04-12-2021, 01:40 PM
PROPERTY 101:
"How many investment properties is too many?"
How could there ever be a specific number? It all depends on a person's ability to manage and maintain them. And so long as they are managed and maintained, why is it the least bit important how many someone owns? It's no-one's business except theirs. Do you question how many dealerships a car dealer owns? Or how many orchards an orchardist owns? Or....
The reference to Germany...
It's irrelevant. They have a culture of renting for life. So expect to pay rent for life and spend their money on other things, when they have it. Our culture is to expect home ownership, but too many young people also spend all their money frivolously. They want to have their cake and eat it too, and then complain when those who worked hard, saved hard and lived frugally have money to invest. Those who really want to buy property can and do, and are rewarded in later years by reduced outgoings and more discretionary income. Some of whom spend that on investment property so they can have more than the GRI when they retire.
And after seeing the mess that our current government has made of absolutely EVERYTHING to do with housing, why would you want them to control more of the actual houses?
Picking on Luxon
He is supposedly a successful businessman but there isn't much evidence of this. We're told he has a few properties. If he is successful and didn't invest some of the money in property you would question his ability. As it is, I wonder where someone so "successful" has hidden the rest of his money as he doesn't appear on the companies register as owning anything in NZ.
It's ironic that the skyrocketing value of the properties he has has been because of the policies of the government that he is there to try and oust in the next election.
As far as conflict of interest goes, there was a list of MPs and property ownership the other day and it was surprising how few have investment property. Maybe THAT is a lot of the reason behind some of the idiotic law changes we have had that just keep making everything harder for tenants. The conflict of interest has been that there has been no one forcing the government to listen to the submissions made by the people who actually know.
Investment v. trading
Some of the comments above are making the so-often made mistake of confusing these. Traders buy and sell and have been making millions in the last couple of years. The idiotic "bright-line" rules have just clarified policies about tax on this income. The tax was always payable, as income tax, and the fact that IR didn't require payment is a huge problem. Now it seems that the tax obligations have been formalised and clarified into something less than they used to be which is unfair on all the other taxpayers.
Investors are there for the rental income and don't sell without a reason. So capitals gains tax is pretty irrelevant and bright-line rules will rarely apply because of the length of time the properties are held. Rental investors do, however, pay income tax on the rental income. And pay more of it than ever before after rule changes in the last few years. Other business can claim capital depreciation and interest on loans. Property investors can no longer do this, so have to either put the rents up, run at a loss, or bail out. Which many are doing. Maybe the 26-year example above - instead of blaming the landlord, blame the government for making provision of housing so much harder than it used to be.
20 years ago, anyone with equity in their home could easily use that equity to get started in rental investment. Today there are so many rules for borrowing that it is much harder. Those with 30 or 90 or more houses probably got their foothold when it was easy, and maybe now have enough cashflow to continue. 20 years ago you didn't ever pay more than interest only on mortgages. Now, because of government meddling, banks are requiring repayment so some investors now need to sell something to pay off their borrowings. And of course prices are now so high that that is much easier. But that is not the landlords' fault.
Oh, but we need to free up rental houses for young people to buy...
The problem is, young people don't want the houses that are rentals. They want something flash. It seems that cheaper houses are rarely of interest to young people. And when you go to auctions at the low end of the market, if there are young people there they usually get the house. Investors are totally numbers driven and drop out of the bidding when the price exceeds the expected return. Young house hunters can go higher as they are looking at the start of home ownership with a lifetime of investment opportunity for themselves.
And, as far as the housing shortage is concerned, it needs to be remembered that every young person buying their first home is not only taking a house out of the rental market, but usually not leaving behind an empty rental for someone else. For those who think investors are the problem of numbers of houses available for rent, think again. I'm not for one minute suggesting young people shouldn't buy their own home, but do get sick of hearing that property investors somehow cause the problem of lack of availability of houses for young people.
Instead of hating the landlords who are simply investing wisely and providing an essential service to people who need a house to live in, how about putting the blame for all the woes at the feet of the government where it belongs. The mess we have was created by the government. Landlords either live with it by putting the rents up, or sell their properties, usually increasing the holdings of those landlords who have chosen to stay in the business.
Instead of hating the landlords, look at all the skulduggery in the other essential services. Power, food, fuel, building supplies companies, etc all contribute to the cost of living, often by scalping everyone they can. Landlords are the scapegoats because their tenants know who they are. Everyone else is faceless. The landlords are all your neighbours, friends and family. Ordinary people just trying to make a living so why just pick on them?
And please stop telling the government to "fix" things. It's the over-control of the socialist government that has CAUSED all of the problems.
"How many investment properties is too many?"
How could there ever be a specific number? It all depends on a person's ability to manage and maintain them. And so long as they are managed and maintained, why is it the least bit important how many someone owns? It's no-one's business except theirs. Do you question how many dealerships a car dealer owns? Or how many orchards an orchardist owns? Or....
The reference to Germany...
It's irrelevant. They have a culture of renting for life. So expect to pay rent for life and spend their money on other things, when they have it. Our culture is to expect home ownership, but too many young people also spend all their money frivolously. They want to have their cake and eat it too, and then complain when those who worked hard, saved hard and lived frugally have money to invest. Those who really want to buy property can and do, and are rewarded in later years by reduced outgoings and more discretionary income. Some of whom spend that on investment property so they can have more than the GRI when they retire.
And after seeing the mess that our current government has made of absolutely EVERYTHING to do with housing, why would you want them to control more of the actual houses?
Picking on Luxon
He is supposedly a successful businessman but there isn't much evidence of this. We're told he has a few properties. If he is successful and didn't invest some of the money in property you would question his ability. As it is, I wonder where someone so "successful" has hidden the rest of his money as he doesn't appear on the companies register as owning anything in NZ.
It's ironic that the skyrocketing value of the properties he has has been because of the policies of the government that he is there to try and oust in the next election.
As far as conflict of interest goes, there was a list of MPs and property ownership the other day and it was surprising how few have investment property. Maybe THAT is a lot of the reason behind some of the idiotic law changes we have had that just keep making everything harder for tenants. The conflict of interest has been that there has been no one forcing the government to listen to the submissions made by the people who actually know.
Investment v. trading
Some of the comments above are making the so-often made mistake of confusing these. Traders buy and sell and have been making millions in the last couple of years. The idiotic "bright-line" rules have just clarified policies about tax on this income. The tax was always payable, as income tax, and the fact that IR didn't require payment is a huge problem. Now it seems that the tax obligations have been formalised and clarified into something less than they used to be which is unfair on all the other taxpayers.
Investors are there for the rental income and don't sell without a reason. So capitals gains tax is pretty irrelevant and bright-line rules will rarely apply because of the length of time the properties are held. Rental investors do, however, pay income tax on the rental income. And pay more of it than ever before after rule changes in the last few years. Other business can claim capital depreciation and interest on loans. Property investors can no longer do this, so have to either put the rents up, run at a loss, or bail out. Which many are doing. Maybe the 26-year example above - instead of blaming the landlord, blame the government for making provision of housing so much harder than it used to be.
20 years ago, anyone with equity in their home could easily use that equity to get started in rental investment. Today there are so many rules for borrowing that it is much harder. Those with 30 or 90 or more houses probably got their foothold when it was easy, and maybe now have enough cashflow to continue. 20 years ago you didn't ever pay more than interest only on mortgages. Now, because of government meddling, banks are requiring repayment so some investors now need to sell something to pay off their borrowings. And of course prices are now so high that that is much easier. But that is not the landlords' fault.
Oh, but we need to free up rental houses for young people to buy...
The problem is, young people don't want the houses that are rentals. They want something flash. It seems that cheaper houses are rarely of interest to young people. And when you go to auctions at the low end of the market, if there are young people there they usually get the house. Investors are totally numbers driven and drop out of the bidding when the price exceeds the expected return. Young house hunters can go higher as they are looking at the start of home ownership with a lifetime of investment opportunity for themselves.
And, as far as the housing shortage is concerned, it needs to be remembered that every young person buying their first home is not only taking a house out of the rental market, but usually not leaving behind an empty rental for someone else. For those who think investors are the problem of numbers of houses available for rent, think again. I'm not for one minute suggesting young people shouldn't buy their own home, but do get sick of hearing that property investors somehow cause the problem of lack of availability of houses for young people.
Instead of hating the landlords who are simply investing wisely and providing an essential service to people who need a house to live in, how about putting the blame for all the woes at the feet of the government where it belongs. The mess we have was created by the government. Landlords either live with it by putting the rents up, or sell their properties, usually increasing the holdings of those landlords who have chosen to stay in the business.
Instead of hating the landlords, look at all the skulduggery in the other essential services. Power, food, fuel, building supplies companies, etc all contribute to the cost of living, often by scalping everyone they can. Landlords are the scapegoats because their tenants know who they are. Everyone else is faceless. The landlords are all your neighbours, friends and family. Ordinary people just trying to make a living so why just pick on them?
And please stop telling the government to "fix" things. It's the over-control of the socialist government that has CAUSED all of the problems.