landlords to be able to conduct a reasonably profitable business, thus drawing them back into the game.
Otherwise we as taxpayers are going to be footing the bill to a huge extent to house tenants, and we know that that will cost the country far more than a few tax breaks for landlords.
The private investment landlords are the ones you want – they are the ex-plumbers and ex-builders, cleaning the spouting and keeping properties healthy.