How Will That Affect Owners & Renters?
In a recent Stuff news article, Christchurch property investor Bruce Pyott said that he feels the recent Government policy changes will result in a lack of rental properties for tenants.
New policies include changes to the rules around the ring-fencing of rental losses, the extension of the bright-line test to 10 years, and the removal of interest deductibility on rental income.
In addition, there have been changes to tenancy laws as well as the introduction of healthy homes standards.
These changes, combined with increased interest rates, have forced many owners to elect to sell rather as they struggle with the increased costs.
Fiona Milde, Managing Director at Wealth Management Strategies says “Most property investors are ordinary moms and dads who put in 40+ hours per week to make a better life for themselves and their children. These policy changes can mean an average cost increase of $600 per week. Owners simply cannot afford that.”
So, What Does This All Mean For You?
If you’re an owner, and you haven’t already done so, you really do need to sit down and crunch the numbers.
Have you factored in increased mortgage costs? How much will it cost to bring your properties up to Healthy Homes standards? Do you have a financial contingency for that? Or do you need to sell your properties?
This is where Wealth Management Strategies can help you. Sometimes, a fresh set of eyes is what you need to identify the options available to you to be able to retain your investment property.
As mentioned in a previous article, where we stated that these changes will result in more people renting it is becoming a highly competitive market for renters to secure a property. You can help make it easier for property managers to help you by having the required information available.
Providing us with references, personal and from your existing and previous landlords, proof of income, pet CV’s etc and having the ability to pay your bond and first two weeks rent within a short timeframe will greatly assist you in securing the home of your dreams
“Making an effort with each application certainly makes our job that little bit easier” says Gerhard Thomas, Benchmark Property Management General Manager.
A last word, Government is looking at ways that it can help tenants and rent control is being mooted as an option. Looking at examples from around the world, this hasn’t always worked out well for the tenant or owner.
We will keep on monitoring this and keep you updated.