How many investment properties is too many?

[Oh_hunnihunni]

I have had two like that, superb people and they made renting really safe and secure. The other six I have had, not so much. We need to reward the good and eliminate the bad, lol...

And yes I agree. There are such things as property hoarders...

[Lilith7]

From the Stuff article this morning, there could be an assumption that some private property investors are no more than hoarders on a grand scale.

https://www.stuff.co.nz/life-style/homed...properties

And I know of two in our neighbourhood on the Shore who own more than 90 properties, each.

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.   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.

If only all tenants & landlords were like that, there'd be no problems. 


The older I get, the more I see that having too much money is as bad for humans as is having too little.

[Oh_hunnihunni]

Maybe worse. Being really wicked long term costs a fair amount.

[Lilith7]

I think probably Ron Brierly is learning that.

[Kay2021]

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.   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.

If only all tenants & landlords were like that, there'd be no problems. 


The older I get, the more I see that having too much money is as bad for humans as is having too little.

Yes, something to be said for taking the middle road

[SueDonim]

Thanks for the welcome oh-hunnihunni and crafters_corner. I 've been away a couple of days and thought there might have been more discussion. It's seems to be fizzling a bit.

Someone thought my expression of people hating landlords was too strong but that is how the criticisms often come across. When it's aimed at a bad landlord, fine. But for the average landlord, they are just trying to do what they can with what they have and don't need unfair criticism. I'll also stick by what I said about the government. I know a lot of the growth in government control over our lives started long before the current Labour government, but they have certainly not helped. So many of the changes we have seen penalise the good and reward those that don't deserve reward. In many cases the old equilibrium was better.

I kind of liked the concept of investment/greed/addiction. I used to use the analogy of buying property like shoes for someone I know. But he did slow down and is a good landlord. I'm not so sure about the "greed" category. It's the traders who are greedy, not the investors. Why do all the hard work of being a landlord if you could just make money by buying and selling? And back to the landlords with 90 properties, there really aren't many of them, but so long as they are good, what does it matter? Basically no-one knows who they are unless they put their hands up. And no, I'm not one.

[Lilith7]

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.

[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.

[Lilith7]

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

That's rather an odd construction to put on my comment - I was suggesting that the tenant seek some help from the relevant organisation. That is a very long way from 'trying to prevent someone selling their property.'

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

Really? You think condescending to other posters is a good move?

[Oh_hunnihunni]

Quick reply to one of the above list - I live in social housing, an ex council pensioner housing unit where management was transferred to a ppp in order to access the government subsidy.

Under the council, rents were the same for all tenants, on the basis of their units being the same, services the same, need level the same - etc. When the change came in all legacy tenants were promised rent rises would be limited to ten dollars pa until the new maximum of 30% of gross primary income was reached. (The HNZ formula is 25% of net primary income...) But, the promises have been broken for many tenants, using a 'change of circumstance' excuse to cover anything the private corporate provider can come up with. So my rent doubled when I turned 65, while my already 65+ neighbours retained their previous rent amounts. Another tenant saved up her super to pay for ongoing private breast cancer treatment and her savings hit the maximum allowable. and her rent was doubled. The promises made to us were simply ignored, and these days tenants living side by side in matching units are paying a range of different rents.

And while the corporate is subsidised by the taxpayers to bring their rental income up to market levels, the duty of care implied by that subsidy no longer exists. We have community managers who used to look out for tenants with special needs, blind, wheelchair bound, non English speakers, dementia patients etc, these days we are told 'we are landlords, social work is not our remit'. Have concerns about a neighbour? Call the Police, or ambulance, not our community managers. It is very different from the days when our council staff managed the units. Their attitudes were completely different.

So, even in the social housing area, there are good landlords and bad ones. This is why we have serious situations arising in pensioner housing. From serious security and violence issues, to rip off tenants, destruction of property, and even tenants dying in their units and lying undiscovered for days. It is very sad the way things have changed, but it is part of the political drive to ensure a return on social investment - that lovely neo liberal mantra.

And the strange thing is, we need more social housing, much more investment in the area, but - we need it done with the kind of motivation that inspired the taxpayer and ratepayer investment in the first place. We need the 'social' put back into social housing, and we need that to permeate through all rental housing, to provide homes for everyone who needs one, and the safety and security that comes with that good roof over our heads. That is after all, what a caring community means for all of us.

[Lilith7]

Quick reply to one of the above list - I live in social housing, an ex council pensioner housing unit where management was transferred to a ppp in order to access the government subsidy.

Under the council, rents were the same for all tenants, on the basis of their units being the same, services the same, need level the same - etc. When the change came in all legacy tenants were promised rent rises would be limited to ten dollars pa until the new maximum of 30% of gross primary income was reached. (The HNZ formula is 25% of net primary income...) But, the promises have been broken for many tenants, using a 'change of circumstance' excuse to cover anything the private corporate provider can come up with. So my rent doubled when I turned 65, while my already 65+ neighbours retained their previous rent amounts. Another tenant saved up her super to pay for ongoing private breast cancer treatment and her savings hit the maximum allowable. and her rent was doubled. The promises made to us were simply ignored, and these days tenants living side by side in matching units are paying a range of different rents.

And while the corporate is subsidised by the taxpayers to bring their rental income up to market levels, the duty of care implied by that subsidy no longer exists.  We have community managers who used to look out for tenants with special needs, blind, wheelchair bound, non English speakers, dementia patients etc, these days we are told 'we are landlords, social work is not our remit'. Have concerns about a neighbour? Call the Police, or ambulance, not our community managers. It is very different from the days when our council staff managed the units. Their attitudes were completely different.

So, even in the social housing area, there are good landlords and bad ones. This is why we have serious situations arising in pensioner housing. From serious security and violence issues, to rip off tenants, destruction of property, and even tenants dying in their units and lying undiscovered for days. It is very sad the way things have changed, but it is part of the political drive to ensure a return on social investment - that lovely neo liberal mantra.

And the strange thing is, we need more social housing, much more investment in the area, but - we need it done with the kind of motivation that inspired the taxpayer and ratepayer investment in the first place. We need the 'social' put back into social housing, and we need that to permeate through all rental housing, to provide homes for everyone who needs one, and the safety and security that comes with that good roof over our heads. That is after all, what a caring community means for all of us.

Excellent post - that's about the size of it now.

These days there are still those living the Neo liberal dream where profit is everything, & people & any needs they may have, count for nothing.

I really don't believe that landlords should be legally permitted to behave as they have in your situation; while tenants have a a responsibility to keep their rental in good order & pay their rent on time, landlords of whatever variety should also he held to behaving reasonably rather than exploiting the most vulnerable in order to make their profit.

[TygerTung]

Young people are stuffed now. Back when we bought in 2008 we bought a 3 bedroom house in an excellent area of town for $250k, which was easily achievable for a couple on a low income with a small amount of savings $16k (we borrowed off parents instead, to be paid back when house sold). It was just a case of looking around and finding something. It would have been considerably easier about 3-4 years prior, but I wasn't married then.

Now the equivalent house is probably 700k and wages have only risen probably 30% since then. The issue is the house prices are on an exponential curve, so it is extremely difficult to get on the ladder. I have a friend in Auckland the same age as me, married with three kids and I don't see any way that he will ever be able to buy a house. His rent takes most of his wages so he will never be able to save for a deposit, as the house prices are rising way faster than he can save. He's ruined.

[Lilith7]

Young people are stuffed now. Back when we bought in 2008 we bought a 3 bedroom house in an excellent area of town for $250k, which was easily achievable for a couple on a low income with a small amount of savings $16k (we borrowed off parents instead, to be paid back when house sold). It was just a case of looking around and finding something. It would have been considerably easier about 3-4 years prior, but I wasn't married then.

Now the equivalent house is probably 700k and wages have only risen probably 30% since then. The issue is the house prices are on an exponential curve, so it is extremely difficult to get on the ladder. I have a friend in Auckland the same age as me, married with three kids and I don't see any way that he will ever be able to buy a house. His rent takes most of his wages so he will never be able to save for a deposit, as the house prices are rising way faster than he can save. He's ruined.

There's very little chance for most younger ones these days to ever own their own home. Regardless of how hard they work, when prices are so high & wages comparatively low it just can't happen.

[jim157]

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The owner will profit hugely. His tenant on the other hand is in real trouble.

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

so they just came along and paid the mortgage off did they? they nocked on the door and said here have this money in exchange for nothing
they lived somewhere for that time didnt they?
dont blame the ll the tenant didnt move on
seeing as they have lived there paying  cheap rent (for at least the first 20 years ) why dont they buy the house they must have saved enough
most ma n pa LLs have to top up the mortgage because the rent doesnt cover it

[Lilith7]

---

The owner will profit hugely. His tenant on the other hand is in real trouble.

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

so they just came along and paid the mortgage off did they? they nocked on the door and said here have this money in exchange for nothing
they lived somewhere for that time didnt they?
dont blame the ll the tenant didnt move on
seeing as they have lived there paying  cheap rent (for at least the first 20 years ) why dont they buy the house they must have saved enough
most ma n pa LLs have to top up the mortgage because the rent doesnt cover it

In that situation its blindingly obvious that both tenant & landlord benefited from it; the tenant by having a home to live in & the landlord by having a reliable tenant who paid off his mortgage.
I don't think its too difficult to understand that, after such a length of time, its likely to be extremely difficult for the tenant to find another suitable & affordable rental property.

[TygerTung]

And seeing as the mortgage is likely to be have been paid off in that time, the new tax laws are unlikely to affect the landlord.

[Oh_hunnihunni]

So now it is time to recoup the capital gains?

Let's not forget those.

[Magoo]

my younger brother had 17 properties last christmas.
Today he has 4, 3 of which are on the market.
Stoic, my brother man of few words.
He volunteers nothing. Spent the weekend fishing lake taupo with him.
Asked him about his rentals. He told me he has been divesting since june and hopes to be completely out of the market by january.
the last time he did this was early 2008, months later the GFC brought everything to a halt.
Based on what he has achieved, i wouldnt bet against him.

[Oh_hunnihunni]

Ahhh Taupo, the loveliest place in my world, so many gorgeous memories made there.

Definitely a place worth investing some of those capital gains in enjoying to the max! Mind you, it is not nearly the place I left behind in 1988. Best not to go back, best just to remember it as it was I think.

[Magoo]

the downtown itself is unbearably busy in summer. its awful. i couldnt do it.
luckily there is more to the place than just that.