How many investment properties is too many?

[sarahk]

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....

I think "Sue" said it all, but I'll add some of my thoughts

== Where to put your savings if you can't put it into property? Managed funds? My family has lost oodles to Brierley and his ilk. They don't need more.

There is something rather 'yuk' about people being able to do this.

Greedy people, buying up property, so that they can charge outrageous rents.

Its just unfair when a company or individual can own so many properties

make investment alternatives safer and more attractive.

There is property investment and then there is greed and then there is addiction, for me the 90 properties each falls into the addiction category. 

I think it does matter what kind of landlord has 70 odd properties, in fact its probably the most important thing about such a landlord. Even if they're an excellent landlord, you have to ask just why any one person has so many properties.
I really don't believe that too much money is good for anyone, anymore than too little money is.

Dear friend of mine has been a tenant in the same property for 26 years. She has just been given notice to vacate because the LL is selling up.
Imagine the shock that must be.

That must be awful but the recent RTA changes make owning a rental really difficult. The IRD even has the ability to penalise you if your rent is too low!

Maybe after 26 years it's time for the owners to retire and they need to be able to spend their savings?

We need a more even balance of power for tenants. For good tenants especially. After all, this one has paid his mortgage off...

The balance of power is definitely in the tenant's hands - they can take their landlord to the Tenancy Tribunal and any fines go to the tenant - and they can be significant.

If a tenant is "anti-social" the landlord can't evict them without TT permission after getting 3 written statements within a 90 day period. The tenant has the right to know who complained. Chances are the neighbours will be too intimidated to put anything in writing and so the tenant stays.

The additional downside is that landlords won't "take a chance" or "trust their intuition" with a prospective tenant. That means that existing tenants have security but kids leaving home, people moving cities, relationship breakups etc will be prevented from becoming tenants.

Isn't there an organisation which might be able to help her - tenant's protection or whatever their name is, or perhaps CAB? That seems a miserable thing to do to a long term tenant, especially at this time of year.

Are you suggesting that someone shouldn't be allowed to sell their own assets?

With our current challenges around housing, should there be a limit to the number of residential properties that can be held in private hands? Or should we perhaps use taxation to persuade investors to look at more productive use of their savings?

Oooh, I'm curious, what's a more productive use of savings?
Most landlords have "day jobs" and would love a way to save that doesn't include 9pm emergencies, cleaning all weekend, etc

I think limiting people to 1 rental property tax free when selling and then add capital gains tax to sale on all subsequent rentals would be enough to make an impact.
Its the property investors who hold 20 or 30 properties that are really the problem

Most investors sell at the end of their lives or pass on to their children. The only investors I know who have sold sooner are selling a high maintenance home they bought when they were too green to know better. Well, apart from now because the Government have made it way, way too risky to provide homes.

I think family occupied home, one holiday home with a residency qualification and one investment property should be the limit for private owners.

I love how you think investors have holiday homes, so cute

But, alongside that, we need more stringent monitoring of poor tenants who damage and destroy landlords property and the communities they live within. It has to be a more balanced relationship  because the number of renters is climbing rapidly, and they deserve better representation from our government. At the moment it seems only Chloe and Paul Eagle are even vaguely interested in genuinely working towards leveling that playing field.

It must be more than those two for the 90 days rule change to go through, the bright-line increase, the changes to depreciation.

You know something, we should reward good landlords. I have been renting now since coming back to Auckland in 2005. Eight rentals. Four really bad landlords, two fantastic ones, one property manager, and the current corporate.

My experience might be pretty average I suspect.

Good landlords get rewarded by having tenants that stay. We have a property with 4 homes on it. For the last 5 years when someone gives notice they've already had a friend ready to move in. We've just had to meet them, run the credit checks and they're in. We usually have a wee gap to give us time for the kind of maintenance you do when a place is empty.

We even helped a tenant get his papers in order to buy a home and gave advice on what to look for. Unfortunately, he got upsold & bought something beyond his budget and a couple of years later was back renting. He came to us to see if we had any vacancies. We are small fry, so couldn't help.

I like this idea.  First rental, tax free.  From then on, the rate of tax increases as you purchase more properties.  The more properties, the higher the tax.

If you consider "tax" to be a "cost of doing business" what do you think that will do to rents?

I know people who have sold their 3 rentals rather than take the risk of bad tenants where with the new rules they can't get rid of them, the reason why one property was sold. 

There are hundreds doing that. I'd love to have some stats on whether those properties are being bought by owner-occupiers, speculators, or investors.

No one 'hates landlords' fgs. Very fanciful comment.

Not at all. Hop onto Twitter and find threads about NZ landlords. Plenty of vitriol and hatred going around.

When we bought our first house in 2008, it was real easy

Pick a year, any year, and go through the news archives. You'll find plenty of articles talking about how much harder it is now to "then". Not saying it isn't tough, but I suspect it's always tough and hindsight lets us forget how hard we worked.

Perhaps the best way to bring house values down is to build a lot of dedicated rentals and institute the same rent controls across all rental properties, so that renting is a better option than buying.

Kāinga Ora are doing just that, Ockham too, and the social housing crowds.

 

We rent, have awesome landords and we are awesome tenants, they got us when they bought the house.  Last time we saw them, plumbing issue, major, when leaving they said, see you in 5 years.  We are mindful though there intention is never to sell, things can change.

They probably just invalidated their insurance. If disaster strikes their policy will require they show they've done 3 monthly inspections. Not only does that leave them out of pocket, but the insurance would have covered your emergency housing.